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The term software was first used in the late 1960s to show the difference from computer hardware, which are the fixed parts of a machine. Before compact discs (CDs) or Internet downloads, software came on "soft media" like magnetic floppy disks and magnetic tape.
Firmware refers to programs (such as embedded drivers) or settings (like BIOS) that are stored in the hardware of the computer, but can be changed without having to physically change out the hardware.