I don't know if any of that holds true anymore. Marginal Cost to Manufacture - Not in terms of cardboard boxes and CDs, but you can't scale up your user base w

I don't know if any of that holds true anymore. Marginal Cost to Manufacture - Not in terms of cardboard boxes and CDs, but you can't scale up your user base without paying hefty fees to cloud providers or payment processors these days. In any case, software companies aren't valued on the basis of gross margin but recurring revenue and operating cash flow. Barriers to Distribution - OK, this is still mostly true. I will say that "enterprise" type software tends to require RFPs, SSO integration and regulatory compliance that can let monopolies fester, like Microsoft (and Adobe). I wouldn't say software is displaced at all though. Companies are simply buying the competition as in the case of Figma, (or Instagram, or Activision) or pouring money into developing vertically integrated solutions to strengthen their moats further.