SOFTWARE: . . BobP and all, We all eat a bite or two now and then. . .
As I said earlier, I am seeing a sort of meltdown in software stocks. I started seeing a softening in them several months ago. I've not been crazy about MSFT, ORCL, SUNW, etc. and left them out of my long portfolios for a reason.
Software directed toward consumers, like INTU, ADBE or the little COSSF, I don't see a problem with. . .in fact I think they will do fine all year long. But the business software companies are going thru a sort of metamorphosis, in my opinion. I think that servers are being replaced with desktops, custom written software is being replaced with ready-out-of-the-box software and Windows NT and Unix is rapidly being replaced by Linux.
Now an argument that IBM, HWP, ORCL and others are going after the Linux system and investing in them, etc. is often thrown at me. But there is no clear winner, nor will there be anytime in the near future on Linux. When businesses decide which software combination works best for them, then there might be a clear winning "standard". . .but I don't think that will happen either. I think there will be a dilution of software companies.
So many choices. . all do a great job, but you only pick one per use. Lotus Notes being used so much these days will eventually go Linux, IMO and be a mainstay. But Windows NT is not long for the business world, strictly in my opinion.
The big hit to software companies big and small is due to the lack of reported failures from the closing of the first quarter of 99 with regard to Y2K. Lots of small software companies were counting on some panic this summer, which doesn't look as likely to happen as they may have thought.
Add to all this the earnings pressures, and you have a sort of meltdown. Again, watch for over corrections and any panic selling. Most software companies are misunderstood. They are believed to be focused on a particulary thing [Y2K?], yet are in fact, well diversified.
Rande Is |
