[August 1, 2016] was something of a red-letter day for the tech industry. When the stock market closed, the five most valuable companies on the planet were, for the first time, technology concerns. And they all hailed from the West Coast of the US, whether the San Francisco Bay Area (Apple, Alphabet and Facebook) or in and around Seattle (Microsoft and Amazon).
In subsequent days, ExxonMobil — which held the title of world’s most valuable company until it was overhauled by Apple — edged back above Facebook and Amazon. But it may only be a temporary reprieve. A seemingly inexorable shift in business and stock market momentum is under way, as today’s technology leaders assume a more central place in personal and business life.
Ten years ago, at the height of the PC era, Microsoft was the only tech company in the top 20. Now, though, the big five control a much wider array of digital platforms around which life and work revolve — from smartphones and cloud computing data centres to mobile messaging apps.
They are also racing each other to build the next platforms, from virtual reality headsets to driverless cars and digital assistants powered by artificial intelligence.
Only China, thanks to a domestic market that is hard for outsiders to penetrate, can lay claim to tech companies with the scale and ambition to compete.
That has been underlined by this week’s detente in the ride-hailing wars, which has seen Uber’s global expansion halted and a new Chinese digital champion crowned, in the shape of Didi Chuxing.
Today, the key question is: which markets are next in the big five’s sights, as they cast around more widely for growth?
The market value rankings over the last couple of decades offer a glimpse at the world’s changing economy. At the peak of the dot-com bubble in March 2000, tech companies including Microsoft, Intel and Cisco were among the biggest companies in the world — and they are still giants. Ten years ago, big banks, Chinese industrial and financial companies and global commodities firms crowded the market cap big leagues. Five years ago, Apple became the biggest company in the world by stock value, a position it has occupied with some interruptions since then.
In addition to Apple, the growing might of Google, Amazon and Facebook have lifted those companies to new heights and Microsoft’s market value has rebounded under a new CEO. Non-tech titans like Exxon and GE have slipped a bit. Stock investors are now willing to pay more for a dollar of future earnings for the tech superpowers than they are for most other corporations. Of course, technology’s Fab Five may not last in their lofty perch. The streak could end after one day. Good times never last. But for the moment, technology is on top of the world.
Every industry uses computers, software, and internet services. If that’s what “technology” means, then every company is in the technology business—a useless distinction. But it’s more likely that “technology” has become so overused, and so carelessly associated with Silicon Valley-style computer software and hardware startups, that the term has lost all meaning. Perhaps finance has exacerbated the problem by insisting on the generic industrial term “technology” as a synonym for computing.
There are companies that are firmly planted in the computing sector. Microsoft and Apple are two. Intel is another—it makes computer parts for other computer makers. But it’s also time to recognize that some companies—Alphabet, Amazon, and Facebook among them—aren’t primarily in the computing business anyway. And that’s no slight, either. The most interesting thing about companies like Alphabet, Amazon, and Facebook is that they are not (computing) technology companies. Instead, they are using computing infrastructure to build new—and enormous—businesses in other sectors. If anything, that’s a fair take on what “technology” might mean as a generic term: manipulating one set of basic materials to realize goals that exceed those materials.