The Everything Platform: How Big Companies Are Trying to Become Everything to Everybody Part II
this is the second part of an essay describing a modern market dynamic in the technology sector on which big software companies are trying to become relevant in almost every new trend. Artificial intelligence, self-driving vehicles, drones, virtual reality, internet of things, messaging platforms are just some of the areas in which companies such as Amazon, Alphabet, Microsoft, Samsung, Apple, Alibaba and others are battling each other for market dominance. In the first part of this essay we referred to this phenomenon as the Everything Platform.
The more interesting questions come when trying to understand the causes behind the Everything Platform trend. The factors pushing this new technology market dynamic can be found anywhere from macro-economic to technological trends. Let’s explore a few:
1 — The Quest for a New runtime
After mobile computing, the big software incumbents have embarked on a frantic race to discover and dominate a new runtime platform. Runtime can create empires. Google was the undisputed king of the web runtime while mobile brought Apple back from the ashes to become the most valuable company in the world. Understandably, the software incumbents are trying to be at the forefront of the creation of new runtimes.
The fascinating thing about this market is that there might be not one but many runtimes to follow mobile as the main technology ecosystem in the market. Voice assistants, messaging, virtual reality and vehicle consoles are the four leading trends in the market that might evolve in the next big runtime. As a result, software incumbents are trying to become relevant in as many markets as possible.
2 — The Wave Catching Game
From a macro-economic standpoint, technology typically evolves in waves. The fascinating thing is that many of the biggest waves or technology trends have been product of previous waves. For instances, the social network market was only possible because the web was well-established. Similarly, augmented reality can be seen as a side evolution of mobile computing. Consequently, missing one technology wave can result of missing several future trends that are produced by that wave.
Understanding wave-nature of technology trends, software incumbents are trying to remain competitive in many technology trends because, even if they don’t get to dominate that trend it might put them in position to catch the next wave that evolves from that trend. We can argue that Microsoft’s leadership in the virtual reality space was a consequence of the Redmond giant resiliency to stay as a neglect able number three player in the mobile OS market.
3 — Hot Stocks Help
Technology incumbent stocks have been trading at an all time high and with that comes healthy balance sheets. As a result, big software companies have the resources to invest in research in new technology areas and attract world class talent. Additionally, the valuable stocks are rich balance sheets together with the crazy competitive market have created a uniquely fertile ecosystem for M&A. The M&A frenzy in areas such as artificial intelligence or self-driving vehicles offer incumbents a relatively cheap vehicle to take a position in new tech markets while also removing innovative startups from the competitive landscape.
There are other factors contributing to the Everything Platform trend but the aforementioned ones are playing a key role in the increasing dominance of the big software incumbents across several new tech markets.