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Original Document in Korean

What Is a Technical Asset in the IT Field?¶

HJ, Ph.D. / Software Architect
(js.seth.h@gmail.com)
Draft: September 2022 / Revision: January 2026

[Reading Intent] This article critically explores the definition and essence of technical assets in the IT field by comparing them to traditional industries, examining the differences in the roles of source code, facilities, and people, and analyzing the structure and limitations of IT industry assets.

Executive Summary¶

Definition of technical asset: An intangible asset that contributes to production, service delivery, and securing competitiveness, can be repeatedly utilized, and is subject to management.
In traditional industries (electric, chemical, mechanical, etc.), the 'essence' of technical assets is fixed in facilities and processes, enabling the repeated reproduction of identical results.
In other words, in traditional industries, technology is materialized as facilities and processes and is repeatedly reflected in product manufacturing.
On the other hand, in IT, when people change, even if the source code remains, the continuity of the project disappears.
That is, in IT, the source code itself cannot become a 'technical asset.'
The role of facilities in traditional industries is played by people in IT.
Just as technology is dependent on facilities, in IT, technology is dependent on people.
As long as there is constitutional freedom of occupation, a company cannot fully own IT technical assets.
Strictly speaking, IT companies possess service assets, while developers embody technical assets.
Produced source code, running programs, and business funnels are just different perspectives on the same entity.
Similar to observing a hypercube (4D cube).
The company clearly owns the business funnel, which is protected institutionally and practically.
In contrast, source code has a lifespan of about 5–10 years due to environmental and requirement changes, and depreciation begins from the moment it is created.
Meanwhile, developers retain the essence of realizing the service funnel and can not only reproduce but also improve it.
Therefore, the recent idea of traditional industries internalizing IT capabilities is fundamentally inappropriate.
It is a more desirable goal to digitize and own the business funnel using IT.
Conversely, developers should internalize a computational approach to realizing the business funnel, rather than focusing solely on framework usage and feature implementation.
As far as I know, the division of roles between developers and companies stabilizes as described above.

Traditional Definition of Technical Asset¶

In traditional industries, such as electric, chemical, and mechanical, the concept of technical asset is very clearly defined. Here, technical assets are mainly fixed in physical entities called facilities and processes. For example, assembly robots in car factories, clean rooms in semiconductor production lines, and reactors in chemical plants are all representative examples of technical assets. Once these facilities are built, they are designed to repeatedly produce the same products thousands or tens of thousands of times. That is, because technology is embedded in facilities, even if skilled workers are replaced, as long as the facilities and processes are maintained, products of the same quality can be continuously produced.

In this context, technical assets are the core of corporate competitiveness. Upgrading facilities, optimizing processes, and improving automation levels are all activities that increase the value of technical assets. Facilities and processes are also protected by patents and trade secrets, playing a crucial role in long-term growth and market dominance. Thus, in traditional industries, technical assets are fixed in tangible entities, enabling repetitive and predictable production.

This structure establishes the following characteristics:

As long as the same facilities and processes are maintained, the outcome does not heavily depend on people.
Even if workers are replaced, production quality and output remain above a certain level.
Technology transfer is possible in the form of facility transfer or process manual transfer.

In other words, in traditional industries, technology is fixed as a reproducible physical structure, making it something the company can practically own and control. This is the key background that allowed the concept of technical asset to be established.

Reality in the IT Field¶

The situation is completely different in IT. In software development projects, when key developers leave or teams disband, even if source code and documentation remain, project continuity is often severely damaged. This reality shows that source code itself does not sufficiently serve as a technical asset.

On the surface, source code remains in repositories, and build systems and deployment pipelines are maintained. However, the following problems arise in practice:

The intent and design context of the source code are not fully documented.
It is difficult to infer why certain implementations were chosen.
The criteria for responding to business requirement changes disappear.
Even if modifications are possible, it is hard to be confident that the results are correct.

As a result, in IT, discontinuity occurs despite the existence of source code. This clearly shows that source code does not serve the role of 'facility' as a technical asset in the traditional sense. Therefore, considering source code itself as a technical asset in IT is a simplistic view that fails to fully understand reality and merely imitates concepts from other fields.

