Software Bookings Were Weak Months Ago
When Software companies like Adobe (ADBE) guide weak for the March Q or for the year, they saw this weakness in their sales pipeline months ago.
Software companies are not running perpetual license revenue models circa 2003 which offered little revenue visibility. Software company management teams have far more visibility into their business than they ever share with investors (sales pipelines and bookings activity).
ADBE does not have the same pricing power as MSFT does to buffer slower unit growth. That’s the difference between the two companies.
Yet, MSFT will see further slowness on the 365 side despite the forced price increase associated with jamming Copilot down everyone’s throat. What a failure Copilot has been.
I’ve got to imagine as Enterprise customers cut heads, they will eventually get around to adjusting downward their Azure usage and service levels. It only takes a few clicks in the Azure dashboard, it’s just that corporate customers are not as “on the ball” about managing / adjusting technology expenses as one may think.
Related article: Soft Software Bookings, AI Mania and the Coming Economic Bailout