Disruptions, downturns, and recessions make the weak weaker and the strong stronger. It was true centuries ago, and it is true today.
The 2001 downturn turned telecom and cable giants into the Internet’s gatekeepers. Microsoft emerged victorious with its Internet Explorer. During the 2008 financial crisis, when cash was king, the big banks — JP Morgan Chase, for example — became more prominent and more pervasive. In a similar fashion, the present pandemic is making big tech bigger. And it is not just that their coffers are overflowing coffers. They suddenly have a much larger and more receptive audience.....MUCH MORE
Last week, we saw the mid-pandemic report record results for Amazon, Apple, Microsoft, Google, and Facebook. Spoiler alert: they’re not exactly suffering. Microsoft saw its revenues go up to $35 billion for the quarter, compared to $30.5 billion for the same quarter in 2019. Amazon’s revenues came in over $75 billion. Even with a shutdown, Apple reported earnings of $58 billion. You get the drift.
Even with worsening economic conditions over the next year or so, these companies are likely to come out big winners. Though, the upshot is not just that a handful of companies will become a more significant presence in our lives. This will be true of technology in general. Sure, there might be some companies — AirBnB, for example —that suffer in the near term. The startup ecosystem might contract. But overall, this is a big moment for technology, and it’s only going to get bigger.
If you live long enough, you experience enough downturns to develop at least one of two things: mental resilience or post-traumatic stress disorder. I now need at least two hands to count on my fingers the number of downturns I have experienced. These experiences have largely supported my blind faith in the power of the network and the inevitability of technology. This time around is no different.
Over the past few months, we have experienced the mainstreaming of technology-enabled behavior previously thought of as being on the fringe. Shopping for groceries online and having them delivered, for example, was something of coastal luxury. Now, it has been experienced and used by millions across the country. Instacart has boasted of hiring another 250,000 shoppers. Amazon is hiring an additional 175,000 delivery people. Food-on-demand services are going through a boom like none other — Doordash saw its revenues jump over 20% in March. Uber Eats is saving Uber’s bacon. There is no reason to expect these new behaviors to change....