Siebel Systems ( SEBL) got the fourth-quarter earnings season off to a sprightly start Wednesday, preannouncing stronger-than-expected revenue and earnings . And other major software vendors also are likely to make or perhaps exceed expectations. But don't let last quarter's results fool you. The first half of 2005 isn't likely to duplicate the rally that pushed the Nasdaq up 24% and the Goldman Sachs Software Index by 37% in the last five months of the year. "Q4 was great, now what do you do for an encore?" asked Rich Parower, portfolio manager of the Seligman Global Technology Fund. Indeed, the first three days of trading in the new year were disappointing as the Nasdaq slipped nearly 4%, amid worries about inflation and the price of oil. Add to that concerns over higher interest rates and the weakening dollar -- not to mention potentially overheated M&A expectations -- and the picture for software investors becomes unusually complex. It's no news to experienced software investors that the first quarter is normally the seasonally weakest of the year. But the first quarter of 2004 was stronger than average, making year-over-year comparisons with this year's first quarter fairly tough. Moreover, "a lot of companies gave conservative guidance for the fourth quarter and that led to the run-up," said Ryan Tansey, an analyst with John Hancock. With solid fourth-quarter results largely baked in, Ryan is expecting a "buy the rumor, sell the news" reaction. The muted reaction to Siebel's upside surprise certainly lends some credence to Tansey's thinking. Despite handily beating consensus for total revenue and license revenue, as well as a jump in operating margin, the stock ended Wednesday's session with a loss of 27 cents, or 2.7%, to $9.61. To be fair, a number of sell-side analysts saw the company's performance as an indication that the turnaround efforts of Mike Lawrie, who became CEO last year, are beginning to be felt. Investors will get a better idea of his progress on Jan. 27, when Siebel reports final fourth-quarter results, and more significantly, gives guidance for the first quarter and the fiscal year.