Atleast one person in Redmond has a smirk on his face today.

In other words—and I never thought I'd say this—Steve Ballmer was right. Android isn't free. In fact, it's not even cheap. As Daring Fireball's John Gruber points out, the $12.5 billion that Google is spending for Motorola amounts to almost two years' worth of the search company's profits. No company—not even Google—can throw around that kind of cash without envisioning a direct return on its investment.

The cost of technology has become a large and rapidly increasing part of the cost of goods sold in the products that we buy. That's not surprising when you consider the amount of technology that's crammed into an Android phone or the many other tech-heavy products we use. Gone are the days when companies competed primarily over manufacturing costs. Today, managing technology acquisition is the essence of modern strategy. Companies that are most successful at developing and owning new technology and acquiring and controlling the cost of technology will win in the marketplace. Those that fail to effectively manage internal and external technology acquisition will fall behind in the technology race and will find that they cannot afford to pay the fiddler.