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Why software stocks are getting pummelled

economist.com

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Re: Why software stocks are getting pummelled

#81

Post by falloutx »

SimianSci wrote: post #50

The Value of software is going down, this much is clear to most people. It will continue to demand proper engineering for its creation and operation. But AI will lead to an increase of unique one-of-a-kind systems created by very small teams. And the world will increasingly rely on these unique systems. SaaS companies need to start reading the writting on the wall, their massive valuations enjoyed when software was h…

Everyone says that but I don't see anyone cooking up the next photoshop and selling it at $3/month. Why are we not seeing more options of every tool? Most Saas companies are sales companies at their core rather than software companies. And those sales people are so good that they can sell a todo list for millions.

Re: Why software stocks are getting pummelled

#82

Post by forgetfreeman »

paulpauper wrote: post #74
mattmaroon wrote: post #37

Earlier quoted context omitted.

A lot of these companies are not small monthly fees. And if you’ve ever worked with them, you’ll know that many of the tools they sell are an exact match for almost nobody’s needs. So what happens is a corporation ends up spending a lot of money for a square tool that they have to hammer into a circle hole. They do it because the alternative is worse. AI coding does not allow you to build anything even mildly complex…

Modern AI probably could’ve done almost all of the work for him. no way. We're not talking a standalone AI created program for a single end-user, but entire integrated e-commerce enterprise system that needs to work at scale and volume. Way harder.

I also have pretty hefty skepticism that AI is going to magically account for the kinds of weird-ass edge cases that one encounters during a large data migration.

Re: Why software stocks are getting pummelled

#83

Post by agentultra »

... because they've been driven by years of bad leadership, monopolistic scheming, and investor speculation?

AI is just the latest symptom, IMO.

We normalized growth over revenue. Governments around the world have been pressured by Big Tech to dismantle anti-trust and regulation. We glorified shipping slop, suppressing unions, and pretending like programmers were temporarily embarrassed founders.

The stocks are dropping because our system can't sustain these practices, IMO.

Re: Why software stocks are getting pummelled

#84

Post by SimianSci »

themafia wrote: post #56
SimianSci wrote: post #50

The Value of software is going down, this much is clear to most people. It will continue to demand proper engineering for its creation and operation. But AI will lead to an increase of unique one-of-a-kind systems created by very small teams. And the world will increasingly rely on these unique systems. SaaS companies need to start reading the writting on the wall, their massive valuations enjoyed when software was h…

> this much is clear to most people. There are more computers now than there ever have been. More people in more parts of the world have them than ever before. If you have this perspective you may just be locked in a first-world corporate nightmare that has stolen from you all vision and imagination.

Perhaps the it would be better described as "commodification" of software, which still gets my point across. Software is absolutely more ubiquitous than ever before, this I can agree upon. But now we have the tools to create more of it, and therefore software is less valuable simply as it is less rare. I dont mean to say that software is valueless, but rather that it enjoyed inflated value as the amount of capital and effort required to build a software product was much greater.

Re: Why software stocks are getting pummelled

#85

Post by falloutx »

likium wrote: post #47
grwbx wrote: post #26

What an odd article that is just designed to hype the software creation aspect, which doesn't really affect MAGAF. MSFT went down because of overexposure in AI and because it is clear that people do not want it. AI weariness is a thing, and if people go off the Internet or advertisers question whether humans or AI swarms are "watching" their ads it is over for the big players. Trying to salvage the situation by hypin…

HN crowd did not like AI coding until it got better. How much of the AI hate is because of poor implementation?

I guess you can classify over-implementation as poor implementation.

Re: Why software stocks are getting pummelled

#86

Post by forgetfreeman »

kube-system wrote: post #60
rglullis wrote: post #41

Earlier quoted context omitted.

> AI-generated code still requires software engineers No, they don't. A domain expert armed with an Excel spreadsheet and the ability to write VBA macros will be enough for most business.

I guess that's technically true, because "most businesses" are sole proprietorships without any employees... but they could get by just fine with a checkbook and a note pad. But the reasons the business software sector grew far beyond Excel of the 1990s is because of the inherent limitations in scaling solutions built by business analysts inside of Excel. There's a vague cutoff somewhere in the middle of the SMB mark…

Uh, no. The main reason the software sector grew in the 90s was a particularly potent combination of FOMO, kickbacks, and strategically deployed cocaine.

Re: Why software stocks are getting pummelled

#87

Post by datsci_est_2015 »

mattmaroon wrote: post #37
lateforwork wrote: post #6

> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.

A lot of these companies are not small monthly fees. And if you’ve ever worked with them, you’ll know that many of the tools they sell are an exact match for almost nobody’s needs. So what happens is a corporation ends up spending a lot of money for a square tool that they have to hammer into a circle hole. They do it because the alternative is worse. AI coding does not allow you to build anything even mildly complex…

Our company just went through an ERP transition and AI of all kinds was 0% helpful for the same reason it’s difficult for humans to execute: little to no documentation and data model mismatches.

Re: Why software stocks are getting pummelled

#88

Post by falloutx »

eknkc wrote: post #44
iamleppert wrote: post #20

Meanwhile, in the real world, as a software developer who uses every possible AI coding agent I can get my hands on, I still have to watch it like a hawk. The problem is one of trust. There are some things it does well, but its often times impossible to tell when it will make some mistake. So you have to treat every piece of code produced as suspect and with skepticism. If I could have automated my job by now and bee…

Yeah but just look at what happened within the last 2 years. I was not convinced about the AI revolution but I bet in another 2 years, we won't be looking at the output..

Tech can always hit a plateau, here's to hoping anthropic & openAI run out of money.

Re: Why software stocks are getting pummelled

#89

Post by luke5441 »

_pdp_ wrote: post #31

I was one of the nay sayers but right now I am convinced. That being said, it still requires some engineering background to come up with interesting ideas and solutions with the help of LLMs but even that might be replaced.

So you disagree with the article? Could you explain your reasoning?

Re: Why software stocks are getting pummelled

#90

Post by Shalomboy »

Sleaker wrote: post #68
keeda wrote: post #43

Earlier quoted context omitted.

Hmm, I wonder if it would be cheaper to hire a couple of software engineers to vibe-code custom SaaS apps on top of the company's existing data layer instead of paying for a hundred different SaaS subscriptions. Financial considerations aside, one advantage of having in-house engineers is that you can get custom features built on-demand without having to be blocked on the roadmap of a SaaS company juggling feature re…

I'm at a large company that is building connections between all of its different financial systems. The primary problem being faced is NOT speed to code things, the primary problem at large companies is getting business aligned with tech (communication) and getting alignment across all the different orgs on data ownership, access, and security. AI currently doesn't solve any of this. Throw in needing to deal with reg…

Agreed. The SWEs already receive a steady supply of conflicting demands from every possible business unit; the value add for these teams is a working PMO to prioritize the requests coming in.
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