Since gross margins gauge the difference between a firm’s product costs and selling price, companies with lower production costs or in-demand products that command higher prices should report higher gross margins than the competition. Table 11-8 compares software vendors Microsoft and Oracle’s recent gross margins
|Fiscal Year||Microsoft (%)||Oracle (%)|
The gross margins reflect the vastly different competitive situations facing the two firms. Microsoft sees virtually no competition since practically all personal computers come with Microsoft Windows operating system already installed. Oracle faces competition from SAG, Siebel Systems, and PeopleSoft, ...