SAP announced that it was going to miss its third quarter targets.  Henning Kagermann, SAP's CEO, had this to say:

Color me unsurprised.

The reason I bring this up is because I suspect we are going to see a lot more of this.  SAP has two things working against it:  an expensive premise-based model that requires big capital outlays and large staffing requirements, and steep (STEEP!) price tags.  Businesses typically acquire loans to fund both, and loans are nowhere to be found right now.  Banks are hoarding cash because they don't know who to trust.

As I wrote before, I expect the deflationary credit collapse we're in the midst of to do bad things to enterprise software companies' bottom lines.  However, there are opportunities in the midst of the chaos.  As I said when talking about the effect the recession will have on IT spending, companies that take advantage of cloud-computing and Software as a Service models should do well.  In fact, they should turn a pretty penny cannibalizing companies like SAP which need financing to survive.

The ideal solution would be for our government to fix the problem, but that doesn't seem to be in the cards. All they have to do is force companies to bring everything back on-balance sheet, force all credit default swaps onto regulated exchanges, bring back Glass-Steagall, and outlaw this ridiculous Level III asset crap.  As I've said all along, this is a TRUST and TRANSPARENCY problem, not a liquidity problem.  But that would instantly expose many zombie banks as dead, and those banks pay for our Congress' campaigns, so I expect to see the carnage continue.