The scale of tech winners | Hacker News Reader

The scale of tech winners

ben-evans.com

111 pointsmercutio262 comments

>”There probably won’t be a technology that has 10x greater scale than smartphones, as mobile was 10x bigger than PCs and PCs were bigger than mainframes, simply because 5bn people will have smartphones and that’s all the (adult) people.”

Well written. Although I’d argue that IoT + AI will be 10x bigger (and more). Yes, there are finitite humans, but for every human we could have hundreds, even thousands, of devices. At some point those won’t be consumer devices, they’ll mostly be D2D. We’ll be analyzing the macro market and building new devices that can partake in this new market and we may not always understand the emergent behavior. At some point we’ll start evolving these devices so that they’re as individual as you or I, even with the same hardware. For the first 10,000 years technology was an incredible uphill climb, we’re now hitting an inflection point where it’s fast ice all the way down.

10x bigger than 5B people?

Could be. We are counting smartphones for 5B people a bit loosely in terms of how they're used. A sizeable number are cheap Android devices or iPhones that are five generations old. Many people don't treat their smartphone similar to how you might expect a lot of young people in a metro area.

If you get a bit loose with IoT and automation and AI, a multiplier of 5B could be possible.

There will be material supply limits at some point in all this scaling.

Not to mention population limits...

True, but (the mass of all human created objects)/(mass of the solid bits in the solar system) is still very small.

Eventually ... sure

But mankind already makes far more stuff than there are people .. so this "limit" is a long long ways off

I'm not sure about those being 10x bigger in terms of pure numbers. But it's possible. Some multiplier when compared to smartphones is def possible. There's a chance something with IoT or AI will happen or come out in a decade or two that will be so obvious and so ubiquitous and not limited to just one persons use or only one is wanted per person.

Like I said in another child comment, smartphones for 5B people is already playing a bit loose with the device usage. A decent number of phones out already are cheap or old Androids or iPhones that are five generations old. A number of those people don't use their smartphone as many readers on HN might use theirs.

So thinking that way with some future advances with IoT, automation, and/or AI, there could be something that comes out and is wanted in mass numbers, more than one per person.

But really. Who knows :p

I think you could say the same about whatever numbers they were using for laptops a decade ago, or PC's 15 years ago. The market is never realistically represented by the estimates.

I guess I meant I doubt the way certain big segments of the population using their phones changes a lot in the future. It feels like a sizable portion will still use their phones in a very basic fashion like I was describing.

10 things per person is 10x bigger.

Hm...what if someone had a removable eink tattoo to sell you? But nah, you could argue that the app market is already way more than 10 per device.

Is 10x the revenue considered 10x bigger?

If so, I see driverless vehicles (or the driverless vehicle's OS) as an obvious 10x market.

Yeah, that could do it.

Further reading: https://en.wikipedia.org/wiki/Trucks_(short_story)

Im thinking the next big thing like the smartphone will be a shift towards what we see in this Magic Leap video https://www.youtube.com/watch?v=GmdXJy_IdNw yet you don't have to wear a headset to experience/interact with it.

Also mix in digital voice assistants, which voice assistants should now be showing me things on all my screens and the walls around me. LIke Alexa show the traffic or weather and boom it appears on the walls around you (an idea i was working on but its too big of an idea with a small team & no money).

10x vs smartphones seems plausible: smart cars, smart speakers, smart lights, smart thermostats, smart watches, other wearables ....

What does "D2D" mean? The devices are buying other devices? Who will pay for all this, and why?

A device itself can mine the payment to use :) In the future of IoT + AI there is no really need for "who" (ie. humans).

I have several e-readers (what can I say). So it's entirely believable there will be another 10x technology, because people will have many instances of it.

Androids will be much larger than mobile phones.

We will colonize planets with them.

All of this change is evolution.

Mankind is making machine in our own image.

>Androids will be much larger than mobile phones

My brain froze for a minute getting ready to argue that Android tablets aren't that different from Android smartphones .. then saw you were talking about robotics

I don't know if it's IoT, but in the US we have more cars than driving age adults, so it's not far fetched for there to be something already out there that outnumbers humans in some meaningful way.

>something already out there that outnumbers humans in some meaningful way

Like LEGO minifigures? https://www.quora.com/How-many-LEGO-people-minifigs-are-ther...

Each generation of computer technology changes the metric by which people define "bigger". In the mainframe/minicomputer era it was performance, the number of gates you could fit into a box (and eventually, a chip). In the microcomputer era, it was volume, the number of computers sold. In the Internet/mobile era, it was engagement, the amount of time people spent on their devices.

It's reasonable to believe that the next era will define a new metric. I have no idea what that is, but it's reasonable to believe it won't be limited by the number of humans on earth. There's still the metric of how many devices a person uses which have a computer in them, after all.

I'm not too convinced by the relevance of these groupings (GAFA vs Wintel). For one, Intel is a hardware company. And Microsoft seems to do well in a lot of key areas.

Also, isn't Oracle on the same scale as the other that are mentioned?

Apple is also mostly a hardware company.

All four of them build hardware, to one degree or another and apple designs it’s own chipsets.

Apple is almost entirely a hardware company, revenue-wise. Microsoft is almost entirely a software company. Amazon is a retail (revenue-wise) and IaaS (profit-wise) company. Facebook and Google are advertising companies.

Apple has been aiming for 20% of their revenue to be services. Though really they are mostly tied to their hardware. Much like Microsoft hardware, Surface, which is doing better than I was expecting, is there for their software like you state. And Google's successful ventures like Android and Chrome are there for keeping their data and advertising going.

Even if they achieve that, they are still a hardware company, because those services are linked to the vendor lockin they've spent years cultivating. Nobody would use any of their services without the hardware, so they will always be a hardware company in the end.

