Actually, software was free at one point. Given without extra cost with the hardware. The concept of piracy wasn't an issue when the number of computers that could run the software ran in the two or three digits (maybe even four digits worth of computers). Also, without software already existing, those multi-million dollar computers wouldn't be worth the price.

This started changing when computers became plentiful enough to sell to a mass market. Bill Gates certainly saw the profit in selling only software (I'm not saying he was the first to do so, but I do suspect he was among the first to do so).