In The Software Foundry, I argued that the price of creating software is collapsing — that AI has changed the production function of the industry, and that a third affordability revolution is coming, after China’s in products and India’s in services. That was the supply-side argument: how software gets made, and why it is about to get made differently.
This essay begins from the other side of the transaction. What exactly has become unaffordable for the buyer? The answer is not the price of any individual application. It is the cost of assembling a business from applications that repeatedly rebuild the same foundations — and then ask the customer to operate the connections between them. The bill that follows is a composite, but every growing business will recognise it. The tax has been hiding in plain sight, one reasonable subscription at a time.
The claim of this essay: businesses are not overpaying because individual applications are expensive. They are overpaying because every application rebuilds, reconnects and resells the same foundations. The unit of software has been defined incorrectly — the buyer does not experience isolated applications; the buyer experiences one business. The coming revolution will not merely cut the price of apps. It will end the tax of the stack.
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The Merchant’s Software Invoice
At 9:12 on the first Monday of the month, a merchant opens the business bank statement. She could sell skincare, or spice blends, or handmade furniture; it does not matter, because she is every merchant. The store had a good month — orders up, repeat purchases improving, the small team pleased. Then the software charges begin to scroll past.
She remembers buying every one of them. Customers needed to hear from her, so she added an engagement and email application. Shoppers wanted proof: reviews. Repeat buyers deserved recognition: loyalty. Visitors were leaving without a trace: pop-ups and signup forms. Questions were piling up: a helpdesk. Her best product is bought monthly: a subscriptions manager. The store should suggest the right next item: recommendations. And she needed to know what any of it was achieving: analytics. Eight decisions, spread over three years, each made on the day a real problem appeared. Every single one of them was rational. No merchant wakes up one morning and decides to assemble eight applications. The stack is built one sensible purchase at a time — and becomes unreasonable only when seen as a whole.
Every line is defensible. The total is not.
Six hundred and ninety-eight dollars a month. For many growing stores it is the second-largest fixed cost after rent — and unlike rent, it rises on its own, because most of these applications price by contacts or orders. Every new subscriber she wins makes the engagement app more expensive; every new order makes three other apps more expensive. There is a quiet perversity here that deserves its own sentence: the stack charges her for succeeding. The pricing is not connected to the utility she receives; it is connected to the growth she creates. And the monthly format disguises the scale — software arrives in small recurring amounts, so the stack never triggers the scrutiny of a new hire or a large campaign, even as a dozen modest subscriptions become a substantial annual commitment.
But the subscriptions are only the visible tax. Look behind the invoice and four more taxes appear.
The subscription tax is the one she can see: another bill for every job, accumulating faster than revenue. The data tax is quieter: eight applications means eight partial models of her business — one knows what the customer bought, another what she clicked, a third the points she earned, a fourth the support conversation. Each product calls its fragment a customer profile; together they are pieces of one relationship, and the merchant pays each vendor to store, interpret and act on information she already owns — then pays again when the copies drift apart. A customer unsubscribes in one system and stays active in another. A product is out of stock in the storefront and still recommended in a campaign. A refund lands in the order system but never reaches the loyalty balance. The stack does not merely hold data; it manufactures disagreement.
The connector tax is the glue. APIs promised modularity, and delivered it — while quietly shifting the responsibility. A connector is not a pipe installed once; it is a small living product that must survive change at both ends — authentication, schemas, field mappings, limits, retries, error states — and when either end updates, a workflow fails silently, discovered only after a customer has received the wrong message. The operator tax is her own attention: eight dashboards, eight vocabularies — one system’s *segment* is another’s *audience* is another’s *list*; one reports attributed revenue, another assisted, another last-click — and someone must learn which number to trust. That someone is her. Large companies hire teams to operate software; the small business turns the founder into the integration department. And the switching tax is the trap at the end: the more connected the stack becomes, the harder any piece is to remove — the fear of losing history, templates, workflows and integrations exceeds the resentment of the bill. The stack turns inconvenience into captivity.
The subscription is the visible tax. The other four compound quietly beneath it.
Here is the paradox in one sentence: software was supposed to simplify the business, and the software stack became another business the merchant must operate. No single line on her invoice is outrageous. The stack is. And the stack — not any application on it — is the true subject of the affordability revolution.
