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Patio11's Law: The software economy is bigger than you think

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Re: Patio11's Law: The software economy is bigger than you think

#301

Post by lol636363 »

tlb wrote: post #59

The metal economy is huge. Almost every product requires metal. But metallurgists don't take home a big fraction of it. What's special about the software economy is that people who write the software take home a large fraction of it. Maybe more than half, depending how you count. Which is unprecedented. It's not just because software can be zero marginal cost. Musicians don't take home half of music revenue. In most…

And just because in other industries people are used to taking smaller portions of revenue they generated, doesn't mean that we should do same.

Also unlike in some creative industries, software engineers tend to have higher education and are better able to understand their economic contributions.

Re: Patio11's Law: The software economy is bigger than you think

#302

Post by TheSpiceIsLife »

mikekchar wrote: post #201
sidlls wrote: post #121

Earlier quoted context omitted.

" people who write the software take home a large fraction of it. Maybe more than half, " Where do you get that figure? The vast majority of people writing software are not paid enough salary + benefits to come anywhere close to 50% of the revenue their work is responsible for earning.

It's a good point. It varies widely depending on the industry, but even in the software industry a good rule of thumb is that IT costs about 10% of revenue (some places are as high as 30%, some as low as 2%). But that includes all the management (not executive management) and support staff. The spend for sales and marketing is much higher than development (though sometimes most of that goes out of the company, paying…

> IT costs about 10% of revenue (some places are as high as 30%, some as low as 2%).

That’s the total expense, right? Not just employee remuneration.

Re: Patio11's Law: The software economy is bigger than you think

#303

Post by Cthulhu_ »

ehnto wrote: post #298
NikolaNovak wrote: post #13

Earlier quoted context omitted.

That is fascinating to me, because virtually all my friends have heard of SAP outside of IT - as users or recipients. My engineer friend uses it for supply chain management, a beer store hq clerk helped implement it, construction accountant has used it, etc. At the same time, I guess you have to be at a company of a certain size for it to be relevant to your life... But that perhaps proves the point - HN is very star…

A lot of HN topics are about tooling for startups. Those tools are sometimes startups themselves, which can can make HN feel like a bit of a bubble I think. Software for software developers can be a huge focus here, but it's just scratching the surface of software for the rest of the world. I was startled when I applied for a job at a company in my city, and they told me their product was entirely API connectors for…

You won't need sexy VC capital if you can build a business that runs a good profit. Honestly I'm getting more and more cynical of the SF bubble that doesn't seem to be about making great software, but about getting a lot of investor money and going public - prioritizing short-term profits at the expense of the consumer and employees.

Re: Patio11's Law: The software economy is bigger than you think

#304

Post by risyachka »

tlb wrote: post #59

The metal economy is huge. Almost every product requires metal. But metallurgists don't take home a big fraction of it. What's special about the software economy is that people who write the software take home a large fraction of it. Maybe more than half, depending how you count. Which is unprecedented. It's not just because software can be zero marginal cost. Musicians don't take home half of music revenue. In most…

First of all, software is not a creative industry. Creatives always took home a small fraction for many obvious reasons.

Software solves hard problems it is constantly evolving and updating so you need lots of personnel to maintain it, with a lot of knowledge so it will never be cheap, and great engineers to create it in the first place.

Take away a bunch of artists nothing will change. Take away a bunch of critical software - the world will stop.

So no, it will last and it will last long, as the world becomes more and more technological.

It is unprecedented because software and computer world in general is a huge breakthrough and is only 30 years old. Music on the other hand is thousands of years.

Re: Patio11's Law: The software economy is bigger than you think

#305

Post by risyachka »

jayjader wrote: post #270
pif wrote: post #240

Earlier quoted context omitted.

Musicians write music. Developers write and maintain software. Imagine there's no Version, it's easy if you try... Really, no concept of version: you buy a piece of software as it is, take it or leave it! Either it works enough for you or it doesn't. No bugfix in the next release because there is NO next release. The musician, ehm... developer, has switched to the new shiny thing. You modified yoour environment sligh…

One could argue the comparison still holds for developers of video games - as long as the game's code is not touched upon release. Used to be the norm, nowadays admittedly seems to be disappearing.

Also the amount of skilled professionals needed to write a song and to write a game is slightly put - different.

A song surely requires a skilled professional. But a game required dozens of those, with years of experience and lots fo time.

Creative industries get way lower pay because the skill level needed is low compared to many others, like law, medicine etc.

If you are talented you can paint great pictures or be a great guitar player in 1-2 years.

To be a good doctor you need what? like 10? 20 years?

