Bid Now
To see the implications of changing the fundamental cost structure of software, we can examine the case of eBay. Forgetting its business model for a moment, let's look at eBay as a software company. It has built easy-to-use software that allows the user to present items to auction. Its model allows eBay to provide this service for individuals as well as corporations. Let's assume eBay started in the traditional model. It would have built the software, hired test engineers to test it, released it on CD-ROM, and been faced with the problem of how to get it distributed. Let's assume it decided to put a CD in every newspaper in the country—imagine the cost—and then had individuals load the software on their PCs.
Next, it would have set up ...
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