In fact, for complex systems, it is difficult to grasp the overall structure and intent with just source code and documentation. Design philosophy, implicit rules, and unofficial know-how are often internalized by individual developers. For example, large-scale financial systems or game servers consist of hundreds of thousands of lines of code, but the true meaning, usage, and maintenance methods of those instructions are fully understood only by a few developers who have participated in the project for a long time. When they leave, the remaining developers must spend significant time and resources interpreting the source code, and sometimes it is more efficient to discard the existing system and build a new one. Thus, in IT, source code does not function like facilities and processes in traditional industries, making it difficult for source code itself to become a technical asset in the traditional sense.

How Are Products Manufactured in the IT Industry?¶

If facilities are the core of repetitive production in traditional industries, in the IT industry, 'people' play that role. In other words, the means of production in software development are not facilities but the individual capabilities, experience, knowledge, and teamwork of developers. The problem-solving ability, architecture design experience, and domain understanding that developers possess become the actual technical assets.

Because of these characteristics, securing and retaining talent is the key to corporate competitiveness in the IT industry. There is active competition for salaries, welfare systems, and flexible work environments to attract excellent developers. Also, the growth and learning of individual developers are directly linked to the accumulation of technical assets in the organization, making education, mentoring, and knowledge-sharing culture very important. On the other hand, when developers change jobs or leave, the technical assets they have accumulated disappear with them. This is fundamentally different from traditional industries, where facilities remain as fixed assets.

Also, a company's revenue is not realized by selling source code. More precisely, the value is justified by the service delivered to customers over time as the source code is interpreted by the CPU. Well-known IT technology companies do not sell source code. The product of an IT company is always a service.

Companies Cannot Own IT Technical Assets¶

Due to constitutional freedom of occupation—meaning developers have the right to leave a company at any time—a company cannot fully own a developer's knowledge, experience, and know-how. In reality, what a company can own is limited to formal outputs such as source code, documentation, patents, and trademarks. However, as mentioned earlier, these outputs alone cannot fully capture the essence of technical assets.

Ultimately, IT companies own service assets (operating services, platforms, user data, brands, etc.), while developers possess the technical assets embodied in their minds (problem-solving ability, system design experience, domain knowledge, etc.). This creates a constant tension between companies and developers. Companies try to prevent the loss of technical assets by offering various incentives, welfare, and growth opportunities, while developers continuously develop their capabilities to increase their value. Thus, in the IT industry, the ownership and transfer of technical assets are highly fluid, which is one of the biggest differences from traditional industries.

What Companies Can and Truly Want to Own¶

What companies truly want to own is not the source code itself, but the 'business funnel' implemented by the source code. The business funnel refers to the series of paths and structures through which users enter a service and ultimately achieve the company's goals (purchase, sign-up, usage, etc.). This funnel is the result of combining various elements such as the company's business model, operational strategy, customer experience, and data flow.

Produced source code, running programs, and the business funnel are all just different perspectives on the same entity. This is similar to projecting a four-dimensional hypercube into three, two, or one dimension. Each perspective looks different, but the essence is one. Companies are institutionally (patents, trade secrets, copyrights, etc.) and practically (market share, user base, etc.) protected in owning this business funnel, securing competitive advantage through it.

Ultimately, the most powerful asset an IT company can own is a well-designed business funnel, the operational know-how that supports it, and user data. Source code may be replaced or improved over time, but the structure of the business funnel and operational experience remain as the company's core assets.

Source Code Is Not Reproduced¶

In the IT industry, source code is not a permanent asset. Due to changes in technology trends, evolution of operating environments, and changes in business requirements, source code often has a lifespan of about 5–10 years. For example, programming languages or frameworks that were mainstream can become outdated in just a few years, or security vulnerabilities and performance issues may require a complete system overhaul. Thus, source code begins to depreciate from the moment it is created, maintenance costs increase over time, and eventually it is destined to be discarded.

