This is not ridiculous, it's the definition of Software as a Service. There are two main factors at play: 1) Cost of reproduction (copying) 2) Value to end us

This is not ridiculous, it's the definition of Software as a Service. There are two main factors at play: 1) Cost of reproduction (copying) 2) Value to end user Hardware has historically been harder to reproduce because it's physical. This gap is closing as hardware becomes a commodity. You don't need a server anymore - just spin one up on EC2. Need chips? visit a Chinese bulk electronics markets and buy them by the scoop. Software provides more value to the end user because it makes the hardware do something. People pay for great software because it cleverly moves information around to meet their needs. You still need hardware to run it, eventually, but it becomes dramatically less important. The servers that power your webmail are entirely abstract to an end user. Angry Birds runs on basically anything. etc