Might we be witnessing the collapse of all computer related mega-profitable
business?
For instance, grocery stores, generic restaraunts, mom & pop gas stations,
farmers in non-drought years, all run about a 3% profit. That seems to be
the level you get when anyone can do it and you have a commodity. But it's
still enough to keep people doing it and feeding their families. Barring
monopoly and collusion of course, which can get you higher profits for
oil, electricity, windows, or diamonds.
My theory - within 2 years software/hardware will reach this state. If
you're making more then 3% someone small can come along and kick your ass
quite adeptly by doing it better or for free, and you'll have to cut prices.
Intel, Cisco, Sun, and EMC would know about this one all too well.
The evidence for this abounds, everywhere you look, companies are getting
eatten by the little guys with the weapons of open source, open hardware,
and moores law. Hardware has vastly outrun real peoples ability to use it,
and a beastly computer is $700 if you really go nuts (my roomie just built a
box for his mom better then anything I use for 700). Charging for software
is getting harder and harder, since I can put together most everything I
need from free($) software, and we all know where charging for web services
is going - only the ISP can even hope to run that way by burrying the cost.
And I think the latest innovation in computing was multi-threading and that
was 20+ years ago, so patents without prior art are not gonna happen.
This stuff isn't hard anymore.
So in 2 years, we'll all be working at biotech companies becasue patents ==
monopoly == profits. The computer hardware that isn't already made in asia
will be (by children of course), the software will be free($) or written in
India. Linux (and windows) now has OS X to copy and will get its GUI
together. And yet AOL and Disney will still own you.
This was all covered in my macro and micro econ classes at the U of MN
during high school... ah the good old days.
But hey, _THIS_ time the rules could be different... we could make 4%.com
- Adam L. "Duncan" Beberg
http://www.iit.edu/~beberg/
beberg@mithral.com
This archive was generated by hypermail 2b29 : Fri Apr 27 2001 - 23:15:09 PDT