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

Business-software companies say customers are being more cautious with their spending in response to a challenging economy, adding to the tech industry's list of concerns. From a report: Customers for companies such as Salesforce, Okta and CrowdStrike 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. The San Francisco-based company, one of the largest vendors of customer-relationship-management software, said Wednesday that its clients in the tech, consumer-goods and retail sectors were pressured in the recent quarter, while the travel, hospitality and manufacturing sectors were among those showing more resiliency.

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