NEW YORK ( TheStreet) -- Of all of the industries I've summarized over the past couple of weeks, the enterprise sector, which consists of software, hardware, cloud and "big data" companies, unquestionably ranks up there as the most puzzling.
On the one hand, despite constant bearishness about lacking profitability, you have had the head-scratching dominant performances of Salesforce.com (CRM) and Workday (WDAY), which have built themselves into solid Software-as-a-Service (SaaS) giants. On the flip side, their rise in popularity contributed to the relative disappointments that hit bellwethers Oracle (ORCL) and IBM (IBM - Get Report) despite their consistently strong profitability.
After its shares lost 4% of their value last year, technology giant IBM entered 2013 ranked in my top 10 of projected outperformers for year. As it stands, for the year to date the stock is down another 3.4%. IBM shares closed at $185 Friday. I'm not willing to enter 2014 with similar expectations. As much as I like "Big Blue's" ability to produce "green," I don't see any evidence the company's management can effectively fight off enterprise/cloud threats from either Workday or Salesforce.com.
And I haven't even mentioned the embarrassment IBM has suffered at the hands of Amazon (AMZN) when the Central Intelligence Agency chose Amazon's Web Services over IBM's cloud platform. Plus, when you consider the degree to which rivals such as Accenture (ACN) and Tibco Software (TIBX) continue to steal/outbid IBM in large deals, I just don't see where this company can mount any type of comeback in 2014.
That said, Hewlett-Packard (HPQ - Get Report), whose stock is up 98% for the year to date after closing Friday at around $28, demonstrated a comeback is always somewhere around the corner. But it's all relative. Unlike IBM, HP at one point lost 53% in 2012. Essentially, while no one predicted HP would have strong performance, expectations were already so low that "less bad" earnings announcements were counted as wins.