I’m going to tell you a story of technology that no one wants to tell you. It’s the story of software as an asset.
You see, somewhere along the way—while we were all gawking at shiny apps and clicking “I agree” faster than we read cereal boxes—we forgot something important: software isn’t just a tool. It’s not just “there” like air or free Wi-Fi. It’s capital. Real capital.
Once upon a time, assets meant land, gold, or steel. Tangible things. But today, the most powerful companies in the world—Amazon, Google, Microsoft—don’t own oil fields. They own code. Software is the railroad of the 21st century. It gets things where they need to go, faster, smarter, and without asking for a coffee break.
But here’s the twist: you build software. You install it, tweak it, maintain it. And yet, in most businesses, it sits on the balance sheet like a forgotten ghost—an “expense,” not an asset. We depreciate a forklift but pretend that a million-dollar ERP implementation just vanishes after year one. Who decided that?
The accountants? The regulators? Or maybe the software vendors themselves, who’d rather lease you the same tools every year instead of helping you build something you own.
This is the story of hidden value. Of businesses with treasure chests buried in their own server rooms—codebases, automations, workflows—that save them millions but never show up in the investor presentation.
It’s time we reframe the conversation: software is infrastructure. Software is leverage. Software is equity.
The biggest, most dangerous, most ugly thing in business? Software as a service. Hardware as a service. Blah blah blah as a service.
What does it mean?
It’s like leasing a car. Yeah, it’s cheap to get in it. But you’re paying for it for the rest of your life. Not only that, it’s not really yours. You can’t customize it. You can’t maximize it. Can’t depreciate it. And worst of all, it doesn’t give you an advantage over anything else.
Race cars are custom built for an application and meant to go as fast as possible and beat the other guy. That’s what software should be.
I have been building software for over 40 years and getting paid for it.
Software gets old and obsolete, but you can get 20 years out of it. Just ask your local bank or the U.S. government. They’ve been running on COBOL for decades and making money from it.
Not because it’s trendy. But because it works.
And here’s the kicker: they’re not paying $19.99 a month for it. They built it. They own it. They can tweak it, control it, and—here’s the big one—they’ve wrung every ounce of value out of it over the decades.
Compare that to the endless treadmill of subscriptions, where you’re not just paying for access—you’re paying to stand still.
If you build it right, software pays you. If you lease it forever, you’re just paying someone else.
Now here’s the other thing. It’s also your secret sauce, your competitive advantage.
Indeed, whole industries are based on you owning the software. There’s a little company called Amadeus. Amadeus was a partnership with American Airlines. They owned the reservation systems for all the airlines for years.
Marriott Hotel, what made them great wasn’t their hotels, it was their reservation systems. Software is a competitive advantage. The minute you pay, you have rented that service out—you’re renting out your competitive advantage that anybody can use.
So if you’re in any industry where you need an advantage, you need your own custom software. Yes, it’s going to cost you millions, but that’s your advantage. It’s your secret, your secret sauce.
Now let me tell you another little secret. AI is changing everything.
Now it’s not just about your software, but how you design your workflow, how you design your business, because anybody can replicate it with AI.
So there’s only two ways you can win in AI:
- You spend hundreds of millions of dollars to be in the forefront of the AI battlefield,
or - You’re very, very, very clever. And leverage existing AIs that are out there for almost nothing, and leverage it with the rest of your custom software.
So your custom software is going to leverage the AI that perhaps you’re renting out or not. But realize the minute you’re using somebody else’s AI, you’re losing some of that leverage—but it may not be possible to have your own AI all the time.
Next time we are going to talk about the stack of softwares your business will probably need.
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