Is Tech's Balance of Power Shifting?
Tech’s spiritual centre of gravity is moving from San Francisco to Seattle
Last week, The Economist published an article arguing that the pandemic is shifting the balance of tech power from SF to Seattle because of “a new era of subscriptions, e-commerce, and business infrastructure.”
The big tech companies have all done quite well over the last few months, but advertising revenue (Google and Facebook) is under pressure as companies pull back on marketing budgets, and hardware sales (Apple) are weak because of store closures and supply chain interruptions.
While the Bay Area tech companies are trying to quickly adapt by investing in new products and business lines (e.g., Facebook’s new video chat, Apple’s focus on services, Google’s cloud investments), Microsoft and Amazon have taken huge leads in…
- Cloud: $40B+ of AWS revenue
- Cloud + Productivity: $42B of MSFT “intelligent cloud” revenue, 200M Office365 MAUs, and 75M Teams DAUs
- Ecommerce: $140B of AMZN marketplace revenue
- Subscriptions: 150M Prime subscribers, 90M Xbox Live subscribers
Great to see The Economist recognizing the strength of the Seattle tech ecosystem!