Cobb Anderson, like so many of his baby-boom brethren, is retired. The job he's retired from is something most unusual, however. Cobb Anderson is the man who liberated the boppers from their servitude and started them on their evolutionary journy. Software begins in 2020. When he was an engineer, Cobb turned off the asimov circuits on Ralph Numbers, the first bopper. Boppers, free-willed robots, interact, compete, and rebuild themselves on the moon, where they are confined due to the cold temperatures required by their superconducting circuitry. Anderson has programmed in something resembling sexual duplication in them, as well as a mutation function and a relatively short "lifespan"; if they do not assemble the resources to rebuild themselves in a short period of time, their brains "die."
Some boppers think they've found a way out of the evolutionary race. They've become corporate entities--hive minds. By absorbing other boppers (and, through MRIs, brain dissections, and analyses of neurochemistry, humans), one main computer can have dozens of bodies and the skills of hundreds. One of these "Big Boppers" has decided, as an act of altruism, to absorb the identity of the aging Cobb.
Anderson and local ne'er-do-well Stahn Money (who goes by the name Sta-Hi) are taken to the moon to be absorbed; robot duplicates of the two are placed on Earth, run by Mr. Frostee, a Big Bopper living on Earth in an ersatz ice cream truck. Anderson is eventually taken over, but Stahn breaks loose and, with the help of a "Happy Cloak" he finds, goes on to take part in a revolt against the Big Boppers. He returns and disables Mr. Frostee, becoming a very minor hero.
Wetware picks up in 2030. Stahn, having killed his wife in a drugged-out accident, is working as a P.I. on the moon. Cobb Anderson is thoroughly dead. His software, however, is in storage, awaiting the time when he's woken up. The boppers and the humans have achieved an uneasy detente on the moon, but the boppers continue to evolve. Cobb's grandniece, Della Taze, has disappeared, and Stahn is hired to find her.
Della has vanished, all right. Stahn discovers that her boyfriend was murdered while they were taking "merge," a drug that enables human bodies to physically meld in a disgusting-but-supposedly-erotic union. (And, of course, it gets the merge user high.) Little does Della know that she's about to be implanted with Manchile, the boppers latest weapon against the human. Manchile is a programed, tailored, organic creature, whose destiny is determined by his bopper-written DNA. He's on Earth to reproduce at an almost bacterial-rate--twelve generations a year, ten children an individual. Manchile's descendants will colonize Earth for the boppers, and Cobb is reheated and given a new robot body so that he can play a small part in the coming days.
Della's cousin Willy, Cobb's grandson, is pulled into the conspiracy. The attempt to replace humans with bopper-created beasties fails, but Willy is able to liberate a bopper being held in bondage by its Asimov circuitry. The boppers' coup has teribly consequences, as the humans release a tailored fungus that eats their circuitry. Many boppers are killed, but evolution continues, as the Happy Cloaks from Software gain sentinence of their own.