Open Source creating a new software industry

Open source is undermining shrink wrap software and fundimentally changing the software industry claims Ray Lane, a managing partner in Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm. The software market is in transition from high profit margins of 70% or more to margins more in line with the hardware market at 20%.

While Microsoft have been successfull at selling software at high margins the entire industry is now experiencing a contraction due to the availability of quality open source solutions which can be used with minimal technical experience.