“The Only Group That Can Categorize Everything Is Everybody” – Clay Shirky
Month: December 2022
Is there such a thing as a technology company?
I keep reading about the dangers of big tech. As is so often the case when I read about the dangers of some social hazard or other, I get stuck on the dangers of questionable lexicography.
Like, for example, the poorly defined “big tech.”
The view from here is that, a tech company is a company that makes its money by selling technology. My logic: If a company simply makes its living using technology internally, every company of any size in the world would be classified as a tech company.
So here’s a list of what are popularly thought of as tech companies:
1. Amazon: A chunk of Amazon is, unquestioningly, a tech company. Maybe 5% of it. That’s AWS’s contribution to its revenue. From a where-does-its-money-come-from perspective, though, Amazon is more retailer, third-party-logistics provider, publisher, and ad agency than it is a tech company.
2. Apple: According to some metrics Apple is the world’s biggest of the big. Certainly, I won’t quibble that it’s pretty sizeable.
My question is whether it’s a tech company. No, let me take that back, because it shoves me into the trap I’m trying to avoid. Apple is, by revenue, about 80% tech company. The rest of it is, more or less, in the entertainment business.
Also, interestingly enough from internal IT’s perspective, Apple just isn’t that important. As a technology company, Apple mostly sells to consumers, which means for IT it matters as a platform for consumer-facing mobile apps and for BYOD use. And for consumer-facing mobile apps, much of its platform-ness is directed at app curation, which isn’t really a tech function at all.
3. Alphabet: This, Google’s parent company, is the poster child for bad categorization. Yes, it’s a cloud technology provider. That generates maybe a tenth of its total revenues. It’s mostly a media company that makes its money selling access to and information about its users to advertisers.
4. Microsoft: Yep. It’s a tech company.
5. Samsung: Okay, I’ll buy classifying Samsung as a tech company. Not a U.S.-based tech company, which complicates the public-policy we-have-to-reign-in-big-tech debate, but a tech company nonetheless.
6. Meta Platforms: This, the home of Facebook, Instagram, WhatsApp, and Messenger, might look like a tech company, but it isn’t. It makes its living selling access to and information about users of these platforms to advertisers. That makes it a media company, just like your average daily newspaper, cable channel, and Google.
7. Cisco: Another tech company. It makes its money selling its tech. No quibbles or questions about it.
8. Oracle: Like Microsoft and Cisco it makes its money selling its technology to companies that need it.
9. Broadcom: Another tech provider.
10. SAP: And one more.
That’s enough, I think. What to me is most interesting about this breakdown, quick and dirty as it is, is that whenever you read about the need to “reign in big tech” (which discussions often also include other no-they-aren’t-tech-companies like Twitter and Uber), few of the companies that need reigning in are tech companies. For those that are supposed to need reigning in, the need is based on the non-tech-company parts of their business and how they do business.
No actual tech companies seem to need reigning in.
Bob’s last word: When the subject is persuasion, the golden rule is to sell the problem, not the solution. Consider the above an object lesson: The solution we’re being sold is “reign in big tech.” The problem we’re being sold that this is supposed to solve
has little or nothing to do with companies that actually are in the technology business.
Which leads to a piece of actual professional advice, namely, whenever you’re asked to evaluate a business proposal of any kind, begin your analysis by making sure the proposal clearly states the problem (or opportunity) it purports to solve.
If it starts with a solution, toss it.