Technology
As SAP (SAP) Warns On Earnings Enterprise Software Comes Under The Gun
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If the segment of tech which markets to large businesses was supposed to be one of the last bastions of earnings safety, it has just fallen.
SAP (SAP), the second largest enterprise software company in the world, warned about its third quarter earnings today. The firm’s shares were knocked down 15%
That paints a bulls eye on Oracle (ORCL), VMWare (VMW), Cisco (CSCO), Sun (JAVA), NetApp (NTAP), and EMC (EMC).
Wall St. has harbored the illusion, or perhaps it is a hope, that large companies would continue to expand and upgrade their hardware and software IT. The SAP warning is only the beginning of a tidal wave of bad news for the sector.
With large operations such as GM (GM) and Gannett (GCI) drawing down on lines of credit because the commercial paper market is dead, the chances that the Fortune 1000 will cut capital expenses and improvements in infrastructure of even the most necessary systems grows more likely every day.
SAP’s may be the first company in its industry to speak up, but the five-year old tech boom just got shattered.
Douglas A. McIntyre
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