Tech's Big 5 -- Here to Stay? (nytimes.com)

schwit1 tips a piece at the NY Times about the most entrenched companies in consumer technology: Amazon, Apple, Facebook, Google, and Microsoft. The article makes the case that these five have a such a strong grip on the modern tech industry that they're destined to stick around for the foreseeable future. From the article: Tech people like to picture their industry as a roiling sea of disruption, in which every winner is vulnerable to surprise attack from some novel, as-yet-unimagined foe. ... But for much of the last half-decade, most of these five giants have enjoyed a remarkable reprieve from the boogeymen in the garage. And you can bet on them continuing to win. So I’m coining them the Frightful Five. .... Though competition between the five remains fierce — and each year, a few of them seem up and a few down — it’s becoming harder to picture how any one of them, let alone two or three, may cede their growing clout in every aspect of American business and society. ... In various small and large ways, the Frightful Five are pushing into the news and entertainment industries; they’re making waves in health care and finance; they’re building cars, drones, robots and immersive virtual-reality worlds. Why do all this? Because their platforms — the users, the data, and all the money they generate — make these far-flung realms seem within their grasp."

Comments

Buy disruption

[plopez]

This is the age old pattern used by established monopolies or oligopolies. See the purchase of Lyft, investment in Uber, the purchase of Foxpro, how the oil and gas industry purchases wildcat operators as just a few examples. If you have a large amount of cash and are too large to innovate, buy the innovation before someone else does and threatens your business.

Nerver try to predict the future

[NotDrWho]

20 years ago, only two of those five companies even existed. And if you had asked the prognosticators back then who would still be on top 20 years later, you would have gotten a very different list.

Re:Nerver try to predict the future

[Dins]

Yep. TFS even says, "But for much of the last half-decade, most of these five giants have enjoyed a remarkable reprieve from the boogeymen in the garage." Half decade. 5 years. So the entire point is that because something has stayed somewhat stable for 5 years that's probably going to continue into the foreseeable future. In the tech industry, no less...

TFA is horribly near sighted.

Re:Nerver try to predict the future

[ranton]

This all depends on what their actual prediction is, which I don't think is very clear even after reading the article. All it really says is they will remain major players in the industry for the foreseeable future. It is so broad, unspecific (and useless) that it will almost certainly come to pass.

Very few companies of their size just go away. At worst one of them could be bought out by a rival, but I doubt their brand name would ever be discarded. If the prediction was that all 5 of these companies would be among the 10 most influential tech companies 20 years from now, that would be the kind of silly prediction you are referring to. But will some people still be employed by all five of these companies in 20 years? That prediction will probably pan out.

Re:Nerver try to predict the future

[gstoddart]

No, because in part patent consolidation means the boogeymen in the garage have no hope in hell.

Come up with new and disruptive technologies? We'll buy you out as soon as you're on the radar.

Won't sell because you have visions of being the next big thing? We'll ensure our lawyers make it so you'll never see the light of day.

The tech industry has fundamentally changed. There IS no way a startup could do something which isn't covered under patents and other agreements between the big companies who have all mutually agreed to licensing deals.

Time was people started companies because they had a cool idea for a product, and wanted to start companies.

These days it's give the illusion of a cool product long enough to cash out and run like hell.

It's stable because it's becoming increasingly impossible to get into the game.

Re:Nerver try to predict the future

[Junta]

Yeah, 20 years ago, Microsoft is the only one of those that would have made such a list. AOL, IBM, Yahoo, and Netscape probably would have rounded out a 'top 5' list in that timeline,

10 Years ago, Google is the only one I'd unambiguously considered to have joined the list. . If I had to make a top 5 list for that time frame, Microsoft, Google, Myspace would be firmly in it. Amazon as a retailer was of course a slam dunk, but less so as a 'tech' company, so I'm not sure. Apple is tricky, since as a music player platform they clearly had ascended as a dominant player (and therefore had enough leverage to effect good change for DRM in music), but the real overwhelming Apple presence happened with the iPhone.

At each time, it was difficult to *imagine* how those players could be unseated given how much they dominated that particular time. MS is the only one that really held on to their position. Netscape, Yahoo, AOL, and Myspace being gone and/or essentially defunct is something no one would have believed in their respective heights. Most of those enjoyed a similar 5 year period where no apparent competitor was coming for them, so the metric of 'it's been 5 years and still going strong' isn't very good by itself.

Re:Nerver try to predict the future

[doom]

The advertising apocalypse arrives, the value of internet ads drops to zero, and google's main revenue stream evaporates. Google goes on life support living off it's cash reserve for years while it goes casting around for a great new idea that never quite comes off. (See, Yahoo, SGI, etc.)

