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When does Microsoft get commoditzed?







When does Microsoft get commoditzed?

When does Microsoft get commoditzed? 02/18/2004 09:34 AM

Kevin Werbach pointed to this note about the fact that a baseline personal computer is now sub $500, following the trajectory of Moore's Law, yet the price of the software needed (from a professional perspective -- WinXP Pro and Office) costs more than the hardware. 

I've been spending considerable time looking at the economics of software manufacturing and distribution in the face of open source and offshore software development, and it strikes me that in the near future Microsoft will clearly face an erosion of their core software margin business as a result of the commoditizing economics of clone software manufactured in China at 1/100th (or less) the cost of manufacturing the software in Redmond. 




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