The software engineering industry in 2024: what changed in 2 years, why, and what is next

Summary

The speaker, known for 'The Pragmatic Engineer' newsletter, discusses significant shifts in the tech industry, particularly the impact of rising interest rates on job markets, VC funding, and IPOs. They compare current changes to past cycles, highlighting how smaller teams are achieving rapid growth, similar to Instagram's early days. The talk emphasizes adapting to a new reality with fewer job opportunities, slower career growth, and a push towards more practical engineering practices, while suggesting that AI tools can augment developers' productivity rather than replace them.

Takeaways

• 📰 The tech industry is experiencing significant changes, including shifts in the job market, VC funding, IPOs, and strategies within big tech companies.
• 🚀 Small teams are now able to move faster and build solutions more quickly than in the past, as seen with companies like Blue Sky and historical comparisons to Instagram's growth.
• 🔍 Feedback loops in software engineering are lengthening, with teams becoming less accountable for mistakes and more focused on passing issues to others.
• 📉 The job market has cooled down from the highs of 2021, with increased competition and a tougher environment for both new graduates and experienced engineers.
• 💹 Venture capital funding has seen a significant downturn, with 2024 levels returning to those of 2018, impacting the amount of money available to startups.
• 📈 The Federal Reserve's interest rate hikes to combat inflation have had a ripple effect on tech, influencing investment strategies and the viability of unprofitable companies.
• 🛑 Large tech companies, even those with record profits, are implementing layoffs, indicating a strategic shift rather than a necessity due to financial troubles.
• 💼 There is a trend towards more full-stack development, with engineers expected to handle multiple aspects of product development, from backend to frontend.
• 🔄 The industry may be returning to monolithic architectures, as the organizational benefits of microservices become less relevant for companies not rapidly scaling.
• 🛠️ There is a push towards 'boring technology' that solves business problems efficiently, reflecting a shift in focus towards stability and reliability over cutting-edge innovation.
• 🤖 AI and large language models are becoming increasingly important, with a significant portion of VC investment flowing into AI, suggesting a new technological revolution in the making.

Q & A

Who is the speaker known for writing and what topics does the newsletter cover?

The speaker is known for writing 'The Pragmatic Engineer', a newsletter that delves into big tech and startups. It discusses various topics including interviews with people working in these companies.

What is the significance of the book 'The Software Engineer's Guidebook' by the speaker?

The book 'The Software Engineer's Guidebook' is significant as it is another work by the speaker that provides guidance and insights into the field of software engineering, although the specific content is not detailed in the script.

What are the key companies the speaker has worked for in their career?

The speaker has worked for notable tech companies including Uber, Skype (during its time under Microsoft), Xbox One project, and JP Morgan, where they served as a software engineer and engineering manager.

What is the example given to illustrate how small teams are moving faster in the tech industry?

The example given is Blue Sky, a Twitter competitor, which was founded in 2022 and managed to reach 5.5 million users within a year with a small team of 12 developers, showcasing the rapid development and growth possible with small teams.

How does the speaker compare the growth of Blue Sky to a historical example?

The speaker compares the growth of Blue Sky to Instagram, which also experienced rapid growth with a small team, reaching millions of users within the first couple of years of its existence.

What is the observation made by Kent Beck about the current state of software engineering?

Kent Beck observes that feedback loops are getting longer, indicating a trend where teams are less inclined to take responsibility for mistakes and prefer to pass on problems to others.

What are the key areas of change discussed in the tech industry?

The key areas of change discussed are the job market, VC funding, IPOs, and shifts within big tech companies, including unexpected layoffs even among profitable companies.

What was the impact of the Federal Reserve's interest rate hike on the tech industry?

The Federal Reserve's interest rate hike, the largest in 28 years, has led to a decrease in VC funding, fewer IPOs, and a tougher job market, as the cost of capital increased and investors sought less risky investments with guaranteed returns.

Why did the speaker mention the smartphone and cloud computing revolutions in the context of low-interest rates?

The speaker mentioned these revolutions to highlight that the low-interest rate period coincided with significant technological advancements, which provided more reasons to invest in startups and led to the creation of many successful companies.

What is the new reality for software engineers as discussed in the script?

The new reality for software engineers includes tougher job markets with fewer available positions, increased competition, slower career growth, and the need to adapt to more efficient and sometimes less exciting technological choices.

What advice does the speaker give to software engineers in response to the changing tech industry?

The speaker advises software engineers to become more business or product-minded, to understand their company's business model, to build relationships with product managers, and to aim for career security rather than job security.

What is the speaker's perspective on AI and its impact on software engineers?

The speaker believes that AI, specifically large language models, will not replace developers but will serve as tools to make them more productive. They encourage engineers to make these tools their allies and to improve their workflows with them.