The tech industry today is like the banking industry of the 1980s. It’s the richest sector in the world and is altering the way we conduct our lives before our eyes.
The size of the global IT services market, for instance, is due to reach $704bn this year and $748bn in 2020, up by over $100bn since 2014.
And according to HSRC’s Global Industry 4.0 Market & Technologies 2018-2023 report, the Industry 4.0 market will reach $214B by 2023.
Four big firms dominate most discussion about the tech sector today: Alphabet (Google’s parent), Amazon, Apple and Facebook. (In his book ‘The Four’, business professor Scott Galloway provides an entertaining overview of these companies’ DNA, successes, strategies, and potential.)
But business is constantly changing. Being a giant today is no guarantee of strength tomorrow. And new giants continue to emerge. So if we were to predict a fifth firm rising to these ranks on the global stage, who might it be?
While there are lots of possible candidates right now, including the likes of Salesforce and Tesla, we’ve looked at three that are often highlighted as global giants of the future.
Alibaba is the Asian e-commerce giant. Or rather, the world’s e-commerce giant, as it has more transactions than Amazon and eBay combined.
Alibaba’s core business is connecting customers and merchants to buy and sell goods, but its partnerships and investments in seven research labs has put it on the road to building a $1 trillion AI industry by 2030.
It also has one of the key features seen amongst tech giants over the years: a visionary leader.
Jack Ma is a philanthropist and investor, and has a brilliant business mind which has set him up to be seen as a global ambassador for Chinese business.
The company’s success since Ma set it up 20 years ago is nothing short of astonishing. It’s now ranked as the ninth most valuable brand in the world.
Looking ahead, one of Alibaba’s challenges might be maintaining its remarkable size. The sheer number of sellers on its platform, for example, is creating a logistical issue with some merchants struggling to compete. And its expansion into areas like cloud services and entertainment are bringing it up against stiff competition from rivals like Amazon and Tencent.
Uber launched in 2009 and within just nine years the ride sharing app has grown far beyond its main taxi service, expanding its features to bikes, delivering food, providing shipping, and even a (work-in-progress) flying vehicle.
The aim is to transform the way we view transport, and it’s working.
Uber has acquired a global status with a presence in over 50 countries by using an on-demand pricing strategy to boost supply at peak times.
But the future of its service is likely to be autonomous and multi-modal (ie including bikes and scooters, not just cars). This will bring it into competition with Apple and Google’s own nascent autonomous transport offerings, as well as with Amazon’s logistics service.
Another major challenge for Uber is government intervention. As the law attempts to modernise to regulate the digital world, companies like Uber are likely to have more rules and regulations to comply with.
Tencent was founded in 1998 by Ma Huateng, making it one of the oldest internet companies in China, and it has since grown to be is one of the biggest online service hubs in China.
It is a multinational investment holding conglomerate, having acquired some of the world’s largest social media companies, VC firms, smartphones, payment services and gaming services, just to name a few.
In 2017 it became the first Asian tech company to cross the $500bn valuation mark, strongly positioning itself as Asia’s leading company, even if many in the West don’t recognise it by name.
Perhaps Tencent’s most popular service is the messaging app WeChat, which is viewed as a serious rival to Facebook and Twitter.
In Chinese tech circles Tencent is seen as a mature player, with R&D levels lower than the fastest growing players in the industry (although above the industry average). Maintaining its remarkable growth and breaking into markets outside Asia are the next challenges.
Today’s big four tech giants all have similar characteristics – they all have a track record of genuine innovation, they compete in multiple product areas, and they’re run by visionary leaders.
Only time will tell which company will crack the formula to become the next tech giant.
Will it be one of the three firms we’ve looked at, or someone else? Who’s your money on?