The Great Software Rebuild
Jeff Hodsdon@jhodsdon
+11.0%
since Sep 29
The idea
I think AI-generated code is piling up faster than anyone can maintain it, and within the next year or two that mess forces a wave of expensive rebuilds. The market treats IT services firms as AI's casualties, but I think cleanup demand swamps whatever billable hours AI replaces, so this basket owns the consultants who collect on that wave. It leans hardest into specialist modernizers who win rebuild contracts fastest, backed by global integration giants, offshore delivery firms for volume work, and government systems rebuilders with sticky contracts, plus cash held in reserve to add if the…
What it owns
- The large integrators that companies call first when a core system has to be torn out and rebuilt from the ground up. · AccentureIt serves as the default call for large companies that panic about unmaintainable code and need systematic cleanup work., IBMIts consulting arm has cleaned up enterprise software messes for decades and collects when systems must be rebuilt rather than patched., CognizantIt supplies the large engineering bench required when rebuild projects exceed the capacity of specialist firms., KyndrylIt gets paid to keep broken systems running while rebuilds happen, collecting on the growing volume of unmaintainable code., CGI Inc.It signs long contracts to run and rebuild systems, collecting on the rebuild wave without depending on any single quarter., DXC TechnologyIt is priced as if legacy IT work will decline, creating value if forced rebuilds reverse that trajectory.30%
- Mid-size engineering firms win rebuild and modernization contracts fastest when systems break and can no longer be patched. · EPAM SystemsIt wins high-end engineering work when companies must rebuild systems from the ground up rather than patch them., GlobantIt captures digital rebuild projects where companies scrap broken systems and start over, growing its new-client base., Grid DynamicsIt specializes in replatforming work, moving companies off systems they cannot fix onto ones they can maintain., EndavaIts entire business centers on modernizing software that companies can no longer maintain or support., UnisysIt specializes in untangling legacy systems that nobody fully understands, a skill that commands premium pricing as rebuilds accelerate.30%
- Agencies cannot let broken systems sit idle, and their rebuild contracts run for years once signed, creating sticky revenue. · Booz Allen HamiltonIt fixes federal technology on multi-year contracts, and government systems will require expensive rebuilds., CACI InternationalIt rebuilds defense systems on sticky multi-year contracts, the most durable form of rebuild revenue., Science Applications InternationalIt lives on agency modernization contracts, the government version of forced rebuilds of systems too old to maintain., LeidosIt holds sticky government IT contracts that pay through rebuild cycles, creating steadily growing backlog.14%
- Indian delivery firms that supply the engineering headcount every large rebuild needs for the thousands of hours of rewriting that follow diagnosis. · InfosysIt brings offshore scale to the volume portion of rebuilds, the thousands of hours of rewriting that follow system diagnosis., WiproIt delivers rebuild work at scale and low cost, capturing demand from companies that need engineering volume on budget.8%
- Before any rebuild gets funded, companies pay for research and advisory services to understand how broken their systems are. · GartnerIt gets paid first in rebuild cycles, selling research and advisory services before companies hire rebuilders.5%
- Cash13%