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Why software stocks are getting pummelled

economist.com

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Re: Why software stocks are getting pummelled

#261

Post by rreichman »

aurareturn wrote: post #251
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.

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. But it's also much cheaper to develop an alternative SaaS offering, one that is perhaps more custom, nimble, cheaper than the general SaaS out there today. In the past, maybe it migh…

Which part of Figma can you build with 20 engineers? I think we're still not close to a small team building real-time collaboration software at scale that actually works at the quality level that customers expect.

Re: Why software stocks are getting pummelled

#262

Post by danielmarkbruce »

ManuelKiessling wrote: post #233
danielmarkbruce wrote: post #231

Earlier quoted context omitted.

It doesn't. The person is saying they built just the functionality they needed. Probably 25% of a CMS. That's the point.

Exactly. And the big advantage for us is two things: Our content marketers now have a "Cursor-light" experience when creating landingpages, as this is a "text-to-landingpage" LLM-powered tool with a chat interface from their point of view; no fumbling around in the Webflow WYSIWYG interface anymore. And from the software engineering department's point of view, the results of the work done by the content marketers are…

This is the benefit few understand properly. The storage layer is where you get a lot of benefits.

Re: Why software stocks are getting pummelled

#263

Post by dehugger »

heavyset_go wrote: post #219
dehugger wrote: post #97

Earlier quoted context omitted.

surprising considering you just listed two primary use cases (exploring codebases/data models + creating documentation)

Please don't feed people LLM generated docs

i love the assumption by default that "ai generated" automatically excludes "human verified".

see, i actually read and monitor the outputs. i check them against my own internal knowledge. i trial the results with real trouble shooting and real bug fixes/feature requests.

when its wrong, i fix it. when its right, great we now have documentation where none existed before.

dogfood the documentation and you'll know if its worth using or not.

Re: Why software stocks are getting pummelled

#264

Post by dehugger »

palmotea wrote: post #166
dehugger wrote: post #97

Earlier quoted context omitted.

surprising considering you just listed two primary use cases (exploring codebases/data models + creating documentation)

> creating documentation How is an AI supposed to create documentation, except the most useless box-ticking kind? It only sees the existing implementation, so the best it can do is describe what you can already see (maybe with some stupid guesses added in). IMHO, if you're going to use AI to "write documentation," that's disposable text and not for distribution. Let the next guy generate his own, and he'll be under n…

Whats with this assumption that there's no human involvement? I dont just say "hey scan this 2m loc repo and give me some docs'... that would be insane. T

he AI is there to do the easy part; scan a giant spaghetti bowl and label each noodle. The humans job is to attach descriptions to those noodles.

Sometimes I forget that people on this site simply assume the worst in any given situation.

Re: Why software stocks are getting pummelled

#265

Post by kube-system »

forgetfreeman wrote: post #228
kube-system wrote: post #186

Earlier quoted context omitted.

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.

Yeah, because they were in popular TV shows and movies.

Re: Why software stocks are getting pummelled

#266

Post by heresie-dabord »

highfrequency wrote: post #203

> Of course, ai will continue to improve. But it is also likely to get more expensive…Microsoft’s share price took a beating last week as investors winced at its enormous spending on the data centres underpinning the technology. Eventually these companies will need to demonstrate a return on all that investment, which is bound to mean higher prices. That’s not how it works, and I’m surprised this fallacy made it into…

> I’m surprised this fallacy made it into the Economist.

Fallacies in the Economist, you say without irony?

From TFA:

> Yet investors risk misdiagnosing the industry’s troubles.

Oh, I think investors are asking, "where is the actual gain in capability and/or productivity?" Because they don't see it. And huge lay-offs don't prove it.

> Of course, AI will continue to improve.

This is begging the question. However, for the sake of argument, let's assume that AI continues to improve.

The thing we call AI is a long way from improving robotics. It's most prevalent practical value right now is improved search and code/text information assistance. But these improvements themselves have proven to be far from perfect.

The only monetisable path that we have seen in search and information assistance is advertising. The AI boom walks and quacks like a duck: a bubble, and a dawning generation of new facets of enshittification.

Re: Why software stocks are getting pummelled

#267

Post by danielmarkbruce »

nasmorn wrote: post #240
danielmarkbruce wrote: post #229

Earlier quoted context omitted.

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.

Only the still meek vibe code payments, the truly brave simply install the Stripe MCP directly in their on site chat window

this is hilarious

Re: Why software stocks are getting pummelled

#268

Post by robocat »

ethbr1 wrote: post #243
jlarocco wrote: post #222

Earlier quoted context omitted.

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.

There are two forms of business software gen AI coding is 100% going to eat: 1. Simple CRUD apps 2. Long-tail / low-TAM apps Because neither of these make economic sense for commercial companies to develop targeted products for. Consequently, you got "bundled" generalized apps that sort of did what you wanted (GP's example) or fly-by-night one-off solutions that haven't been updated in decades. The more interesting q…

> I'd bet on in-housing

I wouldn't.

Knowing what to build is part that many businesses struggle with.

As much as consultants are lambasted, my experience of companies is that they struggle to develop or maintain anything in-house - even where it should theoretically make economic sense. https://news.ycombinator.com/item?id=46864857

Re: Why software stocks are getting pummelled

#269

Post by jeffkumar »

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.

I disagree. I think that DHH proved that is not the case with the AWS bill. They saved millions by getting off of it. As software is now 10x cheaper to create, it's going to really wipe enterprise value away from the incumbents. There's going to be companies in the middle where they are fed up with their bills and they innovate in house and get ahead building solutions that are even closer to what they want. Thankfully, this is good for the software market and gives jobs to all those who were laid off at the big tech companies. At least, that's my hope.

Re: Why software stocks are getting pummelled

#270

Post by heavyset_go »

dehugger wrote: post #263
heavyset_go wrote: post #219

Earlier quoted context omitted.

Please don't feed people LLM generated docs

i love the assumption by default that "ai generated" automatically excludes "human verified". see, i actually read and monitor the outputs. i check them against my own internal knowledge. i trial the results with real trouble shooting and real bug fixes/feature requests. when its wrong, i fix it. when its right, great we now have documentation where none existed before. dogfood the documentation and you'll know if it…

Literally several times a week, I have to close PRs with docs that clearly no one read because they are blatantly wrong. This happened after LLMs. If what you're claiming is happening, I'm not seeing it anywhere.

AI is incapable of capturing human context that 99.999% of the time exists in people's brains, not code or context. This is why it is crucial that humans write for humans, not an LLM that puts out docs that have the aesthetics of looking acceptable.

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