Wednesday, November 23, 2011

Mobile/Digital and the creation and destruction of value in the technology market

Sitting in a presentation by a team from Qatalyst earlier this week I was struck by the extraordinary creation and destruction of value technology has seen over the last 7 years.

A "duh" moment - of course each company's ability to understand a strategic sea change that's happening, and react to it, determines their fate - but the last few years give an extraordinary example of billions of dollars of shift in a very short time frame.

The strategic shift is the move to mobile and digital content; the creation and destruction of market cap is dramatic.

When Google went public in 2004 Apple was worth $12B and Amazon was worth $16B -- today they are worth $361B and $103B.

Apple drove the shift to the smart phone and pioneered the market place for digital content. Amazon understood the power of digital content and understood the immense power of the cloud first.

Likewise Qualcomm and ARM are at the heart of the mobile device and they have benefited from the shift from "Wintel" to the new world order of "ARM/Qualcomm/Apple/Android" - both more than doubling in value.

In contrast companies in the old school of the PC and old phones have been flat to crushed. Microsoft is worth 25% less, Nokia is worth half and Dell has dropped by 70%.

Sure, companies have large swings in value based on changes in the market, but it is fascinating to see the value shift so explicitly, in such a short period of time, and so much a part of the world I live in. I live (through FirstRain) in the world of mobile devices, cloud computing, unstructured data processing... we live here because this is where absolutely the highest productivity is, both for my engineers and for our users. On-premise is a thing of the past. PCs too will pass. In just a few years we'll wonder why we ever had lap tops and kept our content locally. And I can't wait!

Source: Qatalyst, CapitalIQ
Company Market Capitalization Over Time ($Bn)

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