Generative AI has its benchmark use case: Developer productivity. Why? Software engineers are pricey and the returns on multiple fronts--costs, developer engagement and overall value creation--are hard to ignore.
In recent days, the intersection of software development and generative AI has been noted repeatedly. Panels at Constellation Research's Connected Enterprise (CCE 2023) covered the topic multiple times on automation and AI panels. In addition, CEOs including Amazon's Andy Jassy, Microsoft's Satya Nadella and Alphabet's Sundar Pichai all noted developer productivity gains with generative AI and outlined where enterprises are headed.
Today, generative AI is taking manual and rote tasks away from developers and boosting productivity. Yes, generative AI means you may not have to add engineers as quickly, but it also allows them to move upstream. Lower-level engineers can be upskilled with generative AI. The math is also clear. ZipRecruiter estimates software engineer average salaries are about $140,000. Indeed puts a Bay Area software engineer working at Meta at about $167,000 on average. Salaries can also go way higher based on skills.
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Speaking at CCE 2023, Aaratee Rao (pictured right below), Managing Director at JP Morgan Chase, noted that cost efficiency always plays well. "How do we automate, automate, automate and use AI using machine learning, and to really make sure we save money," said Rao, who noted that cost optimization and quality improvements all boost customer experience.
Pauline Yang (pictured left below), a Partner at Altimeter Capital speaking on the same CCE panel, laid out the software development economics. Yang said:
"One of the big use cases that we've seen really take off is developer productivity. If you talk to CTOs, they have all these different metrics--how happy their developers are, how much more pull requests are they getting, or how more productive their senior engineers are. We believe that a lot of companies are becoming software companies, even if you're not selling software, and the costs of engineers right now are so high that 40% productivity gains with your engineers is massive and so is happiness of paid developers. All of those gains are economic value."
Nadella said 40% productivity gains could be conservative. "With GitHub Copilot, we are increasing developer productivity by up to 55%, while helping them stay in the flow and bringing the joy back to coding," said Nadella on Microsoft's earnings call. He cited Shopify, Maersk and PwC as customers using GitHub Copilot to boost software developer productivity.
Amazon CEO Andy Jassy, speaking on the company's third quarter earnings call, said that AWS' CodeWhisperer AI coding companion is gaining traction with its customization features. "The number one enterprise request for coding companions has been wanting these companions to be familiar with customers' proprietary code bases. It's not just having code companions trained in open-source code, companies want the equivalent of a long-time senior engineer who knows their code base well," said Jassy.
The major cloud players are playing some role in using generative AI to boost software developer productivity. Pichai, outlining Google Cloud's results during Alphabet's earnings, noted PayPal and Deutsche Bank were using Duet AI to boost developer productivity.
And as previously reported, Oracle's move to rewrite Cerner's code base is largely being automated with generative AI and "coming along very nicely."
Rao said copilots for technologists ae critical. "I lead a team of technologists and we're looking at copilots. How do we really do AI to see make sure that developers can be more productive when it comes to code reviews? We can get things done much faster, but you're going to see scrutiny. Is it safe to use?" she said.
Jassy noted that the potential is there for generative AI to know all forms of code well enough to improve quality along with productivity. "It's just a game changer if you can allow your engineers not to have to do the more repetitive work of cutting and pasting and building certain functions that really, if somebody knew your code base better, could do. And so, it's real -- it's a productivity game changer for developers," he said.
Other panelists throughout CCE noted that this generative AI copilot approach to software development can also develop entry level engineers faster because copilots would be a 24/7 code coach. Yang said:
"How do you help the engineers who only have a year of experience with a tool that's encoded with 30 years of experience and help them become better at their jobs much faster?"
