J.R.R. Tolkien’s The Fellowship of the Ring has a brilliant quote about the Ruling Ring that controls the 19 rings of Elves, Dwarves, and Men…
“One Ring to rule them all,
One Ring to find them,
One Ring to bring them all
and in the darkness bind them.”
Big Tech is the Ruling Ring of the global economy, becoming more and more indispensable in each and every industry with each and every passing day. Digitization or digitalization or digital transformation is heading toward cent percent, especially in the aftermath of the technological acceleration (techceleration) unleashed by the pandemic. Before tech helped a great deal, but today without it your business is as good as dead.
There was a long era of the oil giants. Standard Oil was so large that it was split up. The pieces themselves started throwing their weight around. The seven major oil companies, called the Seven Sisters, dominated the 20th century. In this century, the first company to touch a market capitalization of $1 trillion was PetroChina. But that was the past. Today all the companies in that club are tech companies: Apple, Alphabet, Amazon, Microsoft, Meta, and Elon Musk’s Tesla (A3M3).
Tech will play a bigger and bigger role going forward in breakthroughs related to new energy sources like hydrogen (which still has to be fine-tuned a lot) and fusion (which will be the biggest game changer once it comes).
The reasons that the tech companies are dominating are varied. Oil and diesel-run mechanical devices and served the internal combustion engine well for such a long time. Now the energy industry is going smart and high-tech. Batteries are getting smaller and smaller. Soon they will be able to run a lot of things that legacy fossil fuels were used to. Every device will be smart and run on the power that need not come from fossil fuels.
The Tesla Megapack is for battery storage power stations and the Tesla Powerwall is a home energy storage unit. Gen IV nuclear reactors are more efficient, cost-effective, and safer. Tech has fine-tuned them while some can even eat their own waste. Tech mogul Bill Gates is a heavy backer of this new field. Tech will play a bigger and bigger role going forward in breakthroughs related to new energy sources like hydrogen (which still has to be fine-tuned a lot) and fusion (which will be the biggest game-changer once it comes).
This and Big Oil had a tight embrace in the last century. Both are falling apart. Going forward every car will be smart and connected. The operating system will be given by Big Tech, and they can well take over the whole industry. An example of this is the Apple Car where Tim Cook is looking at options to tie up with outsourced manufacturing units to bypass Big Auto altogether. Auto-tech deals are the order of the day, and it is only a matter of time before the apprentice becomes the master.
In 2020, Tesla beat Toyota to emerge as the most valuable automaker in the world. If people thought that was a flash in the pan, then it charged forward first past the $500 billion mark and then a trillion. Ford and General Motors in contrast crashed below the $100 billion mark. Ford invented the assembly line for cars and General Motors once had a turnover at par with the Union Budget of India (or so my teacher in school used to tell me). An unheard-of company called Rivian, a Tesla rival which had sold just a handful of vehicles, got a higher valuation than either Ford or GM (which together have sold hundreds of millions of cars in their entire history).
The real game-changer will be autonomous vehicles. The driver car has a limited form factor, has to be forward-looking (the reverse function is minimal), and has been the same for a century. Once you remove the driver you don’t need his seat or any seat and also no particular direction for the car to be aligned to. You can have a box or room of any size that can go in any direction. This can be used for transportation, business, pleasure, tourism, or long road trips. You can put in seats, beds, conference rooms, compartments, mini houses, and whatever you can imagine. Big Auto can’t compete with that.
If you look at the Fortune 500 companies list (which looks at annual turnover) down the ages then apart from Big Oil and Big Auto, it is Big Retail which dominated. Particularly Walmart, which just claimed the No. 1 position for eight straight years. Since 1995, that’s 16 times. But in valuation and future prospects, it’s totally Big Tech and they are catching up on the revenue front too. There are two main reasons why eCommerce is the future.
The first one you saw during the pandemic. How easy it is to have every single thing under the sun to your doorstep. Ecommerce giants are looking to take over the entire supply chain and transportation business. Amazon Air has close to 100 planes. Their fulfillment centers have about 125,000 employees. They are looking to have a fleet of 100,000 electric vehicles by the end of this decade. Autonomous vehicles of all sizes will take care of transportation and delivery. Amazon Robotics will handle automation and Prime Air a drone delivery network. Ecommerce giants aim to deliver every product to every citizen device by every delivery method.
The second is Big Data. Ecommerce giants have a tremendous amount of consumer data which they are crunching to achieve world domination. They can anticipate global and national buying trends, beat everyone to it, deliver in whatever way they want, and anticipate the individual needs of fringe customers to ensure complete penetration and last-mile delivery. The Customer Experience (CX) they can offer is unparalleled in the history of consumerism.
Hollywood and Bollywood ruled the box office and the culture wars of the past. The film stars ended up being the most popular celebrities on Earth. In India sometimes movies would come to the TV years after they had been released in the halls. The 2010s saw a record low ticket sales for individual movies as compared to the 1990s despite a population rise. But they made much more money thanks to high multiplex ticket rates, add-on 3D fees, and criminal prices of popcorn and cola. One US film critic commented that it was the popcorn that saved Hollywood and not the blockbuster.
