Patrick Walravens of JMP Securities has a report out this morning suggesting that Netsuite, the SaaS providers of enterprise planning and financial tools, is bucking the looming slump in technology spending. This may give a boost to other Web software names, notably Salesforce.com. It could also help industry giants Oracle and SAP show growth from recent acquisitions.
Walravens writes that his sources aren't seeing any snags along the lines of "higher approval levels, project delays, more scrutiny." He cites Netsuite's lack of European exposure as a possible explanation. The company primarily sells to small and medium-size businesses in the U.S. Total euro denominated exposure is under 1%.
Meanwhile Walravens cites that Netsuite is hiring new sales reps aggressively, and in some cases splitting existing sales territories to create room for hires. Walravens saw this in the early days of Salesforce.com's ramp up. Walravens is predicting billings growth of 30%, consensus is 28%.
Netsuite already trades at a premium (as measured by price-to-sales) to rivals Salesforce.com and SAP.
