Software thinks its revenue is crisis-proof. This time may be different

Photo caption: Google Data Center in Council Bluffs, Iowa. Source: Google. Article by Tim Mullaney.

With many technology funds back to break-even and the Nasdaq leading the major equity indices back up after the market rout that began in February, there’s a conventional wisdom about why: Software is so important to modern business that companies will do almost anything to keep buying and using it. But what if that’s not completely true? Software companies were little affected by the 2008 financial crisis. But that confidence, and immunity from corporate enterprise IT budget rethinks, is less likely to be duplicated this time.

The market’s rising confidence that software will be OK in the coronavirus recession will be tested as companies begin reporting earnings, highlighted this week by Microsoft and Amazon.com, which now makes most of its profit from its cloud-computing business, which is, at its bottom, a new-technology means of distributing software. […]

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