Yeah for sure.

You could argue that Apple's software, or more specifically its design and user interface, is what really launched it out of the park. Online-connected keyboard phones did exist when the iPhone came out.

So they make their money selling hardware, but who would buy that hardware if it weren't for the ecosystem? Their software is pretty shite now - major OSX upgrades have the stability of old Windows ones nowadays - but they still take their users' privacy and security seriously, and they have platform lock-in. Their hardware still isn't what REALLY makes them money.

Apple is a media company that happens to sell phones, tablets, laptops, smart watches, and desktop computers

The dude has interesting thoughts but hates MS and loves Apple to the point of blindness.

Oracle should have been mentioned. Author certainly seems to have a bias. Can't say he was trying to look at consumer facing companies since Intel never was really that way close to as much as the other five. Oracle probably should've been included.

Also, why ignore the Chinese tech giants?

I'm curious if it's due to a) American-Anglo-Euro centric world view or b) Chinese tech giants are arms of the State, as such hard to compare since they are financed by an authoritarian government.

I agree. Comparing 4 to 2 survivors to 1 survivor isn't a great comparison. I still think the end conclusion is valid though. As computation and connectivity take a bigger place in the economy, the value of the winners grows.

"Wintel" was more-or-less the only game in town for 15-20 years

And IBM has been around a long time ... it's just they're no longer the only game in town (though I'm a little surprises HP/HPE/MicroFocus/DXC wasn't in there)

I'm glad others picked up the lack of Oracle here. I am guessing by 'leading' the writer means leading household brands in the tech industry.

Also shouldn't Sun have been included, even at the height of Wintel Sun must have made some sort of financial impact, with Sparc servers and J2EE

"three times the revenue of Microsoft and Intel combined"

I would think profits are a more reasonable metric for the overall comparison. Amazon alone has a huge disparity between revenue and profits.

Depends what you're measuring. Shareholders (ultimately) care about profits, but if you're a pundit trying to predict the impact of technology on human populations (as Ben Evans ultimately is, though he works for a shareholder), revenues is a more relevant metric. It shows "how many dollars flow through a company", rather than "how many dollars does the company get to keep"; the former is a metric for how much impact the company has, while the latter is a metric for how efficiently it generates that impact.

Exactly. To dive one more dimension in, if a company is extremely profitable, that is typically a sign that the company doesn't know how to deploy their capital towards growth. High profits are often a sign of stagnation in a corporation.

Not to mention it's absurd to include Amazon's $100 billion in retail business in the calculation.

How do Dell and HP (among others) get left out of Wintel? As others have noted, it's an article stacked to fake a point.

And why are they comparing a Microsoft-Intel partnership against GAFA, which is the exact opposite of a partnership.

It should be some combination of: Microsoft, Oracle, Intel, Sun Microsystems, Apple, HP, Dell from the year 2000.

IMHO, "Value added" is the best (but far from perfect) way to compare the real size/power of different companies in different markets.

Looks like more people are supporting this argument in the media.

https://techcrunch.com/2017/10/22/ask-not-for-whom-the-deadp...

It's not really a fair comparison. Apple is the only one that compares to wintel. Amazon should be compared to Walmart, Google and Facebook to media companies like TimeWarner. Perhaps Gafa is not 10x bigger than wintel + tw + Walmart

Amazon competes with Walmart for selling crap

But they're also a hardware company (Kindle, Fire, etc)

And a media company (Prime Video, etc)

And a logistics company

And a *aaS company

>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

Why is the presumption that the next technology is limited by the number of humans? I buy food nearly every day so the multiplicative factor is 300x myself in that regard.

A technology that significantly changes everything can easily move the entire economy to the point where everything depends on it and everyone is buying it every day (think electricity).

Is this adjusted for inflation? It warps the data quite a bit if it isn't.

Did you look at the graph?

"Annual revenue ($bn, real)"

The article is about companies. But for startup employees, I've always thought of baseball:

  foul       layoff.
  strike     getting fired.
  strikeout  your at bat, for whatever reason, is over.

  single     AKA a job.
  double     a well paying, secure, somewhat prestigious job
             with a decent stock option payout, a house.
  triple     early employee and financial security.
  home run   8+ figures after taxes.
  grand slam billionaire unicorn founder, successful exit.

"The division of labor is limited by the extent of the market"

I think this can mostly be expected due to the size of the markets these companies are playing in— it’s much easier to build a truly global business than in the past— as well as the increasing size of the economy in general. Just due to a power law distribution, the big winners are all going to be bigger than ever. The largest should be twice as large as the second largest, and three times as large as the third largest and so on.

Isn't Apple a big tech company of the past even though they are quite successful at this time?

Meanwhile the number of homeless grow.

It's like two separate worlds.

Relevancy to OP?

What do you think happens to people due to gentrification brought on by these companies?

Gentrification didn't cause the vast expansion of homelessness in the 1970s and it didn't cause it in the last decade either. They were both caused by the same things.

1) a terrible healthcare system that neglects mental health problems and 2) zero income growth for 40 years due to massive dollar debasement over that time, which has eaten the poor alive (the rich can hedge a 80% decline in the value of the dollar since 1970, the poor cannot). The great recession - courtesy of the Fed's intentional asset bubble party - and the Bush dollar debasement (war, out of control spending & deficits), gave us the increase in poverty since 2006.

You mean the gentrification brought on by restrictive municipal zoning laws?

Palo Alto has 67,000 people. Mountain View has 78,000. Sunnyvale has 150,000. San Francisco has 860,000 and San Jose is over a million.

These companies are barely big enough to nudge the median income at all. Housing prices are being bid up, but it's not by residents.

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