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Why software stocks are getting pummelled

economist.com

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Re: Why software stocks are getting pummelled

#221

Post by lmm »

rglullis wrote: post #211
lmm wrote: post #193

Earlier quoted context omitted.

Ok, but if your competitors are getting/using software from a supplier who has real software engineers, and using that to operate at a higher level of reliability, then the same argument goes through.

Sorry, but that logic is pure cope. If you want to go down the value chain, then by definition the less valuable the software is and the easier to be commoditized. The automation is not going to help just the manager-turned-vibecoder, it's also going to help professionals to create FOSS alternatives that can be robust enough. It's not going to happen overnight, but the trend is there.

> If you want to go down the value chain, then by definition the less valuable the software is and the easier to be commoditized.

I'm not sure that holds for what we're talking about - high-value software can afford to be somewhat flaky because it delivers enough value when it works to make up for it, software that's only marginally worthwhile needs to be reliable because if it isn't then it's not worth the bother. Commoditized fields are more competitive.

> The automation is not going to help just the manager-turned-vibecoder, it's also going to help professionals to create FOSS alternatives that can be robust enough.

Not convinced. In my experience these tools don't really help with creating high-quality software. Maybe they'll get there eventually (at which point we're all out of a job), but right now they can't "hit the high notes".

Re: Why software stocks are getting pummelled

#222

Post by jlarocco »

WarmWash wrote: post #214
robocat wrote: post #196

Earlier quoted context omitted.

Was the custom tool developed by copying how the existing software worked? Copying existing functionality is not always possible, and doesn't capture the real costs.

No, it is incredibly streamlined because it tailored specifically to achieve this modernization. The paid program can do it because it can accept these files as an input, and then you can use the general toolset to work towards the same goal. But the program is clunky an convoluted as hell. To give an example, imagine you had tens of thousands of pictures of people posing, and you needed to change everyone's eye colo…

I think use cases like that will be where "AI" has the biggest wins.

That's a task that I could automate as a developer, but other than LLM "vibe coding", I don't know that there's a good way for a lay person to automate it.

Re: Why software stocks are getting pummelled

#223

Post by skissane »

kulor wrote: post #134
coliveira wrote: post #103

Earlier quoted context omitted.

In the case of Photoshop it is the software itself that is becoming useless. In a few years, using photoshop will be viewed the same as developing physical film, a process from a by-gone era that is still possible, but impractical.

I've recently re-instated a Photoshop subscription and its now part of my core AI generated asset workflow. AI is fantastic at art direction but it needs minor adjustments to make it production ready. E.g putting real screenshots in with correct placement, smoothing, editing out artefacts etc. I can't imagine the lengths I'd have to go to to instruct an LLM to do these tasks with words.

How much of what you do with Photoshop could be done with open source tools instead (GIMP, ImageMagick, etc), versus how much do you really need Photoshop for?

One technique I’ve used for cleaning up AI-generated images, was a Python script driving ImageMagick-and an LLM helped write the Python script (although it took a few iterations, because the LLM’s first attempt didn’t actually work)

Re: Why software stocks are getting pummelled

#224

Post by username223 »

bobsmooth wrote: post #208
marcus_holmes wrote: post #190

Earlier quoted context omitted.

> I don't see anyone cooking up the next photoshop and selling it at $3/month. That's not the situation we're talking about though. It's someone saying "hmm, I need to edit this picture. Can I get ChatGPT to do it?" where 3 years ago they would have had to buy Photoshop and learn how to use it. Similarly, if they need a tool to batch-convert a thousand images, they're getting an LLM to construct the specific tool the…

>they're getting an LLM to construct the specific tool they need in a couple of hours and then running that This is something I really hope takes off for the common person. ChatGPT is perfect for bespoke little programs that do one thing and can be discarded after use.

> bespoke little programs that do one thing and can be discarded after use.

That's my best-case scenario as well: LLMs are scripting languages for a broader audience. They just barely automate busywork, but are not a reliable foundation.

Re: Why software stocks are getting pummelled

#225

Post by rglullis »

lmm wrote: post #221
rglullis wrote: post #211

Earlier quoted context omitted.

