Editor's Note: This article was originally published on Real Money at 7:20 a.m. EDT on July 18. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.
NEW YORK ( Real Money) -- How did they not see cloud and mobile coming? How were they not able to move fast enough? What were they thinking?
Do you know those questions can be asked of pretty much every information technology CEO who has reported so far, with the exception of SanDisk (SNDK) and Xilinx (XLNX)? When you listen to these quarters just reported, you realize just how disruptive both cloud and mobile are.
Unless companies are specifically built for cloud or mobile and have the cost structures and infrastructure in line with those two themes, they just couldn't deliver what investors wanted.Take Intel (INTC). Yesterday, both on television and on the conference call, the executives bemoaned how slow they were to mobile. "We're are little slow to recognize the trend toward mobility," CFO Stacy Smith told CNBC. Huh? How could they not see this coming? How did Yahoo! (YHOO), before Marissa Mayer, not see it coming? She admitted that the company, a little more than a year ago, didn't see mobile coming. How about cloud? SAP (SAP) and IBM (IBM) admitted that the accelerated move to the cloud hurt profits and revenues. Oracle (ORCL) said as much when it reported last, although Oracle did team up with Salesforce.com (CRM), which saw these trends coming years ago, to get moving faster on the cloud. But it may not matter for Oracle, because it's infrastructure is heavily non-cloud based. Meanwhile, Sandisk, often considered to be the lightweight of techs because of its focus on flash, blew the numbers away because flash is in the sweet spot of mobile. Xilinx also reported a terrific number because it saw mobile and the accelerated move to video coming. But still, because of weakness in Asia, Xilinx gave a muted outlook. I think they were just being conservative, but it did cause the company to catch a downgrade and muted the original excitement. Now, after these reports, there is no doubt whatsoever that the old-fashioned, expensive software that's sold by salespeople to institutions with hefty licensing fees may rapidly become a thing of the past. That's a high-margin business.
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