Big Tech Will Either Fail Eventually or Swallow Everything!

Let me ask you a question when was the last time you spent a day without using a service that is not created or owned by one of the following companies: Google, Microsoft, Amazon and Facebook. If you are the average person, that day was very very very long ago. And you can’t possibly remember that day. These big tech companies are so ubiquitous that we don’t even realize it.

We have a set perception of any company I mentioned above, Google is responsible for search, Amazon is responsible for logistics and shopping, Microsoft for its Operating Systems and Facebook for Social Networking. However, none of those perceptions is material, considering all four companies of the above do a lot more than you might imagine, they would love the average not knowing the depth of things they do because that would expose the kind of monopolistic nature of these big tech companies.

Amazon’s main moneymaker is its cloud business, a significant chunk of Google’s and Microsoft’s revenues come from their cloud businesses, Google is the most diversified company based on the number of things it does, Maps, YouTube, Mail, Internet, Phones, you name it, they have it. Amazon is one of the biggest sellers on its platform, giving it an edge over all the other sellers that sell on Amazon, Microsoft builds the Xbox, Laptops and a host of other things.

What’s the thing with big tech entering everything?

Once a company grows big enough, it’s not uncharacteristic to see it try to venture into different areas in search of further growth.

This is exactly what these big technology companies are doing, they are venturing into so many industries that for a few of them, “tech” no longer seems to be their primary business anymore, for example, Amazon. Yes, Amazon is a technology company, but without investing in the brilliant logistics and supply chains it has built, it might not have been where it is today. Amazon is even making a foray into groceries and other industries.

“Why though?” you may ask and the answer is simple, world domination, Amazon is a company that’s going to stop at nothing to garner as much exposure to as many customer segments it can get into, not only does it provide significant potential for continued growth but it keeps bringing it closer to what people associate it with, being “The Everything Store”.

For other big tech companies, take Apple, for example, it’s moved from manufacturing Phones to providing streaming services, credit cards and now even its new AirTag. There’s a phenomenon behind this, Facebook’s primary website, facebook.com is a far cry from the hot website it used to be just ten years ago, and the guys at Facebook know that hence their acquisitions of Instagram and WhatsApp, to not lose relevance.

Google has so much information about almost anything you can search for in the world, still, it makes acquisitions, keeps making its algorithm better, almost barges into new domains now and then.

The keyword here is diversification. We have all been so used to breakthroughs happening in the past twenty years that these big tech companies can’t afford to not be at the cutting edge of… well, everything.

They are just one miss away from losing relevance in case something vastly better comes along the way and they fail to spot it coming from a mile away!

Another reason for these companies to have diversified is to give people the illusion that they are not monopolies. There is no competition to Google in the search space, but there is no one that can claim that Google as a whole is a monopoly since they are also involved in hardware, cloud services and a lot more industries where other players hold a significant chunk of the pie.

What’s going to keep them growing?

What’s the best way to stop competition? Buy the competition.

Facebook is notorious for buying its competition outright. Google makes hundreds of acquisitions in a year, to keep improving its services and to expand the areas of operation. Amazon follows a similar way of simply starving the competition to death in certain cases by releasing products that are similar to its competitors at a huge discount and prioritizing its products in search results.

The very fact that big tech is in so many segments, is a testament to the fact that they are not going away anytime soon even after a significantly better product comes along, because:

A. To run at a scale the big tech companies run, it has to in-turn rely on infrastructure from the big tech companies.

B. Great startups tend to do one thing really good, and even if that one thing gives a significant hit to big tech, it’s not going to be enough to take them out of business since they are so diversified.

C. The big tech companies will see a startup becoming this big from a mile away, and potentially have a plan in place, which usually goes through acquisitions or simply to build a significantly better version of the product with the vast resources they have.

What’s going to stop them?

To understand what could stop them, we need to understand what the most powerful benefit of being a startup is: When you’re small, say two to ten people, it’s much easier to get things done very quickly without getting bogged down by organizational documentation requirements and sluggish communication.

The more people you add to a company, the more difficult it gets for people across domains to communicate with each other, both ideas as well as information.

Today, Google employs thousands, and so does every other big tech company on the list, and their processes for feature development might be very fast compared to other bigger, more political companies, but they are still not as fast as they used to be, and that’s very natural. With bigger companies, there’s always something on the line while developing newer features, their revenues, their compliance, their tests, their projections and their reputation.

Hence, these companies can’t afford to go into developing a project very quickly or just release a prototype version of a product, there’s too much on the line to try something like that. Another reason is that they can’t launch Minimum Viable Products in the general sense, any product they launch is widely covered in the media, people get to know about it immediately, they flock to try it out and the scale at which these companies operate today means even the first version of a product they launch might be used by more people on its first day than the number of customers even famous startups will get in their entire lifetime!

Even a single programmatical error, or wrong colour combinations or slightly off user experience or slightly off accessibility, and the companies might be looking at lawsuits or complaints. All this is not a problem when it comes to a smaller startup that’s just starting and trying to disrupt an industry.

Think of it this way, most of the product features we use today were initially built by startups that were either acquired by a bigger company or grew into a bigger company as time went on. And that’s what I want to highlight, bigger tech companies are just not fast enough to realize an entirely new segment (Maybe they are, we not knowing about that might be proof they might be working on something big behind the scenes.) popping up, it’s anyone’s best guess what that might be, but my gut feeling is there will eventually be one startup at least that will dethrone a bigger tech company by saying no to all the acquisition offers it gets because they would be hellbent on the belief in what they are building, sooner or later.

Another, less sexy reason for big tech to stop is, well, Regulation. Antitrust is a big deal, and the big tech companies have just gotten so big that they are slowly going into the Monopoly category and governments will have no choice other than to split them up if they feel they have gotten Too Big (We already have a lot of cases and lawsuits against big tech, now, what “Too Big” is, is up for debate). Only time will tell whether regulations will be able to stop them or not.

Whatever the case might be, it is indisputable that big tech, no matter how monopolistic, has changed our lives, our habits and our cultures, forever! Today, if you want to learn something, the first place for a lot of you is YouTube, if you want to buy something, the first place is mostly Amazon, if you want to connect with people, it’s either LinkedIn or the plethora of Social Networks owned by Facebook. As long as they stand to benefit us, I don’t have a problem with them going ahead, it’s when the line between questionable practices are enacted in the run for more of your attention and in turn, profits, is when it starts to become concerning for most people.