And even if the customer loses the original copy, it is a simple matter to enable them to download the software again. Obviously, this wouldn't happen unless there was a perception that people prefer a physical copy of the software for convenience reasons. Given today's bandwidth, many people obviously don't want to download 20-30 megabytes worth of files. With the expansion of the Internet, bandwidth will only increase. Look at the number of people now connecting by ISDN or cable modem.
Companies preparing for the future realize that today's bandwidth limitations are fleeting.
But again, for many products, today's capabilities are sufficient to deliver the product to the customer electronically. I know many people who still use a 14.4 modem, which is not a good speed to be using when you're trying to download even a 1 meg file. As bandwidth increases, I predict the average file size that gets downloaded will also increase proportionally, for the same reason that applications get larger as computers get faster. Call it a deviant corollary to Moore's Law, but bandwidth will always be a problem in e-distribution. The same was also true with the Star Office 4 beta and the SmartSuite 97 beta.