Software became a commodity
At the start of the twentieth century, a serious factory ran its own power plant. A room full of dynamos, dedicated engineers, permanent maintenance. Having electricity was a competitive advantage: if your generator was better than your neighbour's, you produced more.
Thirty years later, the idea was absurd. The grid arrived, the price fell to the marginal cost of generating a kilowatt, and no factory ever bragged about where its current came from again. Electricity became what it is: a commodity. You buy it, you use it, you don't think about it.
Software is going through exactly the same thing.
How a market dies (and a better one is born)
When something commoditizes, three things happen, always in the same order.
First, the price falls to marginal cost. Electricity fell to the cost of burning coal. Software falls to the cost of running servers — and that cost is public: an instance, a database and bandwidth are measured in dollars per month, not per user. Charging $50 per user per month to store contacts in a table only holds up while customers believe there's something scarce inside. There isn't.
Second, differentiation moves elsewhere. When the product is indistinguishable, the winner is whoever distributes best, not whoever has the best product. In electricity, the grids won. In software, differentiation moves to the only things that can't be copied: trust, service, the data you've already deposited. Code stops being the business.
Third, incumbents deny it until the end. No generator salesman applauded the grid. No SaaS company is going to announce that its product is worth what it costs to run. You'll hear them talk about "value", "experience", "ecosystem" — anything except marginal cost, which is zero.
Nobody brags about their CRM
Look at electricity again: today nobody picks a hotel for its generator. You pick it for what the hotel does with electricity.
The same goes for your company. Your CRM is not a competitive advantage: your competitor has the same one. Neither is your link shortener. They're plumbing. What sets you apart is what you build on top: your product, your customer relationships, your speed. Every dollar you overpay for plumbing is a dollar that doesn't go to what actually makes you different.
The great news
Commoditization only sounds like a loss to whoever was selling artificial scarcity. For users it's the best possible news:
- You pay what it costs. No per-seat licences, no renewal hikes. The cost of the cloud, at cost.
- Software gets boring, and boring is good. Like electricity: it's there, it works, it's not news.
- Budgets move. What today goes to undifferentiated subscriptions tomorrow goes to what truly differentiates your company.
That's why Zerosoftware exists in this shape: open code you can take and self-host for $0, or the cloud at cost, with zero margin, so you never have to think about it. Like electricity: you buy it, you use it, and you spend your energy on something else.
Nobody brags about their generator. Soon nobody will brag about their CRM. And the world will be a little cheaper and a little fairer for it.