All that has crashed in the pandemic era. Things may not return fully back to normal ever again. Big Tech got a back entry into cinema via special effects and computer animation. Initially a novelty, now if you look at the Top 100 all-time global grosses you will struggle to find even a handful of movies that don’t rely on CGI. With deep fakes getting better and better, even the Hollywood star will no longer be required. (The superstar died a long ago and it’s main tech and ensemble casts)
The biggest game-changer here has been streaming. There are already 4 players who have more than 100 million paid subscribers: Netflix, Prime Video, Disney+, and Hulu. Add the dozens of players all over the world who have tens of millions of subscribers and you’ll see how widespread it has become. Movie releases have to come either simultaneously or within weeks to stay relevant. If you combine movie halls, TV, and streaming then in terms of video watching they are no match to YouTube which has 2 billion subscribers worldwide.
This is one area that stayed clear of technology. Some of the global educational institutes have remained the same for centuries with the same buildings and same traditions. It was the most technology-resistant industry. But it too has come crashing down. The national US student loan amount is $1.5 trillion which shows how unsustainable it is.
Virtual education can hire the best of experts and get them to teach thousands of students at once with an online tracking and monitoring system. It can bring education costs down and cater to the remotest of areas. Newer and more relevant courses can be added in real-time and syllabi updated at record speed.
In today’s fast-changing age, skills seem to be more important than degrees. Companies may choose a professional with a dozen relevant online courses showcasing the right skills rather than a couple of outdated Ivy League degrees. Of course, this applies more to the college and professional course world rather than schools.
This has also seen a fundamental shift. Virtual events have become highly popular along with Zoom calls. We have found that everything can be done online: pop concerts, political and business events, and all manner of workshops. People are dying to get back to offline events which will resume probably this year, but the future looks to be dominated by Hybrid Events with us going totally virtual in case of a crisis.
Big Media probably ruled till the 1990s, but started losing it with the advent of the Internet in the 1990s. The then US President-Monica Lewinsky scandal fell into the lap of mainstream media but as they dilly-dallied, the website Drudge Report carried it and became a household sensation in the US. Drudge Report recently achieved the landmark of one billion page views a month, despite the website having an editorial staff strength of exactly one. His assistant Andrew Breitbart arguably became the most influential media personality of the US Right, co-founding HuffPost and launching Breitbart News.
Big Media’s two biggest losses in the Internet era were power and revenue. They could not monetize the ad revenue the way they did print and TV and then they totally lost control of the distribution network. The number of paid subscribers is also non-existent when you look at global media as a whole. Online they succumbed to clickbait journalism, a media art form that was perfected by Buzzfeed, which was founded in 2006. The media revenue slowly started trickling to Silicon Valley before it became a gushing river. Most of the money goes to the likes of Alphabet and Meta.
When it comes to power, they totally lost it in the Social Media age in the 2010s. There was a time when going against the media meant certain political death. Narendra Modi, Brexit, and Donald Trump were abhorred by the mainstream media and such a campaign was launched against them as never seen before and yet they won quite easily. But here’s another question. Does the mainstream media even exist anymore? Let’s take a look at the US media and who either owns them or has the biggest stake…
Washington Post—Jeff Bezos (Amazon). Time—Marc & Lynne Benioff (Salesforce). The Atlantic—Laurene Powell Jobs (Steve Jobs’ widow). The MS in MSNBC stands for Microsoft, though they withdrew. Huffington Post was acquired by AOL. There are many such examples with VCs having multiple stakes in media outlets.
Education was the most technology-resistant industry. But it too has come crashing down. The national US student loan amount is $1.5 trillion which shows how unsustainable it is.
First, the person with the most soldiers won the war. Then came strategy. Alexander and Julius Caesar dominated that era. Then it was the Navy. That is how the British Empire was built. What followed was the Air Force and for a brief moment, it looked like the Nazis would take over during the war. Then it was the missiles.
Now two things have happened. For one, the defense forces are getting more and more dependent on technology. It’s not just about size anymore. Every aspect of weaponry is becoming smart. The second is the power of hacking which can cripple industries. In the future, all wars may play out in cyberspace.
The government is becoming more and more reliant on tech to do anything. Making and maintaining databases. Carrying out orders. Conducting schemes of all kinds. The best example is China which has already become a dystopian techno state. Is this the future for all the countries of the world?
Maybe we should stop calling it Big Tech. It is “Really Big Tech”. Or Grand Tech. Or Hyper Tech. Or Mega-Tech. Will the metaverse eat up all the industries?
Or Meta Tech? Is the metaverse coming? Will we all live in the metaverse? Will we sleep all our lives and live in a Matrix-like world? Or will there be devices all over the world that will create holograms to create an augmented-mixed reality all over Earth? Or will we merge with technology and become a Singularity? Either way, technology seems to be our final destination.
By Sunil Rajguru