How did Big Tech companies achieve dominance?

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First of all, lets explain what exactly is Big Tech, otherwise known as Big five, Big Four or Tech Giants. It consists of Amazon, Google (or Alphabet), Meta, Apple and Microsoft. They are the leading, “dominant players in their respective areas of technology: artificial intelligence, e-commerce, online advertising, consumer electronics, cloud computing, computer software, media streaming, smart home, self-driving cars, and social networking. They are among the most valuable public companies globally, each having had a maximum market capitalization ranging from around $1 trillion to above $3 trillion. They are also considered among the most prestigious employers in the world, especially Google.” (Wikipedia, “Big Tech”).  But how did they achieve the dominance? What made them the giants they are today?

These companies were the forerunners in the industries they are currently prominent in. By adapting to the clients’ expectations, challenges created by the market they are operating on and constantly developing their technologies, they were able to take over. Extremely important factor was the fact that they focused not only on the technological development, but also took care of the industrial challenges and met clients expectations.

In case of Amazon developing by entering new markets and manufacturing new types of products proved to be very effective. According to the Congressional report (2020) “Amazon has a monopoly over merchants that sell their products through their services, mostly because they don’t have a viable alternative. Meanwhile Amazon has an incentive to use data from competing merchants to the advantage to its own goods and services.” This gives them the opportunity and advantage to effectively develop their own product range as well as control the market.

Apple on the other hand has a full control over which apps they allow their consumers to download on their devices. But what exactly does that mean? That means that software developers are 100% dependent on the companies’ decision. That makes them prone to overcharging. Furthermore, it gives Apple an inside on what services and apps are in the highest demand and create a competition.

Google is constantly squashing the competitors in order to achieve the dominance. According to the Reuters report they are demanding from their partners to put the Google search engine in the front and center on mobile devices. They also came up with various ways to generate revenue. “One of the primary ways Alphabet generates revenue through advertising is through its Google Ads program. Whenever a user searches for anything using Google’s search engine, an algorithm generates a list of search results. The algorithm attempts to provide the most relevant search result for the query as well as related suggested pages from a Google Ads advertiser.” (Investopedia, “How Google (Alphabet) Makes Money”). “With the ad piece in place to complement search, Google began to innovate in earnest. Some moves were obvious, such as Google publishing and acquiring digital assets that would deliver more ad-driven revenue as traffic grew and more ad space as content increased. These included YouTube (acquired 2006), Google Maps (2005), Google Blogger (2003), and Google Finance (2006).” (Investopedia, “Becoming a Digital Powerhouse”).

Founders of Facebook aimed for the total dominance from the early begging. “Within the first eight years, Facebook would hold one of the biggest initial public offerings in Internet history and hit a peak market capitalization of over $104 billion. And within 10 years, Facebook would announce it had 1.228 billion monthly active users across the globe. It’s now got 2.3 billion.”( “10 reasons why Facebook has been so successful” Maggie Tillman, 26 March 2021). They are constantly monitoring the competition and creating solutions which give them significant advantage. For instance, they have successfully overtook WhatsApp and Instagram and finally bought them out, as they considered them a threat to their long-term plans (Instagram for $1 billion in 2012 and WhatsApp in February 2014 for $19 billion).

Finally, Microsoft – they were extremally financially cautious very early on. Bill Gates – founder of the company made a plan to collect enough savings to get them through a whole year without any revenue. Another very important factor of their success is also the range of products, services and the amount of markets they  are operating on. The list is very long: from software: Azure, GitHub, Jscript, Microsoft BASIC, Microsoft Small Basic, Microsoft XNA, Silverlight, TypeScript, VBScript Microsoft Access, Microsoft Excel, Microsoft Lens, Microsoft OneNote, Microsoft Outlook, Microsoft PowerPoint, Microsoft Project, Microsoft Publisher, Skype for Business, Microsoft Sway; to hardware which consists of: computer hardware, gaming hardware and mobile hardware. They have also bought LinkedIn and Skype and  have a complete monopoly on PC operating systems. They were even sued by a competitor company – Netscape in 2002, “who has filed an antitrust lawsuit on the same grounds that were stated by the US Department of Justice during their investigations during the 1990s. Netscape alleged that Microsoft had abused its monopoly by forcing Windows users to use the inbuilt browser as opposed to other offerings including Navigator.”(“ Netscape vs Microsoft Antitrust Lawsuit, 2002”, lawteacher.net, 7th Aug 2019). Eventually Microsoft managed to exterminate Netscape and make their services obsolete.

As we can see, there is a visible pattern in the policy and work of these companies. Like it was said in the iconic movie “The wolf of Wall Street” “Supply and demand my friend”.  Big Tech companies have chosen the direction of their development early on, but they remembered to constantly adjust to the challenges and that granted them the monopoly in their respective fields.

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