Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Glenn Greene - Oppenheimer & Co..
Glenn Greene - Oppenheimer & Co.
I guess the first quarter, Lee, if you could just give a little bit more color on the environment and what you're seeing and sort of a little bit of more color on why the software and professional services were so weak and what you're seeing in terms of the pipeline opportunities going forward?
Lee A. Kennedy
I think to answer that question let's go back and take a look at what we actually saw last year. Last year, in spite of a very difficult economy, software sales actually increased 5% year-over-year and professional service revenue increased in the 6% to 7% range. And a lot of those sales took place towards the latter part of the year, which I think everyone will pretty much agree that the environment really weakened a little bit as we moved throughout the year.
When you look at the shortfall that we had in the first quarter, it was on or around the $25 million range. And let me break it down for you so you see clearly where it came from.
About $5 to $7 million of that shortfall came from our check business, with more erosion and lower usage than what we actually anticipated when we put the plan together; $15 million came from lower professional services, and about $10 million came from software being lower than what we expected or what we had actually planned for. So if you add those two up, about $25 million were driven by fewer discretionary dollars being spent on software projects, not only domestically but also throughout the world. It's a very volatile segment of our business. It doesn’t come on evenly.
And I'll say this, that as we look at the quarter itself it strengthened somewhat as we moved towards the very end of the quarter and strengthened a little bit as we moved into April. So still the same type of volatility that we've seen in the past, all related to the spending that is more discretionary than not or discretionary in nature. So the environment really hasn't improved.
I can also add this comment, that our ability to sell software into the market is really governed to a large extent by the banks and how they feel in any given point in time. And I think what we've seen in the first quarter is it's remained very volatile. Spending has been driven by the news of the day or the event of the day. We're still not at the point in time that I would consider the market stable and secure and predictable. I think that will continue on through the year. I think there will be pressure on discretionary spending, but I think we'll look towards some improvement as we move into the second half.
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