Specifically, software typically faces End of Service (EoS) for its runtime environment after about five years. CPU performance grows by about 20–30% annually. In three years, that's about double, and in six years, about four times the performance difference. Therefore, the lifecycle of software is often as short as five years, and even with major life extension projects, it must be replaced or discarded after about ten years due to technical and environmental changes. In contrast, traditional industry assets like real estate last over 40 years, oil refining facilities, power plants, and large factory equipment usually last 20–30 years, and some key facilities are used for over 40 years. In other words, IT assets lose value in a very short time, while traditional industry assets decrease in value gradually over decades. The only known asset with a depreciation rate similar to source code is the automobile.

The difference in depreciation periods is more than just a numerical difference—it fundamentally affects asset management, investment strategies, and corporate growth models. In IT, rapid innovation and continuous reinvestment are essential, while in traditional industries, long-term asset management and stable production bases are more important.

In the IT industry, the true essence of value reproduction is embodied by developers. The experience, know-how, and problem-solving ability accumulated by developers actually increase in value over time. Developers who have successfully implemented a business funnel can not only repeatedly solve similar problems but also improve them in better ways. In other words, the intangible assets of individual developers grow over time and acquire the flexibility to adapt to various environments, unlike source code. This is why the perception that talent is the true asset is so strong in the IT industry.

Thus, code is nothing more than the growth rings of a tree, cut at a particular moment from a growing talent.

The Illusion of Internalizing IT Capabilities¶

Recently, traditional industry companies often set goals to internalize IT capabilities. However, as discussed above, IT technical assets cannot be owned in a fixed form like facilities or processes, so such attempts are fundamentally limited. Rather, it is more realistic and desirable to use IT to digitize existing business funnels, own services, and enhance competitiveness through data-driven decision-making, automation, and improved customer experience.

For example, when a manufacturer tries to build its own software development team to directly develop ERP, MES, CRM, and other systems, inefficiency often increases due to lack of internal capability, frequent personnel changes, maintenance difficulties, and limits in responding to rapid technological changes. Instead, collaborating with external specialists or adopting cloud-based SaaS solutions to effectively digitize the business funnel may be a better choice. In other words, focusing on innovation and ownership of the business funnel through IT, rather than internalizing IT capabilities, is more suitable for the sustainable growth of traditional industry companies.

Concerns of Developers as Individuals¶

From the perspective of individual developers, it is important not to remain at the level of simply learning frameworks and implementing features, but to internalize computational thinking and problem-solving abilities that realize the business funnel. That is, beyond coding skills for specific frameworks, it is necessary to internalize the following fundamental capabilities:

The ability to transform business requirements into structure
The perspective to understand the entire system as a single funnel
The thinking to explain the trade-offs of technology choices
The ability to abstract solutions that can be applied to changing environments

These capabilities cannot be accumulated in a short period; they are built through diverse project experiences, repeated failures and successes, collaboration with colleagues, and continuous learning.

Moreover, the technical assets internalized by individuals cannot be taken away by anyone. Even if an individual wants to transfer them, there is no effective way to do so. Therefore, developers do not need to worry about protecting their own skills. The fact that the concept of open source has been established and maintained for over half a century in the knowledge- and technology-based industries of humanity is probably due to these characteristics.

Conclusion: Let's Go Together¶

Ultimately, in the IT industry, developers and companies possess different forms of assets and form complementary relationships. Companies own business funnels and service assets, while developers embody intangible technical assets in their experience and capabilities. When these two entities harmonize, innovative and sustainable growth becomes possible.

A virtuous cycle in which companies support the growth of developers and developers contribute to achieving the company's business goals is desirable. For this, transparent communication, fair compensation, growth opportunities, and a culture of knowledge sharing are essential. When such an environment is created, both developers and companies grow together, and a healthy ecosystem in the IT industry can be maintained.

Author¶

HJ, Ph.D. / Software Architect
(js.seth.h@gmail.com)
https://js-seth-h.github.io/website/Biography/

Over 20 years in software development, focusing on design reasoning and system structure - as foundations for long-term productivity and structural clarity.

Researched semantic web and meta-browser architecture in graduate studies,
with an emphasis on structural separation between data and presentation.

Ph.D. in Software, Korea University
M.S. in Computer Science Education, Korea University
B.S. in Computer Science Education, Korea University