The headline is actually a partial quote, here’s the full quote:

Duplicating software is about as close to legally printing money as a company can get; profit margins regularly exceed 80 percent.

It comes from Jeff Atwood and is (in Internet years) quite old, from April 2007.

The blog post this appears in unfortunately talks about a different topic than I want to touch here, but here’s link for completeness.

This quote demonstrates a common misconception about software development that I will demonstrate using a well-known* Slashdot presentation style:

1. Build the application
2. Duplicate it (no cost to do so)
3. Sell it
4. Distribute it (very low cost if done over Internet)
5. ?
6. Profit!

The problem with this reasoning is that software is not a vacuum cleaner – it is never “done” and off to the duplication facility we go. There are bugs to fix, weird UI interactions to solve, new functionality to add (that seems obvious once a customer points to it), new marketing venues to try, new markets to win (often by adding features, if nothing else than language support) etc.

Therefore, the investment (in money and time) never ends, especially if you are a µISV or a small company. Yes, unlike traditional manufacturing, you don’t have to incur the costs of raw materials, warehouses and traditional transport (by truck or a train). But you still have to pay for computers (hosting), bandwidth, support… We just replaced one set of problems with another.

This does not mean that building software is harder than growing tomato. At least we don’t have to look into the sky and pray that there is (or there isn’t) rain. But unlike tomato production where clearly there is a cycle of seasons, our job never stops.

*That is, well-known if you’re a geek and read Slashdot. Despite all the mindless Microsoft bashing, I find Slashdot amusing and occasionally (quite rare these days) thought provoking.