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Why software factories are back - and how they work in the age of AI
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Tune into the TV show Shark Tank, and the most recurring question you hear voiced by the venture capitalists to budding entrepreneurs is whether they have arrangements with a factory to cost-effectively mass-produce their pooper-scoopers, comfort socks, or scrub pads. The idea of a mass-production facility may make sense for software delivery as well.
Imagine submitting your prototype -- such as a vibe-coded initial version of an app -- to a service that will mass-produce your solution in a repeatable, automated fashion for delivery to a wide audience. Such is the promise of the "software factory."
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There's nothing new about the concept -- it was all the buzz about two decades back as more software development became componentized and repeatable. Microsoft was talking about software factories back in 2008. The idea faded for a while, but now it's back, fueled by the rapid production of software code generated and managed by artificial intelligence.
Until recently, even with automation and DevOps practices, "coding created the bottlenecks for a lot of organizations," Moritz Plassnig, CEO of CloudBees, told ZDNET. "You had to hire more engineers, but it was very hard and costly to hire them."
Thanks to the coding capabilities of foundation AI models and associated agents, the concept of the software factory has been revived -- with the automation of the software development lifecycle into repeatable chunks receiving serious consideration. With agentic coding, "we're less constrained on the coding side," Plassnig said. It can also elevate the roles of IT professionals. "Developer craftsmanship is not going away, as devs and engineers shift from writing code to exercising judgment around what gets built and shipped."
Today's software factory concept is built around the AI models now on the market -- and the concept is almost the same across all the models. "Over the past 18 months or so, many of the companies that are on the cutting edge of using agents to automate their software development life cycle have been building the same machine, and independently coming to the same conclusion on what this machine looks like," according to Jaymin West, a forward-deployed engineer and technology evangelist, in a recent YouTube video.
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The companies building out software factories include the luminaries of today's agentic economy: Anthropic, Cognition, Cursor, Factory, Google, Github, OpenAI, and Ramp. "Every single one of these companies has converged on the same shape," West pointed out. "It's really important at this point to realize that these are the companies on the cutting edge and there is a clear pattern forming on how they are structuring their entire engineering framework."