| The thing about a competitive market is that it requires that cost of switching is low. The higher the cost of switching, the more leverage the company has over you. SaaS and cloud providers in particular have a lot of leverage over their customers due to the typically high cost of switching. E.g. what does it cost to move your whole infrastructure to a new cloud? They can basically gouge you up to that cost threshold. These cost of switching actually leads to a market that is not competitive in the traditional sense. Yes, competition on the surface, but monopoly within. It's true that gouging can't be as egregious as a true monopoly environment, but certainly much higher than a low cost of switching environment. The big tell is margins. Anytime a company can sustain excessively high margins, it's usually a tell that theres a lack of a competitive market. A lot of software companies get high margins either by being first to market (by many years), or leveraging high cost of switching. Despite software being cheap to deliver, it's also cheap for your competitors to deliver, so margins should be low in a highly competitive market, regardless of marginal cost of production. I do believe new regulation is needed to handle these business models such that we can continue to foster a competitive environment. It would have to be very carefully crafted to prevent unintended second order effects of course. |