Depends on your market position. You can create a lot of value in the marketplace by commoditizing and simplifying an over-serviced, over-delivered, over-matche

Depends on your market position. You can create a lot of value in the marketplace by commoditizing and simplifying an over-serviced, over-delivered, over-matched product. This works in software too. For instance, Gmail and Amazon Web Services pull prices down on webmail and cloud services respectfully. If the competition's strength is excellent service for more, provide no service for less. I know it sounds weird, but it has often worked. In a maturing market, many pragmatic and conservative customers will prefer the cheaper, simpler packaged product. The key is that you cut prices by far less than the actual cost of service of the premium competition, so you can make more profit across a wider base of customers.