Software

Growing up in the Bell System when software-controlled central offices were just coming into being (one of the main reasons I, a computer and software guy was hired), I watched the whole business develop.

One of our "discoveries" was that once the hardware was in place, you could charge anything you pleased for the software - no software, no dial tone for your customers.  And, there were very, very costly annual software upgrade fees.  Very neat. Very profitable.

Today, older and I pray wiser, I notice that Apple downloads software upgrades to all the apps on my phone FOR FREE.

This business model truly escapes me - the apps were free to begin with.  Back in the day, our ears would have been bleeding trying to figure this out.