What even is a “Tech Company”?

Steve Jobs and Bill Gates at the All Things Digital conference (Wikipedia, CC-BY 2.0)

But why would you care?

A type of business, category or industry a company operates in defines the way the company works, what processes and regulations it must follow and what employees are doing on a daily basis. As a customer, a supplier or as an employee you would want to know what you can expect and whats associated with it. If you’re a software engineer for example, working for a software company is different than working for a retail company focused on e-commerce. E-commerce retail companies usually don’t ship their software to customers, apart from their online shopping websites and apps. The experience of working for an e-commerce company is very different than working for a software company.

Software companies stopped having warehouses when they moved from phyisical delivery of software on Floppies, CDs and DVDs to downloads. Computer hardware manufacturers however still operate warhouses to ship their devices (Source: Wikipedia, CC)

Why do they call themseleves “tech” then?

While its an individual decision of a retail or transportation company to identify itself as a “tech company”, there’s of course a trend behind it. Especially software businesses are some of the most profitable types of businesses out there, getting very close to the profitability of the finance industry.

What actually is a technology company?

Most software or hardware companies are identified as a “Tech Company” by outsiders or the media. The term “Big Tech” or “Tech Giants” often describes companies like Apple, Microsoft, Amazon, Google or Facebook. Apple, Microsoft, Amazon and Google all build software or hardware that you can license, buy or rent.

Wikimedia developers getting taught unit testing in software engineering. (Wikimedia, CC)

What a technology company looks like

Fore the sake of simplicity, I’ll focus on the software part and leave the hardware a little aside. Software companies are very precisely defined in Wikipedia and are easy to identify.

Are car manufacturers tech companies then?

If you’ve read the above carefully, then you might have realized that the above almost entirely applies to car manufacturers like VW, BMW, Mercedes Benz, Ford, Tesla or Toyota. And there’s a solid reason to ask if BMW is more of a tech company than Netflix. Netflix is essentially a media production and publishing or broadcasting company. Netflix does not openly license or rent its software to others. Software is not Netflix’ main business and software is not the main business of most e-commerce companies.

Boxes with Microsoft Office software on CD or DVD sold in retail stores. (Wikipedia CC0 1.0)

Final thoughts on what a “Tech Company” is.

It certainly seems to be en vogue to be a technology company and calling yourself a “tech company” while you’re actually shipping male underwear. However, technology companies actually ship technology.

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Jan Kammerath

Jan Kammerath

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I love technology, programming, computers, mobile devices and the world of tomorrow.