[michaelvkpdx]

Perfect, bug-free software has economies of scale.

There is no such thing as perfect, bug-free software.

Once you start getting into any sort of maintenance, bug-fixing, feature creep- you lose all of the economies of scale of perfect software and replace that with the expenses the author discusses in the article.

[RyanZAG]

You've possibly missed my point. The author made the statement that software differs from other items. It does not. Try making a 1km long truck and see if it's perfectly bug free. That doesn't mean trucks don't enjoy economies of scale.

Let me try another way to explain this: if software had diseconomies of scale, then selling each successive copy of your software that you made would make all the software more expensive. Eg, if I made a computer game and sold it to 1 person, I could do it for $10. If I sold it to 10 people, I would no longer be able to afford selling it for $10 and would need to sell it for $20 (x10 = $200 total). Makes no sense right? That's because software enjoys economies of scale. If I sell 1 copy of my game and want to make a profit, I need to charge $500000 to 1 person. If I sell it to 500000 people, I can get away with charging each person $0.99. The more software I sell, the better my economies of scale become.

abrgr explains it nicely in a sibling post here.