Goldman Sachs Smacks Software Stocks

See this story on SeekingAlpha (which might consider renaming itself SeekingShelter), entitled Goldman Slaps Most Software Stocks.

Excerpt on aggregate spending:

The worst of the IT-spending slowdown likely remains in front of us, as we start the clock on slashed 2009 budgets. We forecast 0 percent revenue growth for our group, below consensus at 5 percent, and 1 percent earnings growth, below Street at 2 percent.

The most interesting point addressed is whether the downturn will drive consumers to open source (i.e., nominally "free") software:

There has been much discussion in the blogosphere about open source software and how it will see a surge of adoption do to its lower cost. Goldman quite rightly says this will not be the case. I have written that CIOs will hunker down and stick with the tried and true (which is not open source in most large-sized enterprises) and Goldman is in agreement, seeing a consolidation of functionality with big, established vendors and a moving away from the concept of seeking best-of-breed point solutions regardless of vendor.

On sectors:

So in terms of non-defense technology companies we are batting two for two: Neither hardware not software will be spared over the next several quarters as the outlook remains dim for both.

Happily for Mark Logic we have a large defense / intelligence business, which I believe will offer shelter from the storm.  And, as I've argued before, for non-advertising-driven media companies, I believe that GDP growth (or lack thereof) is a second-order effect relative to seismic changes driven by the Internet and Google to which MarkLogic helps them respond.