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Why don't people realize that 'high software profit margins' are fugazi?

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  1. Software is not abundant. Software is expensive. Software developers are expensive.

  2. Google and Facebook are not build on dirt-cheap software. They pay some of the highest salaries in the industry.

  3. Price is a negotiation. Say I sell a software product for $50/month. Either it generates more than $50/month value to you, in which case you buy it, or it doesn't, so you don't. How much it's costs me to deliver it is irrelevant to you. If you think you can get a better deal using a different product, then go do that. If enough people do that, I am forced to lower my prices, change my product, or go out of business.

  4. If software is that easy, you should start a software company.

If software is that easy, you should start a software company.

Hmm... Is it unethical to release software for free? I was just thinking- my first thought after reading 4 is: "if software was that easy... I wouldn't be starting a software company, I'd be releasing it for free or by donation."

This goes against my intuitions, but- in an economic sense, releasing OSS that serves the purpose of a paid product is subsidizing the undercutting of that product and reducing programmer salaries right? Which could potentially stifle innovation.

Ideologically I want software to be free, but this thread has made me consider that releasing software for free could have negative effects on the ecosystem.