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So a company selling operating system CDs is a hardware vendor, I suppose.
Software is The Glass Bead Game
Posted Jan 20, 2012 15:50 UTC (Fri) by nybble41 (subscriber, #55106)
Not unless they're selling them for about twenty cents each (the cost of a blank CD, plus handling). The CD is indeed hardware, but the value in this case isn't the hardware, it's the copy of the software embedded in it. The hardware is incidental to their business, and could be trivially replaced with any other convenient storage medium, or even no hardware at all (e.g. direct download).
Actually real price was something like $3-$5 at the time...
Posted Jan 20, 2012 16:02 UTC (Fri) by khim (subscriber, #9252)
Not unless they're selling them for about twenty cents each (the cost of a blank CD, plus handling).
It's not feasible to sell them for $0.2. You'll not cover even S&H costs. $3-$5 is realistic, and yes, it was done when that made sense.
Posted Jan 20, 2012 16:22 UTC (Fri) by giraffedata (subscriber, #1954)
Posted Jan 20, 2012 16:52 UTC (Fri) by nybble41 (subscriber, #55106)
I wasn't counting shipping in the price, just the blank CD and whatever it costs to burn data onto it. Feel free to substitute a more realistic base cost; it's been a while since I priced blank CDs, and the overhead was no more than a guess. Including S&H, $3-$5 is well within the margin of error.
In the case you cited, as giraffedata pointed out, they really were a hardware & service vendor--they were paid for the CDs and the service of filling them with third-party software (plus S&H). No one would pay them for the software itself knowing that said software is available for free.
In short, if you're making a standard retail markup over the cost of manufacturing the discs, you're a hardware/service vendor. If you're making significantly more than that, then you're being paid for the data on the disc, not the disc itself, which makes you a software vendor.
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