Comments on: Margins in software vs. hardware or services http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/ web business models, information systems, high tech, software economics, SaaS, Software + Service, innovation, new product development, digital strategy, software engineering, remote / mobile / wireless technologies, VoIP, IPTV, blogs, telecommunication business models, computer networks architecture, project management, user-generated content philosophy, entrepreneurial finance, outsourcing, operations - logistics - e-procurement - supply chain management, customer relationship management, telecom billing, clusters of innovation, e-Business, e-Commerce, start-up launch, fast-growing ventures management, globalization + some useless stuff (usually getting the most visits & comments) Wed, 24 Oct 2007 21:23:16 +0000 http://wordpress.org/?v=MU By: Jeff Kee http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32151 Jeff Kee Mon, 09 Jul 2007 23:35:48 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32151 "Instead of licenses, you just pay as you go" Or you don't pay at all!!! And I love it. :) “Instead of licenses, you just pay as you go”

Or you don’t pay at all!!! And I love it. :)

]]> By: Jeremy Fain http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32136 Jeremy Fain Mon, 09 Jul 2007 21:10:54 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32136 Vince, which shift from software to services? I don't understand your point at all. If you're talking of web apps here, then web apps (like Google, Yahoo!, Salesforce, etc.) are PURE SOFTWARE, no service behind it. They're called services for business model reasons: instead of licenses, you just pay as you go. The chart thinks of services as human services, not software services. Vince, which shift from software to services? I don’t understand your point at all. If you’re talking of web apps here, then web apps (like Google, Yahoo!, Salesforce, etc.) are PURE SOFTWARE, no service behind it. They’re called services for business model reasons: instead of licenses, you just pay as you go.

The chart thinks of services as human services, not software services.

]]> By: Vincent van Wylick http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32093 Vincent van Wylick Mon, 09 Jul 2007 08:50:36 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32093 Interesting. That graph doesn't reflect the shift of software to services though, and same for hardware. Would it be a safe bet that as software shifts to software-service, margins are going to fall in the long-run? Sales & marketing costs would increase, R&D would increase, though both R&D and S&M (how aptly named) would benefit from developing long-term relationships with their customers. I can elaborate if that seems unclear. Interesting. That graph doesn’t reflect the shift of software to services though, and same for hardware. Would it be a safe bet that as software shifts to software-service, margins are going to fall in the long-run?

Sales & marketing costs would increase, R&D would increase, though both R&D and S&M (how aptly named) would benefit from developing long-term relationships with their customers. I can elaborate if that seems unclear.

]]> By: Jeremy Fain http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32091 Jeremy Fain Mon, 09 Jul 2007 08:25:56 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32091 Ilias, Could you maybe rewrite your comment in English? The bulk of the people reading this blog doesn't speak French. Thanks, Jeremy Ilias,

Could you maybe rewrite your comment in English?

The bulk of the people reading this blog doesn’t speak French.

Thanks,
Jeremy

]]> By: ilias http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32085 ilias Mon, 09 Jul 2007 05:12:27 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32085 c certainement stupide, mais a la 3eme ligne, 3 colonne, i think it should be 60 to 20, unless the previous row is wrong ;) Toutefois, je trouve que les marges devraient etre superieur pour les services, je pense aux cabinets de consulting et autres firmes comptables par exemple. L'exemple de l'outsourcing indien n,est pas forcement pertinent a mon sens car il se concentre sur des taches a faible valeur ajoutée. Je m'entends, c'est relatif et temporaire, je sais que Deloitte outsource une partie de ses processus comptable en Inde, donc on s'entend que c'est pas general. Pas de mauvaise comprehension svp ;) c certainement stupide, mais a la 3eme ligne, 3 colonne, i think it should be 60 to 20, unless the previous row is wrong ;)

Toutefois, je trouve que les marges devraient etre superieur pour les services, je pense aux cabinets de consulting et autres firmes comptables par exemple.

L’exemple de l’outsourcing indien n,est pas forcement pertinent a mon sens car il se concentre sur des taches a faible valeur ajoutée. Je m’entends, c’est relatif et temporaire, je sais que Deloitte outsource une partie de ses processus comptable en Inde, donc on s’entend que c’est pas general. Pas de mauvaise comprehension svp ;)

]]> By: Jeff Kee http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32073 Jeff Kee Sun, 08 Jul 2007 23:06:38 +0000 http://techiteasy.org/2007/07/08/margins-in-software-vs-hardware-or-services/#comment-32073 "Software is the industry with the highest gross margins amongst all industries." I guess with the piracy issues, that's the only way to satisfy their shareholders in terms of profit targets eh? “Software is the industry with the highest gross margins amongst all industries.”

I guess with the piracy issues, that’s the only way to satisfy their shareholders in terms of profit targets eh?

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