Cramer: They Didn't See the Cloud Coming
NEW YORK (Real Money) -- How did they not see cloud and mobile coming? How were they not able to move fast enough? What were they thinking?
Do you know those questions can be asked of pretty much every information technology CEO who has reported so far, with the exception of SanDisk
Unless companies are specifically built for cloud or mobile and have the cost structures and infrastructure in line with those two themes, they just couldn't deliver what investors wanted.
How about cloud? SAP
Meanwhile, Sandisk, often considered to be the lightweight of techs because of its focus on flash, blew the numbers away because flash is in the sweet spot of mobile. Xilinx also reported a terrific number because it saw mobile and the accelerated move to video coming. But still, because of weakness in Asia, Xilinx gave a muted outlook. I think they were just being conservative, but it did cause the company to catch a downgrade and muted the original excitement.
Now, after these reports, there is no doubt whatsoever that the old-fashioned, expensive software that's sold by salespeople to institutions with hefty licensing fees may rapidly become a thing of the past. That's a high-margin business.