[theatraine]

I think that one of the biggest advantages with software, is that you have access to the best distribution network, the internet, immediately. With hardware, and physical products in general, there's many hurdles (ie manufacturing, regulatory, shipping) to overcome before you can reach an end user. Furthermore, iteration is much, much slower with a physical product.

I think that that is one of the reasons we're seeing such a huge shift to the virtual world. Problems that used to be physical are gradually becoming software problems. A great example is how media is starting to largely be distributed through online channels, ie iTunes, or what Amazon is doing to retail. I recently started http://www.AudioNotch.com, a site that provides tinnitus therapy through online music. Before the proliferation of mp3 players, this problem would have had physical elements, I would have to mail CDs with the audio therapy for example, and users wouldn't be able to change their music easily. But now, due to pre-existing technology, I can do everything virtually. Unfortunately, it looks like the medical devices industry will be one of the last to make this change.