Business-Software Companies Say Customers Are Pulling Back Amid Economic Concerns

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Business-software companies Salesforce, Okta and CrowdStrike say clients are delaying certain purchases and becoming more cautious

Holdings Inc. are taking longer to sign deals, and in some cases slowing their hiring plans as they try to protect their bottom lines, the software providers reported this past week. That trend has created a cloudy outlook for many in the once-booming business-software sector, which benefited from years of demand as customers looked to use the products to trim costs and maintain their businesses during the pandemic.

“Certainly, the buyer environment has changed out there in the market. It’s become more measured,” Brian Millham, chief operating officer at Salesforce, said on an analyst call. Salesforce didn’t provide a revenue forecast for the next fiscal year, as it often does around this time, with Chief Financial Officer Amy Weaver pointing to the “very unpredictable macro environment.”

Salesforce said its business customers are adopting behaviors typically seen in an economic downturn, such as laying off workers, delaying hiring and slashing expenses in areas such as marketing.

Still, Mr. McKinnon warned of “a global macro environment that we anticipate becoming worse before it improves.”

 

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