Several years ago, out of frustration with available options, I wrote my own blogging software. Writing your own solution gives you at least the promise of getting exactly what you asked for. But it's not cheap, even if you aren't paying somebody else to do it. Keeping up with a changing world is expensive.
Today I'm dumping my homegrown solution (old posts are preserved in the archive) and switching to Drupal, the open-source "community plumbing" platform we've used at work for several recent projects.
Drupal is emblematic of what's happening in the software world. It began with one developer trying to "scratch an itch," not unlike my little project to build my own tools. But it has grown into a robust system supported by hundreds of volunteer programmers, each scratching a personal itch, but collectively building toward a common goal. I can't keep up with "competition" like that, and neither can most commercial software companies.
Not all software is being commoditized that way. But the major categories are all covered -- in fact, open-source software powers most of the Internet, including Web servers, mail transport and relatively obscure (but essential) functionality such as DNS lookups. Over time proprietary solutions become eclipsed by open competitors.
This does not mean the death of software technology companies; it just means focus must shift from proprietary end-to-end solutions into profitable niches and services where genuine value can be created.
The same thing is happening to media.