That's why I used gcc as an example instead of the whole "development tools" category. For some subset of C compiler users, gcc is an acceptable substitute, an

That's why I used gcc as an example instead of the whole "development tools" category. For some subset of C compiler users, gcc is an acceptable substitute, and so there's no reason to pay anyone, anywhere, $.01 for a C compiler. Their business is gone forever and it is no longer worth writing a commercial C compiler in order to get these people's money. Your market is now people with needs that gcc can't fulfill, which is smaller but quite possibly still lucrative. Ditto for Gimp/Photoshop. I crop and scale pictures, so GIMP or Paint.NET work more than fine. Photoshop isn't worth it for me to buy. On the other hand, my wife and I have both bought laptops in the last year and I spent 3x what she did. Her cheap Dell was not an acceptable substitute, so I paid more. Even if the Dell was free, I still would have paid for my bigger faster laptop with 18.4" screen. If in 10 years, GIMP does everything that a graphic designer or artist could want, it will no longer matter how advanced Photoshop is. Just ask film camera makers. The book The Innovator's Dilemma (and its underrated sequel, The Innovator's Solution) talk about this extensively.