@rennyzucker I think that’s a bigger concern when you’re leasing hardware than when you’re selling software
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MrRatable
3.3K posts
@MRatable I mean this is the MSFT pricing bear thesis, that it might be additive right now but when downstream customer spends get crunched (which seems pretty likely given rumored RIFs/capital allocation) it’s uncertain how much of that cannibalizes itself.
Hence the concern over margins
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If software companies are selling enough ai product to impact their gross margins, absolutely no one will care about their gross margins
Hemingway Capital@lfg_cap
I think there's still pain in Software to come. @satyanadella told you that you have to be willing to halve margins to address this much larger opportunity. I don't think most software companies will be able to pivot. You need: 1/ the willingness to take gross margins down to build agents and end-to-end workflows that actually don't break and handle context limits 2/ the talent to do it and get the tooling right 3/ the will to disrupt your own pricing model (worse impact to OP than perp license -> subscription in the near term). Very few of these can or will do all three at once.
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@Compounds365 Agree that it makes the old growth algos harder but my point is if you’re winning a piece of the (much larger) labor budget you will grow faster than you did before.
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Not necessarily but could cannibalize the feature creep + price hike that would otherwise have happened.
And likely at much lower gross margins.
So far public SaaS as a group have not really seen any acceleration or margin improvement from AI and it’s been > two years.
Meanwhile OAI and Ant are growing 100% a year making coding tools.
Public SaaS is clearly losing share.
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@rennyzucker In almost all realistic scenarios, AI revenue does not replace the previous revenue, it adds to it
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@MRatable Flows through to the bottom line all the same so not sure I agree with this. GMs in a vacuum in software are low signal anyway.
Feel like people said the same thing about RNG sales tactics a few years ago.
“They can outgrow the negative incrementals”
But they couldn’t
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@Compounds365 Adding new streams of revenue does not mean losing existing revenue.
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@MRatable They’d have to sell a LOT more AI product to offset the impact of what could be 1000-2000 bps of lower margin.
So far little evidence of this for most. And they’re losing share to the private labs.
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Jeff Yass punching the air rn
Negligible Capital@negligible_cap
SEC Preparing Proposal to Eliminate Quarterly Reporting Requirement, Sources Say -- WSJ Regulator could publish the proposal as soon as next month, which would then be subject to a public comment period of at least 30 days where the SEC will vote
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The thesis of this short report is that VIA is not a software business, which now reads like a bull thesis.
Bleecker Street Research@Bleecker__St
Bleecker Street is short Via Transportation (VIA) Link: bleeckerstreetresearch.com/research/via
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I love when people talk about themselves in the third person
Murray Hill Guy@MurrayHillGuy1
Friend of a friend (idk him) has gone on 1000+ Hinge dates. Bald. 5’7. Pretty chubby. Gets tons of first dates but the conversion is brutal: • 2nd date: ~1 out of 15 • 3rd date: ~1 out of 50 Has never once considered getting in better shape or improving himself, getting a dating coach, etc. His main mission in life is to find a wife. His conclusion: “It’s just a numbers game. Women are the problem.” How cooked is he?
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Maybe if Atlassian had a better collaboration system these types of errors could be avoided
tyler hogge@thogge
One thing is 100% clear to me: With very few exceptions, tech cos are some of the worst operated businesses in the history of capitalism exhibit A: Atlassian -25 yrs old -hasn’t been profitable for a decade -promoted an engineer the same day he was laid off This is the rule.
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True but does Marc Beinoff want to become the Dustin Moskovitz of Michael Dell’s?
dalibali@dalibali2
It’s actually achievable for benioff to take Salesforce private
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There was a time not too long ago when every hedge fund bro was ADAMANT that Netskope was going to kill Zscaler
MrRatable@MRatable
I bet if Netskope was public people would put it in the same bucket as Sentinel One within a year
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This tweet brought to you by 2022
Hunter SPX Thompson ❎@CoorsLightCEO
$TEAM doing what EVERYONE in midcap software needs to do
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The new em dash is when someone writes "that's not a ___. that's a ____."
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If only there was a tool or set of tools you could use to minimize downtime and identify issues faster
SPEC@___4o____
OAI and Claude both dropped to 98% uptime during February. Another data point: Github has had more outages in Q1 2026 than the entirety of 2016-2019, according to their status page. Software is objectively getting worse.
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