What exactly is Swiss software?

Tegonal recently decided to join the “swiss made software” label. This decision process, however, has also raised questions and led to discussions. We would like to explain these here.

What does “Swiss made” actually mean for software? According to the requirements of “swiss made software”, the proportion of production costs incurred in Switzerland must make up at least 60% of total production costs and the most significant part of the manufacturing process must have taken place in Switzerland. For cheese or watches, this is still reasonably comprehensible. But what about software? Modern software is often based on numerous software libraries, interacts with services or other software components via interfaces and runs on distributed platforms. The boundaries between software packages, modules and platforms are quite fluid and it becomes difficult to define a “product” that was produced in Switzerland.

At Tegonal, we rely heavily on open source software, which is often developed and maintained by a global community. We contribute to this community and use components for our own projects and services. Does a label which refers to a national territory make sense at all in this context?

Further, various tools and services from automation platforms are often used in the software development process, including code generation with AI tools. Are these not part of the manufacturing process, and does it matter whether these tools are run on infrastructure in Switzerland or whether someone on a Swiss payroll initiates these processes?

Tegonal is strongly rooted in the Bern region for over 20 years now. Seven of the eight employees live in Switzerland, one moved to the EU a few years ago. We do not engage in offshoring or nearshoring. We therefore easily meet the 60% requirement for labor costs in Switzerland. However, a company that invests 40% of its labor costs in low-cost offshore development, while the 60% goes to the better-paid employees in Switzerland, meets the requirements as well. Does this make sense?

Despite these questions, we decided to apply for the label. Yet, this is not because we are convinced that such a label really makes sense, but for marketing reasons. Many software companies have this label now, which creates a certain amount of pressure. In addition, label holders are listed in the “swiss made software” directory, which increases visibility and the likelihood of being found via search engines. This also shows the crux of such labels: whether a label represents real, meaningful values or not, they generate some market pressure. And we, as a local software company, are not immune to this.