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SaaS Stocks Continue Winning Streak

MSPmentor has a writeup on how companies within the ‘Software As A Service’ is doing.

http://www.mspmentor.net/2009/04/18/saas-stocks-continue-weekly-winning-streak/

Among their coverage, winners include RightNow Technologies (RNOW) which I have covered recently.

They also has a ‘SaaS 20 Stock Index‘. Not all companies in the index derives their revenue exclusively with the ‘software subscription’ model. For example, Google and Amazon are listed among the index.

I’m sure most of us knows that the bulk of revenue for these 2 are advertising and B2C sales respectively.

What it does suggest is the growing importance of ‘SaaS’; as a business model and revenue channel. We need to be careful here as well. Just because a company put a ‘SaaS’ sticker on their offerings does not means they will succeed.

In fact, from Business Insider, Google’s targetted revenue for App is only US$10million; a tiny fraction of their ads revenue.

So my bet, when it comes to companies in this area, are the one that live and die by this model.

  • RightNow Technologies (RNOW)
  • Salesforce.com (CRM)
  • NetSuite (N)
  • AthenaHealth (ATHN)

Why? Because they are focus. They will do all they can to do better than the competitors because this is the key revenue channel.