*Yes, they're very big and can do a lot of weird stuff. They can also, almost accidentally, prevent a lot of stuff from happening. Moore's Law, for instance.
I enjoy listening to him, maybe most when I don't agree
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Scale means these companies can do a lot more. They can make smart speakers and watches and VR and glasses, they can commission their own microchips, and they can think about upending the $1.2tr car industry. They can pay more than many established players for content - in the past, tech companies always talked about buying premium TV shows but didn’t actually have the cash, but now it’s part of the marketing budget. Some of these things are a lot cheaper to do than in the past (smart speakers, for example, are just commodity smartphone components), but not all of them are, and the ability to do so many large experimental projects, as side-projects, without betting the company, is a consequence of this scale, and headcount.
On the other hand, that the market is big enough for four tech giants, not just one (Wintel) partnership, means we have four companies aggressively competing and cooperating with each other, and driving each other on, and each trying somehow to commoditise the others’ businesses. None of them quite pose a threat to the others’ core - Apple won’t do better search than Google and Amazon won’t do better operating systems than Apple. But the adjacencies and the new endpoints that they create do overlap, even if these companies get to them from different directions, and as consumers we all benefit. If I want a smart speaker, I can choose from two with huge, credible platforms behind them today, and probably four in six months, each making them for different reasons with different philosophies. No-one applied that kind of pressure to Microsoft.
How do the mice do when there are four elephants fighting it out? As we saw with first GoPro and now perhaps Sonos, if you’re riding the smartphone supply chain cornucopia but can’t construct a story further up the stack, around cloud, software, ecosystem or network effects, you’re just another commodity widget maker. And the aggressive competition in advertising products from Google, Facebook and now to some extent Amazon has taken a lot of the oxygen away from anyone else.
Looking beyond the scale and the network effects, though, there’s a difference in character. Google, Facebook and Amazon are still controlled by their founders, and they’re aggressive street fighters. All of these companies have the benefit of twenty years more history - they saw what happened to Microsoft, and Yahoo, and AOL, and MySpace. So, they will disrupt themselves, and they will act. The shift to mobile was a fundamental structural threat that unbundled Facebook - the founder spent over 10% of the company to buy the most successful unbundlers and, as importantly, didn’t smother them after he’d bought them, unlike most large acquirers of disruptive companies. Just as index funds don’t work if everyone’s an index fund, you could propose that ‘Disruption’ doesn’t work if everyone’s read the book, and everyone has....
