SOFTWARE HAS NEVER BEEN CAPITAL LIGHT

Summary from the TLDR IT newsletter

Enterprise software's "capital lightness" is an accounting illusion, because $50M spent on engineers is expensed as R&D while an equivalent factory machine is capitalized. Software requires constant maintenance labor to fight decay and outsources physical infrastructure to cloud hyperscalers spending ~$700B. High gross margins therefore reflect upfront sunk costs, not freedom from capital.