Comment by chermi

Comment by chermi 8 days ago

6 replies

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Thanks, this is the closest thing to making sense. But it still doesn't make sense.

Like you said, this is a pretty weird characterization of software. I guess it would make sense to lawmakers who have no idea how it works. Combine that with the fact the lobbyists pushing this are 99% representing big tech and you start to get a picture of how this happens.

Warning- brain dump not directly related to topic, read at your own risk. Lol @ software never wearing out. I wonder how that works with something like Microsoft windows licenses(as opposed to something like 365 which has new "features" every year)? I'm actually asking, how do you amortize an "asset" that you are admitting only lasts a year? I know SaaS on consumer side is categorized as opex.

Does this capital-asset view of software have any effect on the attractiveness of SaaS going forward? I know we were talking about the development side of things not the consumption side, but it seems like this capital/asset perspective conflicts with the reality of how software is often sold. SaaS is partially justified as the cost of 'maintaining' the software (in addition to support and new features). The fact that maintenance is required belies the perspective that it's a capital asset. Coming full circle, this must require the vendor/developer demarcate programmer effort between feature vs. maintenance & support. If anyone has a sythensis of all of this or reference it would be appreciated

floxy 8 days ago

>The fact that maintenance is required belies the perspective that it's a capital asset.

I'm not following this. Factories, ships, stamping presses all require lots of maintenance and up keep.

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  • chermi 8 days ago

    You're right. I was focused on the idea that for software to be taxed as a capital investment there had to be a time when it was considered a finished product. Like building a tractor. I guess the analogy then is how the tractor builder is taxed when fulfilling warranties. I suppose tractor business can expense as R&D work that goes into processes that make it easier to fulfill warranties.

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    • _aavaa_ 8 days ago

      Each version of the software is a finished product just as any particular tractor is a finished product. The difference is that I know plenty of physical assets that companies buy which see no changes other than maintenance over their entire lifetime. I don't know of a single piece of software produced which receives only bug fixes.

      Yeah devs spend their time fixing bugs, but a large percentage of those bugs are the result of the software needing to work under new conditions or with new version of dependencies.

      That fundamentally different than a tractor breaking down from wear and tear while doing the exact same thing it's always done.

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