The VAR Guy

Rackspace Hosting Inc. (RAX) has replaced Omniture in our SaaS 20 Stock Index, which tracks publicly held companies that have software as a service (SaaS) business practices. Here’s a quick look at the SaaS 20 Stock Index, its members and its overall performance in 2009.

Please note: The SaaS 20 Stock Index is not an effort to endorse or promote specific companies. Rather, Nine Lives Media Inc. (The VAR Guy’s parent company) launched the index in 2008 to help measure the SaaS industry’s overall health and evolution.

We’re adding Rackspace to the SaaS 20 Stock Index for two reasons:

• Rackspace replaces Omniture, which Adobe recently acquired.
• Rackspace caught our attention because of the company’s growing cloud business. (Full disclosure: We host one of our web sites in the Rackspace cloud.)

After a weak performance in 2008, the SaaS 20 Stock Index has climbed more than 50 percent so far in 2009. The index’s three biggest winners so far this year are:

• SuccessFactors Inc. (SFSF, +174% year to date) — The HR and business management software provider has grown its year-over-year quarterly sales by 30%, reaching $38.7 million in Q3.
• Taleo Corp. (TLEO, +165%) — Another fast-growing HR SaaS software provider, Taleo plans to raise an additional $132 million.
• Amazon.com (AMZN, +157%) — best known as an online retailer, we continue to watch the emergence of Amazon Web Services, Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (S3).

Generally speaking we offer a weekly update on the SaaS 20 Stock Index after U.S. markets close each Friday.

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