Fred Thiel

Long-term value always accretes at the end, which is closest to the customer.

In the historical software world, it was always software, application software.

Hardware always commoditizes.

You look at the internet build out, you look at every single boom the industry has had, and I've worked in tech for 40 years.

I wish.

That was many years ago.

And so,

all the value accretes at the end.

If you look at why software stocks are getting hit so hard, it's because all of a sudden companies like Anthropic are showing that, hey, you know what that ERP system you have?

it doesn't have as much value.

The moat that SAP has is being eroded now by AI, because while you won't necessarily rip SAP out, you will, through agentic technologies, essentially generate the insights that the humans who would be operating SAP would have.

So you're stripping off a whole value layer off the ERP stack, CRM,

uh insurance drug discovery all these things and these agentic frameworks because of things like claude you can create them at insane speeds and so what's happening is the iterative speed of improvement and innovation that's happening is something that these large monolithic erp and sas application vendors can't deal with because their systems aren't built that way right um and so

If you look at this, it is going to be two and three man companies that build agentic frameworks for specific applications.

And it's going to be a fly in the pan because that company is going to be popular for about six to 12 months.

And then somebody is going to come right around and eat them.

And you're going to have huge volatility in this sector for the next five to 10 years, I think.

So what should people do?

I think you need to be really smart about looking at what is the long piece, the long pole, if you would, in the tent.

Energy is a core part, but energy utilities are energy utilities.