Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why software stocks are getting pummelled

economist.com

Post reply on HN
Print view View original

131–140 of 285 posts

Re: Why software stocks are getting pummelled

#131

Post by fragmede »

foobarian wrote: post #101
coliveira wrote: post #93

Earlier quoted context omitted.

> getting business aligned with tech (communication) and getting alignment across all the different orgs This is what a CEO is supposed to do. I wonder if CEOs are the ones OK with their data being used and sent to large corps like MS, Oracle, etc.

Makes me wonder if they are getting ripe for disruption. Not by a new business model, but a new operating model where a CEO will be tech/ai-aware and push through all these kinds of things.

There's definitely a market for on-prem solutions that don't involve sending all your data to someone else, while reaping the benefits.

Re: Why software stocks are getting pummelled

#132

Post by Sleaker »

coliveira wrote: post #93
Sleaker wrote: post #68

Earlier quoted context omitted.

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…

> getting business aligned with tech (communication) and getting alignment across all the different orgs This is what a CEO is supposed to do. I wonder if CEOs are the ones OK with their data being used and sent to large corps like MS, Oracle, etc.

I haven't seen what you're suggesting from a CEO at a large company that's primary business is non-software related. At some point in a businesses life theres an accumulation of so many disparate needs and systems that there can be many many layers of cross org needs for fulfilling business processes. This stuff is messy.

I think I saw it asserted that its easier for a new company, which definitely makes sense as you don't carry along all the baggage.

Re: Why software stocks are getting pummelled

#133

Post by paxys »

Is it AI or just the market realizing that some of these companies were ridiculously overvalued to begin with.

Here are the p/e ratios of companies mentioned in the article, after the said "pummeling":

* ServiceNow - 70.66

* SAP - 28.70

* Salesforce - 28.15

* Workday - 73.16

* Microsoft - 26.53

So they range from "a bit high" to "still completely bonkers".

Re: Why software stocks are getting pummelled

#134

Post by kulor »

coliveira wrote: post #103
falloutx wrote: post #81

Earlier quoted context omitted.

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.

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.

Re: Why software stocks are getting pummelled

#135

Post by bryanlarsen »

louiereederson wrote: post #120
bryanlarsen wrote: post #32

Earlier quoted context omitted.

The article is about SAP, Salesforce, etc. Making your own Google Docs is stupid unless your company's core business is document management. OTOH Replacing SAP with a bespoke system will make a lot of sense for many companies. SAP is already the worst of both worlds. It'll have been highly customized for your flow so you've got all of the headaches of bespoke software and all of the headaches of SaaS. And unlike Goog…

you are aware of the long history of organizations being absolutely screwed by bad erp implementations right? nike's 2001 issue, the horrific birmingham oracle implementation, avon, etc.

Those are examples of very good reasons to ditch i2, Oracle, SAP, et cetera.

Re: Why software stocks are getting pummelled

#136

Post by fragmede »

louiereederson wrote: post #110
epolanski wrote: post #100

Earlier quoted context omitted.

Atlassian tools for a client like mine (hundreds of employees) can easily cover the expense of internalizing it. It's Jira plus confluence mostly, it's not rocket science. And that's just atlassian. Start adding stuff that costs many many many yearly salaries (special software for managing inventories and warehouses) it starts making sense to prototype alternatives internally. I came to the conclusion that if it's no…

jira premium is $15/mo/user for 300 users. you're saying $50k can cover developing the app inclusive of integrations, maintaining it, providing 24/7 service and 3 9s uptime (per the sla)? don't forget compliance and security. maybe the logic is everyone can be fired and replaced with agents?

Yes. $50k goes a long way outside of the Bay Area.

Re: Why software stocks are getting pummelled

#137

Post by fragmede »

llmslave wrote: post #21
skissane wrote: post #7

Earlier quoted context omitted.

For a lot of SaaS firms, a big part of their value is the domain knowledge and best practices encoded in the software. Current AIs often do a bad job of that. Sure, they know a lot of it. But they also get a lot of it wrong, and can’t tell the difference between genuinely good advice, and advice that sounds good but is practically worthless or even harmful. (Of course I’m biased since I work for a SaaS firm. But I’m…

ai will know the domain knowledge

not if we don't tell it.

Re: Why software stocks are getting pummelled

#138

Post by chasd00 »

coliveira wrote: post #93
Sleaker wrote: post #68

Earlier quoted context omitted.

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…

> getting business aligned with tech (communication) and getting alignment across all the different orgs This is what a CEO is supposed to do. I wonder if CEOs are the ones OK with their data being used and sent to large corps like MS, Oracle, etc.

I work in large projects like this, the CEO doesn't get involved in the little "computer project" except during the project kickoff. Even then, it's just to "say a few words about the people I admire on this team". In large global companies these projects are delegated 3 or 4 levels below the CEO at the highest.

Re: Why software stocks are getting pummelled

#139

Post by chasd00 »

julienfr112 wrote: post #116
epolanski wrote: post #100

Earlier quoted context omitted.

Atlassian tools for a client like mine (hundreds of employees) can easily cover the expense of internalizing it. It's Jira plus confluence mostly, it's not rocket science. And that's just atlassian. Start adding stuff that costs many many many yearly salaries (special software for managing inventories and warehouses) it starts making sense to prototype alternatives internally. I came to the conclusion that if it's no…

I told to my colleague that it would take less time for me to vibe code jira that it would take him to configure it. Sounds crazy ? Not so much : factor the part of jira you use (maybe 10%), the many choices and dimensions you have to configure, the time it take and the complexity it bring. On the other side, the vibe code version have only the fields you want, most of the logic hard written in code (ie epic > story…

This reminds me of all the "i could turn the spreadsheet into a webapp in a weekend" type comments. Sure, you could get CRUD and a datatable working but then a user is going to ask you for a custom field and you'll say "ok let me vibe code that, update the database, and then deploy" but the user will say "well in Jira I could just to that myself...". Then the next thing they're going to ask is some kind of custom workflow utility which you'll then goto work vibe coding that feature and they'll say again "...but in jira that was already there". Meanwhile they'll ask you why they can't change the validation criteria on the custom field from before, they said it should be required but now there's a case where it's optional.

Pretty soon you're just re-implementing Jira while your users wait and get pissed because they could have just been using Jira all along. It's just like turning a spreadsheet into a webapp, inevitably you just end up trying to re-implement Excel.

Re: Why software stocks are getting pummelled

#140

Post by WarmWash »

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…

I have a prime example of this were my company was able to save $250/usr/mo for 3 users by having Claude build a custom tool for updating ancient (80's era) proprietary manufacturing files to modern ones. It's not just a converter, it's a gui with the tools needed to facilitate a quick manual conversion.

There is only one program that offers this ability, but you need to pay for the entire software suite, and the process is painfully convoluted anyway. We went from doing maybe 2-3 files a day to do doing 2-3 files an hour.

I have repeated ad-nausea that the magic of LLMs is the ability to built the exact tool you need for the exact job you are doing. No need for the expensive and complex 750k LOC full tool shed software suite.

Post reply on HN