Re:Nerver try to predict the future

[spire3661]

Amazon launched July 5, 1994.

Re:Nerver try to predict the future

[squiggleslash]

Trying to figure out who would have been on the list in 1996: Microsoft, Yahoo, Dell, Compaq, and Nokia? (Genuine attempt to think back then - today, Microsoft and Dell are still independent and strong, Yahoo is in danger but is still around, and Compaq and Nokia no longer exist in the same form as they once did.)

Apple wouldn't have been on anyone's list, not even a die-hand Apple enthusiast's. At that point it really was "beleaguered"...

Ten years ago: Microsoft, Google, Apple, Blackberry, and Dell?

âoeHere to stayâ

[farlukar]

Since when has Amazon actually been making a profit, then?

Stupid article is stupid

[the_skywise]

Yahoo will be king of search engines forevah!

AOL is indestructible!

Prodigy? Silicon Graphics? Sun?

Naaah, naah... These "frightful five" companies will be with us "forevah!"

Automotive's Big 5

[Nidi62]

A 1940s article headline:

Are some of America's best car companies-Studebacker, Oldsmobile, Pontiac, Packard-here to stay?

You can never predict what will be around a year or 2 from now, much less over the next 10, 20, 30 years.

Also, Car Analogy!

Amazon I think may fall down a bit...

[HerculesMO]

I have friends who work and who have worked there.... the job climate is basically ridiculous. Lots of hours, the pay not as great as their neighbor in Seattle (Microsoft), the advancement not very good either. Not to mention, Amazon is basically falling down in the enterprise space. They have made a lot of gains with CIOs/CTOs who are infrastructure focused and have a mission to "cut costs," so they have companies like GE and the like moving over to use their IaaS, but their platform services are a joke.

Everything at AWS is rehashed open source that is made to fit into a 'cloud' world... nothing wrong with this of course, but most of the basis of their products never really was meant for humungously distributed systems. Microsoft on the other hand (love them or hate them), made a totally new stack for cloud and the development community is embracing it on the enterprise side. This is Amazon's game to lose, but given the way their storage is segregated, their platform is one-way (come to us, no migration path anywhere else!), and their costs are nothing to write home about (because everybody price matches the IaaS pricing now).... I dunno, it's not going to be great for them going into the future. Of course I could be wrong, but right now I think given their human resource problems, their platform issues, and their inability to focus on developers (since they cater more to the ITPro crowd with IaaS solutions), it doesn't look good long term for them.

Re:Amazon I think may fall down a bit...

[microTodd]

I guess you're modded up because you sound interesting, but really? I'm not trying to be insulting but do you know what you are talking about?

This article is a little old but AWS really is that far ahead of everyone else.

Plus, in terms of services and features, AWS is also ahead.

Now where Azure has benefit is if you're an MS shop and you want to just outsource your entire backoffice. But if you're developing....AWS has a lot more features than Azure, if you know what you're doing. No, you can't throw together a .NET wizard-based project, but if you're using an open source stack, or more of a LAMP-like MVC environment (python, rubyonrails, etc) then AWS throws so many tools for you to use (RDS, Dynamo, S3, etc) then its hard to see how you DON'T think AWS is a good environment for developers.

And what do you mean by "Platform Issues"?

And actually, all the enterprise developers I've worked with are looking more at AWS than Azure (not that I'm some sort of worldwide development expert or anything).

Everything that can be invented HAS been invented!

[aaron4801]

Nothing will ever change; the world is static; progress is over. So says the New York Times.

Of the five

[QuietLagoon]

I'd say Microsoft is most likely to be displaced. They've shown a distinct inability to innovate, e.g., they are now trying to hold on to market share via fear-mongering to their customers.

.
If Microsoft were as entrenched as the article implies, then they would not need to employ such despicably deceitful tactics in order to get Windows 7 customers to upgrade to Windows 10.

Microsoft is showing their desperation as they try to remain relevant.

Re:Of the five

[Anonymous Coward]

Totally wrong. Microsoft might fall in relevance some, but there is NOTHING to replace it in a corporate world.

Facebook has to be the most likely to fall the fastest, and Amazon the most likely to become something other than it is.

Re:Of the five

[Barlo_Mung_42]

Microsoft is a lot more than just Windows. Both MS and Google seem well diversified. I think MS has at least five different divisions that bring in over a billion dollars. They've done a good job of spreading out their investments so all their eggs aren't in one basket the way Apple has done with iPhone. PC sales are slowing but the notion that they would be replaced by tablets and phones just isn't coming true. People still need to get things done so the PC is here to stay and Windows10 is the most successful OS release in history so it's hard to imagine MS going the way of Palm any time soon.