Sorry, but that logic is pure cope. If you want to go down the value chain, then by definition the less valuable the software is and the easier to be commoditized. The automation is not going to help just the manager-turned-vibecoder, it's also going to help professionals to create FOSS alternatives that can be robust enough. It's not going to happen overnight, but the trend is there.

> If you want to go down the value chain, then by definition the less valuable the software is and the easier to be commoditized. I'm not sure that holds for what we're talking about - high-value software can afford to be somewhat flaky because it delivers enough value when it works to make up for it, software that's only marginally worthwhile needs to be reliable because if it isn't then it's not worth the bother. C…

> Commoditized fields are more competitive.

Doesn't that also lead to the conclusion that "software engineers" are going to lose their ability to command high salaries, if the real value is in the domain expertise and not in the ability of optimizing some part of the business process?

Re: Why software stocks are getting pummelled

#226

Post by lmm »

rglullis wrote: post #225
lmm wrote: post #221

Earlier quoted context omitted.

> If you want to go down the value chain, then by definition the less valuable the software is and the easier to be commoditized. I'm not sure that holds for what we're talking about - high-value software can afford to be somewhat flaky because it delivers enough value when it works to make up for it, software that's only marginally worthwhile needs to be reliable because if it isn't then it's not worth the bother. C…

> Commoditized fields are more competitive. Doesn't that also lead to the conclusion that "software engineers" are going to lose their ability to command high salaries, if the real value is in the domain expertise and not in the ability of optimizing some part of the business process?

> Doesn't that also lead to the conclusion that "software engineers" are going to lose their ability to command high salaries, if the real value is in the domain expertise and not in the ability of optimizing some part of the business process?

I mean the job has always required both - just being good at leetcode isn't enough to get paid well (except perhaps where there is a dysfunctional interview process), the key skill is being able to translate back and forth between the world of software and the world of business. Regular folk seemingly still find it difficult to think rigorously, in the way that fully correct automation requires, and AI hasn't actually helped with that any, so I think people with that skill will still command a premium. Work that doesn't benefit from rigour - being able to slap together a quick marketing site on wordpress or what have you - will pay badly if at all, but that was already the low end of the industry I think.

Re: Why software stocks are getting pummelled

#227

Post by h4kunamata »

christkv wrote: post #75

The cleanup needed after this by senior developers will be epic.

Needed??

It already started, freelancer developers are making a lot of money already.

I remember watching a developer having to fix the company entire code because they went full AI and now nobody knows shit anymore. If you are a good senior developer indeed, now is the best time for you to become millionaire.

Company after company can no longer fix things, they are bringing external developers to keep afloat. Remember the tweet popular last year with the AI bot deleting the production database setting the company back to zero???

So....

Re: Why software stocks are getting pummelled

#228

Post by forgetfreeman »

kube-system wrote: post #186
forgetfreeman wrote: post #86

Earlier quoted context omitted.

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

Do you forget how much different offices looked back in the 90s?

No, no I don't. I also remember what tech sales looked like in the 90s and aughts. Jokes about strippers and blow were a cliche for a reason.

Re: Why software stocks are getting pummelled

#229

Post by danielmarkbruce »

robocat wrote: post #194
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…

> So what happens is a corporation ends up spending a lot of money for a square tool [SaaS] that they have to hammer into a circle hole. You are assuming that corporations have the capability to design the software they need. There are many benefits to SaaS software, and some significant costs (e.g. integration). One major benefit of SaaS is domain knowledge and most people underestimate the complexity of even well k…

this is true in many cases and not in many cases. Another true one is payments - it's complex AF and and no one will sit down and vibe code it. A CRM? Easy in many cases. Some workflow tool? Easy, they know the exact workflow.

So, sure, some products will go the way of the dodo and some will not.

Re: Why software stocks are getting pummelled

#230

Post by danielmarkbruce »

jayd16 wrote: post #200
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…

Why waste your time on something that isn't your core business when, presumably, the SAASes of the world will use the new tech and lower prices as well?

In most cases they can't. The cost they face is sales and marketing. Acquiring a customer costs money. Churn happens.
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