No One in Tech is Free from Accounting & Capital Markets

1.Laws of nature cannot be broken

Just as physics has laws (e.g., gravity, thermodynamics, motion) that cannot be broken, the financial world has economic laws that every company must follow. Accounting and capital markets function like gravity in economics and business—they are fundamental forces that no company, engineer, or scientist can escape. Just as gravity governs the movement of objects in space, financial principles dictate the movement of capital, investment, and even designers, R&D or engineering day-to-day action. Even artists, musicians, and athletes cannot escape this gravity either.

2.Counting, accounting and computing

Counting is a basic numerical operation that predates civilization. Accounting evolved from counting but includes financial recording, classification, and analysis, making it more sophisticated. Accounting enables economic transactions, business management, and financial planning—beyond just keeping track of numbers.

2.1. How Accounting Evolved from Counting

1. Ancient Counting Systems (~8000 BCE)
   • Early humans used tally marks on bones and clay tokens to keep track of quantities of goods.
   • Example: Ishango Bone (Africa, ~20,000 BCE) – One of the earliest tools for counting.
2. Emergence of Record Keeping (Mesopotamia, ~3000 BCE)
   • Sumerians used cuneiform writing on clay tablets to track economic transactions.
   • The concept of double-entry bookkeeping was not yet developed.
3. Formalized Accounting (Middle Ages, ~13th-15th Century)
   • Luca Pacioli (1494) published Summa de Arithmetica, describing double-entry bookkeeping.
   • Led to modern accounting systems used by merchants and businesses.
4. Modern Accounting (19th-20th Century)
   • Accounting became a structured profession with GAAP (Generally Accepted Accounting Principles). Used in businesses, taxation, auditing, and financial reporting.

3.Counting, accounting and computing

The origins of computing languages are deeply tied to counting, record keeping, accounting, and financial value calculations, they evolved beyond that to serve broader purposes.

3.1. Early Computational Tools for Counting & Accounting

Before digital computers, humans developed various tools for arithmetic and financial tracking:

• Abacus (~3000 BCE, Mesopotamia, China, Egypt) – Used for calculations in trade and accounting.
• Tally Sticks (Medieval Europe) – Used for recording debts and transactions.
• Napier’s Bones (1617) – A manual tool for multiplication, often used in commerce.
• Leibniz’s Stepped Reckoner (1673) – A mechanical calculator for arithmetic operations.

These devices laid the foundation for computational thinking, particularly for business and financial purposes.

3.2. Early Programmable Machines & Accounting

• Jacquard Loom (1804) – Used punch cards to automate weaving patterns, influencing later computing.
• Charles Babbage’s Analytical Engine (1837) – Designed to perform complex mathematical calculations, including financial and actuarial computations.
• Herman Hollerith’s Tabulating Machine (1890) – Used punch cards for census data processing, later influencing IBM’s computing advancements.

These machines were often applied in government and financial record-keeping, marking the link between computing and accounting.

3.3. First Computing Languages & Business Applications

COBOL, in particular, was created specifically for business and financial applications, making it one of the earliest direct links between programming languages and accounting.

3.4. Evolution: Beyond Accounting to Value Generation

• While early computing languages focused on accounting, finance, and transaction processing, modern computing evolved to generate value in broader ways:
  • Automation & Efficiency – AI, ERP systems, fintech solutions.
  • Digital Transactions – E-commerce, cryptocurrencies, real-time trading.
  • Data-Driven Decision Making – Predictive analytics, business intelligence.
  • Artificial Intelligence & SaaS Models – New revenue models driven by AI and cloud computing.

4.Computing cannot be divided by accounting

Computing languages originally emerged for mathematical, accounting, and financial calculations. COBOL and SQL were specifically designed for business and financial data processing. Over time, computing expanded beyond counting/accounting into value generation through automation, AI, and digital business models but still investors always require earning per share growth and dividend per share growth. Therefore, I can say computing is always with accounting.

4.1.Open Source as a Business Model (Freemium & Commercialization)

While open source is often perceived as “free,” many companies and organizations monetize it through business models that require financial oversight:

• Freemium Model: Free core product, but paid premium features (e.g., MySQL, MongoDB, Red Hat).
• Support & Services: Companies charge for enterprise support (e.g., Red Hat, Canonical, Cloudera).
• Cloud & SaaS Models: Open-source software offered as a managed service (e.g., AWS with Linux, PostgreSQL, Kubernetes).
• Licensing & Hybrid Approaches: Some companies mix open-source and proprietary licenses for revenue control (e.g., MongoDB’s SSPL license).

These models require revenue recognition, cost accounting, and financial reporting, meaning open-source software is still under financial scrutiny, just like proprietary software.

4,2. The Role of Large Corporations in Open Source

While open-source software started as a community-driven effort, corporate players like Microsoft, Google, and Amazon now dominate the ecosystem:

• Microsoft: Owns GitHub, a key hub for open-source development.
• Google: Supports Kubernetes, TensorFlow, but also monetizes them via cloud services.
• Amazon: Uses open-source databases like PostgreSQL, MySQL, but offers paid cloud versions.
• IBM (Red Hat): Offers enterprise Linux with paid support.

These corporations invest in open-source but also track revenue, expenses, and profit margins—again, making accounting principles essential in decision-making.

4.3. Regulatory & Financial Oversight in Open Source

• Corporate Accounting Practices: Open-source contributions are often tracked as R&D expenses or costs of revenue.
• SEC & Investor Reporting: Public companies investing in open source (e.g., Red Hat, MongoDB) report financial impact in earnings.
• Tax Considerations: Open-source foundations like Apache, Linux Foundation operate as nonprofits, but still require financial audits and IRS compliance.

4.4.Open Source is Not Free from Accounting

• While open-source software is free to use, it is still tied to business models, revenue tracking, and corporate oversight.
• Large corporations dominate open source, ensuring financial accountability.
• Even nonprofit open-source organizations require accounting for donations, expenses, and compliance.

5.No One in Tech is Free from Accounting & Capital Markets

Open-source computing languages and ecosystems operate under the surveillance of accounting, especially in the modern era where companies like Microsoft, Google, and Amazon monetize and control key projects. Therefore, engineers or every aspect of tech services cannot be free from accounting. It is the ground rule in computing like there is gravity in the physics world. Similarly, R&D scientists rely on computing power, infrastructure, and funding, which are all tied to accounting, cost management, and financial oversight. They cannot be free from the capital market request of earnings growth and operating leverage. Modern corporations and R&D-driven industries, as well as engineers and scientists, cannot escape the demands of the capital markets—specifically, the expectations for earnings growth, operating leverage, and financial efficiency. Even artists, musicians, and athletes cannot escape this gravity either. This fundamental rule is easy to understand, has the strongest power, but is often too underestimated in everyday life.