[ppeetteerr]

There are too many counter-examples for this to be true:

- Microsoft has been charging for years for Office before getting into the recurring payment model. The reason they got into the recurring payment models is that most office software requires server support and server support is a recurring cost

- There may be future competition but let's not forget that software still costs money to develop. ie. if an entrepreneur sees a market with 2-3 strong providers, they will hesitate to enter in direct competition. And why would they, their profit margins will be minute in comparison to the cost of building the software.

- The market may have software that is so good, that to catch up, competing players would have to spend years building the software (see point 2)

An example of this is Linux. It is free but it's rarely used by non-IT professionals. One can argue that Windows is effectively free these days, but it still charges a license and the price of a laptop is still affected by having Windows installed.

[detuur]

You've answered your own implied question. The price of MS Office is still high because it's in a category of its own, with no competition in sight. But all it takes is one well-motivated competitor to achieve feature parity and that would be the end of MS Office's cash cow position.

MS is already offering Win10 basically for free. Not because of competition, but because it doesn't cost anything to make it free. They can risk changing their business model without being forced to throw money down a hole.

[slgeorge]

It's tough to make that argument.

Features are only a small part of how users consider change - and 'parity' definitely doesn't cut it.

Office is a good example ...

StarOffice originally and then RedHat, Suse, Mandriva (and the previous versions), Canonical and a host of other commercial Linux vendors I'm forgetting, plus Sun, IBM, Linux Foundation, etc have all put resources into competing.

OpenOffice is feature equal for most users - but, it didn't make much of a dent.

For me the Windows 10 situation is partially about competition, but it's mostly about protecting their core market. For the most part they make money from corporate users, not users buying 300 dollar laptops - those are just market capture for the serious money. Any time you hear a parent say "Jonnie is learning MS Office" (not word processing) that's a future corporate buyer.