Re: Patio11's Law: The software economy is bigger than you think

#306

Post by mbesto »

cambalache wrote: post #34
_bxg1 wrote: post #7

I remember reading this article about SAP a few months ago, and it just blew my mind: https://retool.com/blog/erp-for-engineers/ Here was an entire market segment I'd never heard of, and just the market leader is worth $163B . And on top of that, the technology is so totally alien to anything I'd ever heard of before. It's like an alternate-history kind of thing. Like if we discovered a continent somewhere in the Pac…

Want your mind to be blown even more? I worked for a multinational company, I would not be surpised that this company is among the top 10 SAP customers worldwide. Well, everybody hated hated hated SAP, it was a huge hindrance instead of any help.Any use beyond of a "dumb" database was a huge PITA, and I am not fully convinced that all in all it helped more than damaged the business. It was clunky, unintutive, slow, u…

> but in my fantasy world I would like to develop some program and would be very happy to skim 0.00001% of their income.

Which is exactly what SFDC, NetSuite, etc have done. There's definitely room here.

Re: Patio11's Law: The software economy is bigger than you think

#307

Post by allendoerfer »

mister_hn wrote: post #263
_bxg1 wrote: post #7

I remember reading this article about SAP a few months ago, and it just blew my mind: https://retool.com/blog/erp-for-engineers/ Here was an entire market segment I'd never heard of, and just the market leader is worth $163B . And on top of that, the technology is so totally alien to anything I'd ever heard of before. It's like an alternate-history kind of thing. Like if we discovered a continent somewhere in the Pac…

SAP was just nominated (together with Deutsche Telekom) the contractor for the official German Vivid tracking app (Covid-warn-App), just saying

I really don't get why they did not award an agency with a proven track record of delivering apps. If you choose one of the big ones, you still have high rates, but at least there is a chance of actually getting it done.

SAP is known for incredibly long ongoing projects and Deutsche Telekom has a track record of destroying acquired online businesses. I would bet 10:1, that this project will fail.

Re: Patio11's Law: The software economy is bigger than you think

#308

Post by TheSpiceIsLife »

risyachka wrote: post #304
tlb wrote: post #59

The metal economy is huge. Almost every product requires metal. But metallurgists don't take home a big fraction of it. What's special about the software economy is that people who write the software take home a large fraction of it. Maybe more than half, depending how you count. Which is unprecedented. It's not just because software can be zero marginal cost. Musicians don't take home half of music revenue. In most…

First of all, software is not a creative industry. Creatives always took home a small fraction for many obvious reasons. Software solves hard problems it is constantly evolving and updating so you need lots of personnel to maintain it, with a lot of knowledge so it will never be cheap, and great engineers to create it in the first place. Take away a bunch of artists nothing will change. Take away a bunch of critical…

> Take away a bunch of artists nothing will change. . Take away a bunch of critical software - the world will stop.

Is that right?

Is there any evidence that a society can exist without art?

There’s an overwhelming body of evidence that suggests it can do so without software.

Re: Patio11's Law: The software economy is bigger than you think

#309

Post by ebiester »

Jestar342 wrote: post #292
NikolaNovak wrote: post #13

Earlier quoted context omitted.

That is fascinating to me, because virtually all my friends have heard of SAP outside of IT - as users or recipients. My engineer friend uses it for supply chain management, a beer store hq clerk helped implement it, construction accountant has used it, etc. At the same time, I guess you have to be at a company of a certain size for it to be relevant to your life... But that perhaps proves the point - HN is very star…

I worked for EDS from late 90s to early 00s and SAP was _everywhere_. Projects were scoped and framed as "how can we fit this into SAP?" - and not "how can SAP help this project?" SAP is/was virulent in nature. If you used it for one thing it damn near forced you to use it for everything. A significant chunk of the work EDS were undertaking (as IT outsource) was migrating to SAP. Our timesheets, project plans, data,…

That... explains a bit of the herding cats commercial.

Re: Patio11's Law: The software economy is bigger than you think

#310

Post by AnIdiotOnTheNet »

pif wrote: post #240
tlb wrote: post #59

The metal economy is huge. Almost every product requires metal. But metallurgists don't take home a big fraction of it. What's special about the software economy is that people who write the software take home a large fraction of it. Maybe more than half, depending how you count. Which is unprecedented. It's not just because software can be zero marginal cost. Musicians don't take home half of music revenue. In most…

Musicians write music. Developers write and maintain software. Imagine there's no Version, it's easy if you try... Really, no concept of version: you buy a piece of software as it is, take it or leave it! Either it works enough for you or it doesn't. No bugfix in the next release because there is NO next release. The musician, ehm... developer, has switched to the new shiny thing. You modified yoour environment sligh…

> Developers write and maintain software.

Which explains why they are so in love with evergreen software that constantly changes things largely for the sake of changing them I suppose.

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