by Thomas Wailgum

Cloud Software Vendors See Stocks Hit Stratosphere

Jan 12, 2010
Cloud ComputingEnterprise ApplicationsERP Systems

SaaS companies have ridden the cloud applications trend to huge stock gains since December 2008. Who's in the most money?

Enterprise software luminary Bruce Richardson just left AMR Research behind, but as a parting gift to his “First Thing Monday” readership, the analyst offered an eye-opening view of just how cloud application and SaaS providers are faring on Wall Street.

And the view, well, it’s pretty amazing.

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As discussed in Richardson’s farewell post, here’s a look at the recent stock performances for five top cloud application providers:

NetSuite closed 2009 at $15.98 per share, up 89.3% since Dec. 31, 2008. During the last few months the company has consistently flirted with the $1B market cap mark. NetSuite ended the year valued at $996.2M.

RightNow ended the year at $17.37, up 124.7%. Its market valuation topped $552M. closed 2008 at $73.77, up 130.5%. I bet you wish you loaded up when it dropped to $25.19 last winter. If you had, you could be reading this on your own island near Richard Branson’s. If the company’s share price grows another $6.00 or $7.00, will have a $10B market valuation.

The real stars, though, were archrivals SuccessFactors and Taleo. SuccessFactors finished the year at $16.58, up 188.85%. Taleo’s share price jumped 200.38% during the course of 2008, ending at $23.52.

Richardson has been writing about the performance of cloud app stocks for a while. In fact, he points out that if, after reading his December 2008 post on the “SaaS 20,” you followed his investment recommendations by buying then-depressed SaaS stocks, “your portfolio would be up by 300 percent to 400 percent.”

By comparison, the tried-and-true ERP vendors didn’t fare all that badly on Wall Street: Epicor was tops with a 58.9% gain, followed by QAD (+45.8%), Lawson (+40.3%), Oracle (+38.3%), and SAP (+30%), according to Richardson’s research.

One ERP vendor Richardson didn’t mention in his parting AMR newsletter was Infor, the $2 billion privately held vendor where Richardson is now hanging is hat, as chief strategy officer. Infor’s not known as a cloud ERP vendor now—but that may soon change.

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