High gross-margin software economics are ending, with scale replacing margin as the primary value driver.

The era of high gross margins as the norm in software is ending, to be replaced by lower gross margins, much thinner net margins, and much greater scale.

“This era of high gross margins being the norm is just going to go away. And what's going to make up for it, I think, is lower gross margins, much thinner net margins, and just much more scale.”