3 ms·
My personal test for this is: what percentage of the company's total value is comprised of the intellectual property their software source code holds. The high
by CSMastermind 3y ago
My personal test for this is: what percentage of the company's total value is comprised of the intellectual property their software source code holds.
The higher the percentage the more of a "tech" company you are - the lower the more "traditional" you are.
No company will ever be 100% - all companies have other assets that are worth money and even a company that sells software as its main product might have lots of value tied up in their brand or their sales book of business.
- mitthrowaway2 3y agoIsn't that a test for a software company? Texas Instruments' value is mostly in their integrated circuits IP (as well as manufacturing prowess, process knowledge, and a little bit of software). They're still solidly a "tech" company in my books.
- Terr_ 3y agoYeah, and what about the value of production hardware and infrastructure? (Stuff not being sold/transferred to customers.) For example, imagine a company with very little proprietary code because they focus entirely on renting out their CPU/GPU/disk capacity, for supercomputing, databases, render-farms, cloud backup, etc. I'd still call that a "tech company." It's also not clear how this "intellectual property of the source code" angle would accommodate the network-effects or value of a subscriber-base... Well, I suppose you could argue that such an asset doesn't require high-tech means, it could all be snail-mail.
- cratermoon 3y agoYou may find that Amazon would fall into the "traditional" on this scale.