What's funny is that while I do not think of most stocks in my portfolio as software names (with the exception of $cmg.to), upon closer inspection, nearly all of them rely heavily on software in one form or another. But they're really not software companies.

Let’s break down a few examples, highlighting how the lines between software and traditional business models often blur.

1) Grab Holdings $GRAB: At first glance, you might think of Grab Holdings as a software company, especially given its heavy reliance on mobile applications, online services, and technology to power its fintech, ride-hailing, and food delivery operations. And while it does have significant software components, calling Grab just a software company would be missing the bigger picture. Grab is actually a massive, network-based business that functions as an everyday utility for millions of people across Southeast Asia. It’s not just a digital UI – it’s a company with a substantial physical presence to. Grab’s fleet of cars, motorcycles, delivery vehicles, and its driver and merchant network all contribute to its value proposition. So, while the tech layer is undeniably important, Grab's success stems from its ability to connect physical infrastructure with a powerful software backbone that enables it to scale and function effectively in a highly competitive space.

2) Interactive Brokers $IBKR is another company in my portfolio that blends the lines between finance and technology. At first glance, it's a brokerage firm, but if you take a deeper dive, you realize that it operates more as a tech company than a traditional broker. IBKR offers cutting-edge trading infrastructure and services to both retail and institutional investors, but it does so with a tech-driven approach that makes it stand out from other brokerages. IBKR is more of a brokerage infrastructure and technology company than a traditional stock trading platform.

3) At first glance, Edenred $eden.pa might seem like a software company too, particularly with its digital voucher and payments solutions that are powered by an app-based system. But in reality, it’s much more than that. While Edenred’s technology makes it easier for companies to manage benefits for their employees – like meal vouchers, gift cards, and transport subsidies – the company's true strength lies in its network. Edenred is a leader in providing employee benefits, and its success hinges on its vast network of corporate clients (1M), merchants (2M), and users (60M). The software component facilitates this, but it’s the network and utility that drive its value. The tech is just the enabler, not the core of the business.

4) You’ve probably never heard of Timee, and if you haven’t, that’s understandable. It’s not a household name in the West. However, Timee is another prime example of a business where the software is central but only part of the equation. At first glance, Timee might seem like a software platform. But what sets it apart is its focus on building a robust network that enables businesses and spot-workers to connect in a seamless way. Similar to Edenred and Grab, Timee’s real strength lies in the network it has created and the value it delivers by facilitating real-world interactions. It’s this network effect, rather than the software itself, that forms the backbone of its business model. So, while Timee is highly digital, the true value comes from the connections that the software enables.