In a world where electric coffee grinders exist, and batteries exist, is a battery powered electric coffee grinder a new technology? Or just a new product. I'd say the latter.
There's certainly new software technology being produced every day, but much less than there are new software products being launched every day.
Yes this is true for other forms of technology too, but no, I don't think software alone outbalances technology being developed in all other fields combined, including materials science, semiconductor, medical, photonics, robotics, drones, power electronics, microscopy, machining, metrology, renewable energy, telecommunications, etc... I think it's just an indicator of a bubble perspective from someone who probably mostly interacts with software developers or follows software technology.
Assuming that patents were actually useful as method of sharing useful designs with the world wouldn't you want to know how to overcome the engineering challenges?
On the software side, AFAIK the infamous "One Click" patent was never held up in court, but companies had to spend significant money defending against lawsuits based on it (and therefore the only possible victory was pyrrhic).
> most new technology is just software
1. Microsoft – mostly software
2. Apple – software and hardware
3. Amazon – mostly software
4. Alphabet – mostly software
5. Berkshire Hathaway – not tech
6. Facebook – mostly software
7. Alibaba – mostly software
8. Tencent – mostly software
9. Johnson & Johnson – not tech
10. Visa – not tech, but mostly software
Microsoft produces a lot of value from software, but how much new technology are they producing? Some for sure, but how much?
I don't think your metrics prove the claim...
Facebook has developed a software product, and earned a lot of value from advertising. They've also developed several new technologies along the way, but I'm not sure their advertising revenue or market cap are good trackers of their R&D output.
Software products obviously scale very well, which makes them very valuable. But are you counting new technologies in terms of dollars earned? That's very different than just the number of innovations, because it depends on the size of the market for them, your capacity to exploit it, etc.
Wallmart, Exxon, Amazon retail revenues completely dwarf the 'tech sector' - it's just that their margins are more narrow, in most cases, surpluses to consumers are vast.
Honestly 'profit to investors' should be one of the last metrics most of us care about. Most individuals should be far more concerned about surpluses they receive through lower prices or higher wages, as they'll nary get any real material lift via investment income.
In this way, it's kind of odd how 'market cap' is so widely used and perceived as some kind of great measure. It's good for investors, and unless you're an investor, it's bad for you. Every dollar that goes into the pocket of Amazon's investors should be a dollar in your pocket in the form of lower prices or better products/services.
Have a look at the biggest companies by revenue [1]
The only 'tech' companies on there are Apple and Amazon.
Amazon makes the hardware, and most of Amazon's revenue is retail goods.
There are not mostly software companies on that list.
Actually, a lot of HNer discussions tend to veer into this magical surplus world as well, I'd encourage anyone to have a look at 'big revenue companies' because it gives a much clearer picture of how the world works outside our bubble.
[1] https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
Take two hypothetical companies, say ebay` and amazon`. They both provide a marketplace, but slightly differently. ebay` allows manufacturers to list directly on their market for a fee. Amazon` buys from manufacturers and sells on their market for a markup equivalent to ebay's fee. Are these two companies substantially different? I don't think so but the revenue frame of reference says they are,
From an economic standpoint, what matters more will be revenue, it's a better indication of how meaningful what is done impacts the world.
As for Ebay vs. Amazon - for 3rd party listings, it doesn't matter that much, it's all accounting, but when Amazon actually does buy and sell stuff, it's very material because of a) cash flows: they send off cash (or get huge credit) to buy stuff b) they have inventory, warehouses, workers c) they are the merchant of record and take on chargeback risk, returns etc.. At the scale that is meaningful.
But I don't think that this comparison really highlights the difference between 'high margin' and 'high revenue' so much as for example AirBnB vs. Toyota. Even though Toyota is not worth that much more than AirBnB, it's considerably important to the economy whereas AirBnB is almost irrelevant.
And Samsung, Foxconn, and Alphabet. So 10% of the list.
For starters, Amazon derives most of its profits from AWS.
I mean, this conversation can keep going - I'm not really interested in digging in deeply to find the answer, because I don't think there's anything meaningful to be found. But I do object to scratch-the-surface level analysis like "Amazon is a valuable company these days, I guess the innovation happening in software outpaces all other fields of research combined" or "AWS makes most of Amazon's profit these days, which makes Amazon a software company".
Amazon might be a software company, but it might not be; it might be a logistics company, a consumer electronics company, a retail company, a data analytics company, a media company, a server farm company... it's not enough to say that AWS makes the most money, thus it's a software company.
Amazon has over $200B of revenue from e-commerce, $1 Profits. AWS Generate ~$25B revenue, $1M Profits.
Here is the headline. AWS ( Its Cloud Division ) Generating 1 Million times more profits than Amazon Retail!.
Or AWS Generate more profits than all of other Amazon Department combined!
What this mean is that Amazon is a vertically integrated Retail company ( Where Retail here includes Online ), with logistics, and transportation. Amazon is mostly software / AWS is a Silicon Valley / I.T / Tech view bubble.
Forgot to mention AWS is actually lots of hardware, land cost for DC, etc. i.e Not Software.
Cool, yeah, so you're saying if I go buy a bunch of servers and land I too can compete with AWS? It doesn't matter what software it runs?
The hardware and datacenter stuff is commodity. Table-stakes. Everyone has to have it. That's why they don't even manufacture the servers themselves. Software is where the value add is. This goes for any cloud provider, BTW.
People who use AWS don't care about the metal that it runs on, as long as it does the job.
> Amazon revenue does not derive from Software. And should not be valued as such.
Ok. But it is (I think - I don't know that much about valuations). If you're certain that's wrong, you shouldn't be arguing with strangers over the Internet, you should be off making money from that insight.
Does a company like Facebook really develop new tech, or just apply it? They don't produce that many papers, compared to even a small university department.
How are you even measuring the volume of new tech? What is one new composite material compared to one new JavaScript framework? How do you compare those?
Is a small university department really producing more than a paper per working day?
Is this really true?