However, there is a big gap between understanding and implementation. Even though they have a great brand, and even though they make great products, they still use price as a weapon. And it does not stop there. In addition to using price to gain share, Microsoft uses price to protect share. If a software company is willing to lower price far enough, it will discourage others from entering the market.
Price can be both the means and the end.
While some software executives do share a similar respect for the economics of price, share, and scale, many are oblivious to these concepts. As such, they are potentially vulnerable to aggressive attacks by Microsoft or any other company with a greater respect for software economics. There are two types of vulnerability. In the first category are those companies that mistakenly find comfort in fragmented product sectors. Second, are those companies that have majority market share, but fail to price aggressively enough to deter market entry.