The worst of times have turned into the best of times for software as a service (SaaS) stocks. After a horrid performance in 2008, SaaS stocks rallied nearly 30 percent during the first half of 2009, according to Nine Lives Media Inc.'s SaaS 20 Stock Index. Here's a look at the SaaS leaders to date...

On the upside, big SaaS 20 Stock Index winners for the first half of 2009 included:
  • Taleo Corp. (TLEO, up 133.33%): The talent management specialist generated 34% year-over-year revenue growth during its Q1 ended March 31.
  • Amazon.com (AMZN, up 63.14%): All clouds, it seems, lead to Amazon Web Services, Amazon Simple Storage Service (S3) and Amazon Elastic Compute Cloud (EC2)
  • SuccessFactors Inc. (SFSF, up 59.93%): Another SaaS-focused talent management specialist, SuccessFactors posted a 50% increase in Q1 revenue vs. Q1 2008.
  • RightNow (RNOW, up 52.65%): The "other" big SaaS CRM provider, though far more targeted in its efforts than Salesforce.com.
  • Constant Contact (CTCT, up 49.74%): Q1 revenue, announced in May, shot up 55% to $28.1 million.
  • Kenexa Corp. (KNXA, up 44.99%):  Q1 revenues, announced May 11, dropped nearly $10 million to $38.8 million. And the company could be facing a class action lawsuit. Still, investors seem to be true believes in SaaS-oriented talent management software.
  • NetSuite (N, up 39.93%): Q1 revenue jumped 22% to $41.6 million. And NetSuite is seeking more channel partners to promote its ERP and CRM SaaS platform.
Other big first-half winners included Salary.com (SLRY, up 38.36%), Google (GOOG, up 37.04%), Dell Inc. (DELL, up 34.08%) and Ingram Micro (IM, up 30.69%). Dell and Ingram, not exactly SaaS stars in their own right, are featured on the SaaS 20 Stock Index because of acquisitions (Silverback, Everdream) and Managed Services (Ingram Micro Seismic), respectively.

    Reality Check

    Despite all those winners, let's keep the long-term SaaS market in perspective. During 2008, SaaS stocks fell roughly 50 percent. And our own SaaS 20 Stock Index -- despite this year's rally -- remains 30 percent below its January 1, 2008 starting point.

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