Entrust

In the first of the preliminary earnings misses, both Websense and Entrust announced the fact that they'll be light from a revenue standpoint this quarter. Websense is down about 10% this morning, indicating that it wasn't a huge surprise. Huge surprises take 30% haircuts.

Welcome to the party Gene Hodges, Websense's new CEO. His timing seems to be perfect. NOT! They are blaming sales execution issues, so expect some public executions in the sales force quickly. There always needs to be a fall guy/gal. Should Websense customers be worried? Not yet. They are still the clear leader in the web filtering business, the question is just whether this is the law of large numbers kicking in, or whether they are losing to more aggressive competitors. They do mention that price points are holding, so that's a good sign.

There is also a chance that Hodges is using this quarter as his opportunity to clear the decks. That's pretty common when there is a new sheriff in town. You blame the former regime while you're still in the honeymoon phase and you sweep lots of stuff under the rug. Of course, you only get to do this once, so everyone will be watching to see if this is systemic or a one-time thing in Q2.

Entrust is a bit more problematic. It's not like these guys have been a market leader in anything since PKI fell from grace as the bubble burst. But they couldn't close deals and their "new" products didn't yield the deal sizes they need. Starting to sound like a candidate for the "Hall of the Walking Dead." I'll be watching for that.

We'll also see if there are more pre-announcements over the next few weeks. Early indications are that many of the start-ups had relatively strong quarters.

Of course, we'll get a lot more information about these misses when the company formally announces results in a few weeks.