One of the things that makes computers so unique is their ability to deal with software. Software is the more esoteric stuff that computers work with. Software is the information and instructions that give computers the 'universal' feel. You have dealt with something like software, even if you have not used a computer very much. Think of this example:
Denise goes shopping for a music CD. She sees a CD she really wants to buy. It costs 4.00. A friend has told her that it only costs a couple of dollars to create a CD. She wonders why some CDs are more expensive than others. All CDs are physically pretty much the same.
Of course, Denise does know why the CD she wants is more expensive. All the disks cost pretty much the same to manufacture, and they are physically very similar. The only relevant difference between the 17.99 one is the CONTENTS of the disk. The music on the disk is not something tangible. She cannot touch it or see it, but she knows that it is there, and she is willing to pay for it. The real value she is searching for is not the mylar and plastic, but the INFORMATION that the physical entity stores. Information and instructions are software. They are what give the computer such power. Hardware is the physical stuff that makes software possible.