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

161–170 of 285 posts

Re: Why software stocks are getting pummelled

#161

Post by mwigdahl »

magicalist wrote: post #149
WarmWash wrote: post #140

Earlier quoted context omitted.

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 pro…

> It's not just a converter, it's a gui with the tools needed to facilitate a quick manual conversion. is this like a meta-joke? > 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. The funny thing about examples like this is that they mostly show how dumb and ineff…

It's not just a joke, it's a meta-joke! To address the substance of your comment, it's probably an opportunity cost thing. Programmers on staff were likely engaged in what was at least perceived as higher value work, and replacing the $250/mo subscription didn't clear the bar for cost/benefit.

Now with Claude, it's easy to make a quick and dirty tool to do this without derailing other efforts, so it gets done.

Re: Why software stocks are getting pummelled

#162

Post by camdenreslink »

fragmede wrote: post #136
louiereederson wrote: post #110

Earlier quoted context omitted.

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.

There is no way you would get anything close to as good as JIRA. Your best bet with that budget would be trying to integrate an existing open source on-prem solution (not sure what that alternative is for JIRA).

Re: Why software stocks are getting pummelled

#163

Post by esafak »

SimianSci wrote: post #92
nonethewiser wrote: post #79

Earlier quoted context omitted.

I dont actually think it changes the economics of software as a service much. What's true for the small scale is true for the large scale. Sure, it's easier to build your own HR platform now but it's also easier to write and maintain it at scale with all your domain knowledge, legal infrastructure, etc. This seems true for inventory management, document signing, ecommerce, expensing, crm, training, accounting, etc. W…

Consider it in the realm of supply and demand. The economics of software will change simply because the tool enables more software to be written. In a way, the barrier of entry into the space of selling software has lowered. It hasnt vanished, but there will be many more entrants and offerings as a result, thus more competition for the existing SaaS companies. I don't see how the economics of SaaS will remain the sam…

People could simply expect more of the software.

Re: Why software stocks are getting pummelled

#164

Post by nateglims »

bnchrch wrote: post #65
jen729w wrote: post #23

Earlier quoted context omitted.

You didn't read the article. The first graph plots Workday, Salesforce, SAP, and ServiceNow. Google isn't mentioned.

Maybe they shouldve said ERP stocks are getting "pummelled"

It basically does

> The value of listed American enterprise-software companies is down by 10% over the past year.

Re: Why software stocks are getting pummelled

#165

Post by ozim »

epolanski wrote: post #100
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.

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…

Ugh you are aware that Atlassian earlier was providing on-perm edition for years.

You also know how neglected those on-perm instances were?

No one updated those, no one wanted to pay for more CPU/RAM. File storage, I know people who had some random requests to cleanup files from projects because company wouldn’t buy more hard drives. Everyone was nagging at sys admins that they do bad job and at Atlassian that JIRA sucks.

That is mostly why Atlassian pulled off on premise because companies would not update at all, would like to have all new features and also not pay for file storage,RAM, CPU to make it work well.

Don’t forget you still will need to have dedicated employees to deal with AI built solution - because existing employees have work to do.

What we pay for JIRA and Confluence would never offset fact that we pay and it works, NOT A SINGLE EMPLOYEE CARES as they have their job to do.

Re: Why software stocks are getting pummelled

#166

Post by palmotea »

dehugger wrote: post #97
datsci_est_2015 wrote: post #87

Earlier quoted context omitted.

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.

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 no illusions about where the text he's reading came from.

If you're going to write documentation to distribute, you had better type out words from your own damn mind based on your own damn understanding with your own damn hands. Sure, use an LLM to help understand something, but if you personally don't understand, you're in no position to document anything.

Re: Why software stocks are getting pummelled

#167

Post by graeme »

magicalist wrote: post #149
WarmWash wrote: post #140

Earlier quoted context omitted.

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 pro…

> It's not just a converter, it's a gui with the tools needed to facilitate a quick manual conversion. is this like a meta-joke? > 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. The funny thing about examples like this is that they mostly show how dumb and ineff…

The problem with this reasoning is it requires assuming that companies do things for no reason.

However possible it was to do this work in the past, it is now much easier to do it. When something is easier it happens more often.

No one is arguing it was impossible to do before. There's a lot of complexity and management attention and testing and programmer costs involved in building something in house such that you need a very obvious ROI before you attempt it especially since in house efforts can fail.

Re: Why software stocks are getting pummelled

#168

Post by AstroBen »

If I were confident it were AI as the cause I'd be seriously tempted to buy right now

Take Adobe for example: they're getting pummeled and there's no way it's due to AI

No-one's building an in-house Photoshop clone to replace them

AI also isn't letting any competitors in. Geez if it were as easy as cloning their product you'd have a mile high mountain of VC money to fund it even pre-AI

Code has never been much of a barrier to entry

Re: Why software stocks are getting pummelled

#169

Post by lmm »

graeme wrote: post #167
magicalist wrote: post #149

Earlier quoted context omitted.

> It's not just a converter, it's a gui with the tools needed to facilitate a quick manual conversion. is this like a meta-joke? > 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. The funny thing about examples like this is that they mostly show how dumb and ineff…

The problem with this reasoning is it requires assuming that companies do things for no reason. However possible it was to do this work in the past, it is now much easier to do it. When something is easier it happens more often. No one is arguing it was impossible to do before. There's a lot of complexity and management attention and testing and programmer costs involved in building something in house such that you n…

> There's a lot of complexity and management attention and testing and programmer costs involved in building something in house such that you need a very obvious ROI before you attempt it especially since in house efforts can fail.

I wonder how much of the benefit of AI is just companies permitting it to bypass their process overhead. (And how many will soon be discovering why that process overhead was there)

Re: Why software stocks are getting pummelled

#170

Post by jmalicki »

louiereederson wrote: post #96
tossandthrow wrote: post #46

Earlier quoted context omitted.

That would justify a good multiple of 5 to 10. Not 30 or above as for high growth companies.

multiple of what? there is maybe one software company trading above 30x revenue - palantir. many companies growing at 20% trade at single digit revenue multiples.

Unqualified it almost always means earnings (profits).
Post reply on HN