But the software is stored on physical drives as ones and zeroes? What's the difference compared to printing it on paper? It's a different representation of it, on a different physical medium. But physical all the same.
What are the rules, here? What's your personal definition of physical that I don't know about?
The difference is that they are stored magneticly/electronicly on a drive, that means that it is just a change of property of a physical material that change, not any addition of material as ink or toner