Wrong.

Hardware provider => platform provider => application provider. This is the hierarchy of the cloud-era Internet. Think AWS => Engine Yard Cloud => Zendesk.

Hardware is becoming a utility. AWS is billed exactly like electricity: pay for what you use, use it however you see fit. Platforms follow this model too, with a healthy markup.

Apps are what really matter, and what drive value from a platform and hardware. Money comes from customers paying for apps.