Re:Facebook is already declining

[TWX]

Facebook appears to have gone a lot further than MySpace did in integrating itself into basic web services. As such it will be harder to dislodge even if its core end-user business ceases growing or even shrinks, as they'll be able to be come a metrics and ratings and data company.

That said, there's still no reason to assume that any given tech or Internet services company will always be around. Go back a few years and AOL and Yahoo were juggernauts. Go back before that and IBM was hot.

Companies live and die by the research and development or the design they do that turns into products. Cut off the R&D, eventually the company withers on the vine. Apple has experienced it when Jobs wasn't at the helm, and other tech companies have folded because they myopically assumed that whatever thing they'd done to make their name would continue to bring in revenue. Look at how long Palm hung-on to PalmOS. Palm could have been what the iPhone and the Android platform have become if they'd not stunted themselves. Granted, their various corporate masters over the years didn't help, but the end result is that they're gone despite having been quite innovative when their products debuted.

Unless there's an Advertising Crash...

[rockmuelle]

Google and Facebook make almost all of their money from advertising/consumer tracking related activities. Both would be very different companies of they had to rely on direct revenue sources.

Facebook could shift to a subscription model and probably do fine - I'm guessing at least 100M or so people will pay $5-10 a month to keep sharing photos with friends and family - FB works well to keep people connected. If they can't run their infrastructure and development on $500M-$1B a month, they already have bigger issues that will bring them down.

Google will have a harder time. They have nothing of value that could fund their operations beyond the ad/tracking services. A crash in the ad market would probably be the end for Google.

Amazon is probably fine for a long time. The web needs a storefront, Amazon provides it.

Apple can crash by ignoring user's needs. As a hardware company with a ton of money in the bank, it will take a while. But, Apple could lose market share quickly if another consumer computing trend emerges that cuts into their hardware business. See Blackberry for a recent example.

MS is too entrenched in the business/consumer world to go anywhere. Just like Oracle won't go anywhere for a long time.

Just my quick thoughts on the topic...

-Chris

Re:Unless there's an Advertising Crash...

[cfalcon]

I completely agree here. There are so many things that can go wrong with the advertising model.

First and foremost, people are slowly developing a resistance to advertisements. Ads have gotten vastly more intrusive and hostile, on all dimensions (meaning you're likely to see an advertisement that wiggles [hostile by exploiting the neurons that detect movement, instead of offering a compelling sell], you're likely to see an advertisement that tries to make you feel bad [a mainstay of advertising is pretending you have a defect and convincing you they have a fix, we are seeing more extreme stuff on the psychological axis], you're likely to see an advertisement where there didn't used to be one [novelty from climbing on the "ubiquitous hostile noise" axis] ), but this can only really ramp so far. The attitude of "I'm not affected by ads" is false, but the AMOUNT that you are affected by ads is absolutely shrinking. There's a concern that advertising clients will in some cases realize this and, if enough do at the same time, crash the industry.

Remember, it is MUCH MORE LIKELY for advertising to crash suddenly than decrease in ANY OTHER WAY. Regardless of your view on whether ads will be profitable in the future or not, in the CASE where they are less profitable, the industry itself will be able to mask this for much longer than any other industry (because their job is literally making you believe shit). So if it DOES go down, traditional predictors may not apply until it is way too late.

Second, people are becoming hostile to advertisements in unusual numbers, and making efforts to avoid them. Every Netflix user is explicitly dodging ads with his wallet and time. If Netflix were to put ads in shit, they'd be in serious trouble, and they know it. Every Netflix tells content providers that they have other ways to make money, and reminds people that they don't have to spend their whole life being attacked by jackanapes. Adblocking will win the technical fight, and while users of adblock software (I recommend ublock origin, and I think we know what apk host engine guy recommends!) are small in number, it is becoming MUCH easier to help non-technical people use these products, and they are becoming more popular. Every person who watches ad-free shows and views the ad-free web is someone who is much less likely to want to see ads in the future.

It all sums to advertisers having to jump through higher and higher hoops for lower and lower returns. If you throw ANYTHING to jostle the house of cards- an economic downturn, a religion recruiting heavily, any of the many political orientations that are ad-hostile gaining adherents, a series of studies that show a shitty ROI on ads- you could see a massive crash.

And here's all these tech giants that are really just about ads ads ads ads ads. It's not a very diverse position at all.

Re:Facebook is already declining

[Penguinisto]

Lousy time to run out of mod points... this was damned good.

