I take this to mean "Are software companies overvalued relative to the rest of the economy?" No. I can't prove my side -- like in the stock market, no one can -- but it's hard to put a cap on how well the software sector will do.
Every activity in the world is involving more and more software. Code builds on itself, and technology has only very recently crossed some fundamental thresholds, like ubiquitous powerful arbitrary computation and global communication at close to c. Together, these imply that the opportunities for value creation will continue to be enormous, and in the big economic picture money will redistribute from other industries to software.
That was true in 1999, but people had a lot less information with which to estimate the size of these kinds of opportunities. Given this uncertainty, the amount of money invested may have been rational, at least at first, even though the bet turned out to be wrong. Now people have enough information to estimate well.
Every activity in the world is involving more and more software. Code builds on itself, and technology has only very recently crossed some fundamental thresholds, like ubiquitous powerful arbitrary computation and global communication at close to c. Together, these imply that the opportunities for value creation will continue to be enormous, and in the big economic picture money will redistribute from other industries to software.
That was true in 1999, but people had a lot less information with which to estimate the size of these kinds of opportunities. Given this uncertainty, the amount of money invested may have been rational, at least at first, even though the bet turned out to be wrong. Now people have enough information to estimate well.