I would add though that it's never one factor that makes a company grow, die, or stay steady-state. R&D is one of the most important, but believe it or not, so is marketing, product design, and the state of competition.

We can continue using Palm as an example... the combination of stuff that killed it? Well...

1) As you said, R&D was stifled and stymied, even by its own management.

2) The larger market moved, and gained speed as it did. PDAs were being eclipsed for the same reason pagers were; phones began gaining features that obviated both of them (SMS killed the pager, while Blackberry slowly killed off the PDA. the iPhone was simply the coup d' gras.) To Palm's credit, PalmOS was one of the most-licensed OSes in the North American smartphone market pre-iPhone, but they failed to capitalize on it early/fast enough.

3) competition kept multiplying with no reprieve, with new competitors arriving that were backed by much larger corporations: BlackBerryOS, WinCE/WinMobile, Symbian, iOS, Android, etc etc etc. PalmOS

4) management dithered way too much, and leadership became rather dysfunctional and inward-looking (according to folks who worked there, anyway)

5) investments were grossly misspent, leaving Palm cash-poor at critical junctures.

6) Marketing was AWOL... the Palm brand was incredibly stale by the time smartphones became a thing outside of CxOs and salesmen. While PalmOS did very, very well in North America, its market share was barely above statistical noise in Europe and Asia.

There are a lot of other, smaller factors, but the idea stands - it's more than one thing that determines the fate of a company and its technology, eh? :)

Re:Facebook is already declining

[Joce640k]

Go back a few years and AOL and Yahoo were juggernauts. Go back before that and IBM was hot.

Sure, but... nobody wanted any of those. They were just tolerated until the real thing came along.

The migration was swift when the real thing appeared.

People seem to want Facebook. It will be very difficult to overturn that (Microsoft and Google have both failed and I'm sure Facebook can copy/buy anything that looks like a threat).

LOL

[fluffernutter]

Bullshit. The more technology changes, the more the requirements of the user base change. Facebook is nothing more then entertainment, and it got a boost by it's correct calculation that people wouldn't mind being scanned and manipulated. There are many more services coming that will be real services changing the way we live and work, they just need the general public to come around to using technology first. I would even dare say that Facebook is an early gimmick that worked.

The thought that this is it.. that this is all that technology will ever do for us is such a bleak view. That would mean our very societies will not change which is totally incorrect.

Re:And yet all 5 are almost irrelevant

[Locke2005]

Despite the fact that thousands of Apple fanbois would probably commit suicide if they went away, they certainly aren't a hardware leader anymore; they are falling farther being Samsung and the Chinese companies. We may be underestimating the impact of their integration of software and web services, however; I believe iTunes is a major player in music sales these days.

Re:Facebook is already declining

[0100010001010011]

Facebook is 'pivoting'. They've taken over as the defacto 'forum' software for a large demographic. There are a lot of private invite only groups that people are on. It was just last year that they rolled out half assed threaded discussion. You can reply up to 1 level deep.

My wife was invited to one for her profession that's ~5000 MDs and she loves it. She's buried into it like I used to be to Slashdot. They have pretty good discussion and discourse despite Facebook's shitty "discussion" system.

Every time I try to move one of my groups to a forum or even Reddit it's a constant "But I'm already signed in with Facebook". If there was any way to describe how Facebook has embedded itself the online space it's like a cancer. It'll take years to cut out all the 'share on facebook' links and tracking hooks.

I would kill for a Facebook 2004 to come out. As a social network Facebook is absolutely terrible. As a "place where people are on the internet" it's not bad.

Re:Its about how fast they can move

[Locke2005]

Amazon seems to have the ability to move quickly. Microsoft can reinvent itself when it needs to. Of the big 5 mentioned, Apple now seem slowest to innovate and is falling behind, in my humble opinion.

Re:Facebook is already declining

[microTodd]

As a "place where people are on the internet" it's not bad

I think this is where you hit it on the head, at least from a business perspective. Now I know there's a lot of Facebook haters ("You'll never catch ME on there!"). And hey, good for you. Seriously. But the bald truth right now is that facebook has like a billion users, so if you're in any sort of consumer-facing sector, if you're not leveraging Facebook in some way you're really missing the boat.

Predicting the failure of Facebook

[pastafazou]

Facebook is going to die just like MySpace did. http://motherboard.vice.com/re... As the article states, teens don't use facebook all that much. I have 4 teenagers in my house, and they've all quit using it for Instagram, Tumbler, and Twitter. I think 2017 might be a bit premature, but I could certainly see it in steady decline by 2020. Their growth rate is getting close to zero, so I'd say they're about to hit their peak this year.