
Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future - hvo
http://www.nytimes.com/2016/01/21/technology/techs-frightful-5-will-dominate-digital-life-for-foreseeable-future.html?ref=business
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kcorbitt
The title says it all. "Tech’s ‘Frightful 5’ Will Dominate Digital Life for
Foreseeable Future." But since we're talking about technology, "foreseeable"
translates to about two years. ;)

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johansch
(Microsoft was dominant for 1-2 decades.)

I think it's more likely we'll see at least another 5-10 years of dominance of
the "Frightful 5".

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scholia
And IBM was dominant for at least 50 years ;-)

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m_mueller
I'm doubtful that FB should be on that pedestal. Social is all about the hip
new thing du jour and I wonder whether FB can keep up with buying everything
new in the long run since their revenue is still not great. Their shady
tactics when trying to take over new areas like video show a certain amount of
desperation IMO.

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julianpye
Facebook is the most agile of the companies. Two years ago it was a desktop
web company, now it is all mobile. With Instagram it arguably made the best
tech acquisition of this tech generation - compare that to what Yahoo spent
money on. So don't see Facebook as a social app, see them as a powerhouse
capable of making big moves and being able to respond to trends better than
any other player. Since it has a hard time accommodating new functionality
under its Facebook brand, it's perfected the art of managing multiple consumer
brands.

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Mahn
And let's not forget they own Oculus now. Facebook could be in a much
different place in the next ten years depending on how that plays out.

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teddyh
“ _In the mainframe industry’s glory days of the 1960s, it was ‘IBM and the
Seven Dwarfs’: Burroughs, Control Data, General Electric, Honeywell, NCR, RCA,
and Univac. RCA and GE sold out early, and it was ‘IBM and the Bunch’
(Burroughs, Univac, NCR, Control Data, and Honeywell) for a while._ ”

[http://www.catb.org/jargon/html/D/dinosaurs-
mating.html](http://www.catb.org/jargon/html/D/dinosaurs-mating.html)

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ianamartin
Sad to see Farhad Manjoo playing the click bait game.

That article is so utterly lacking in content that I would expect it to be on
buzzfeed. He might as well have said #8 will surprise you.

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forgetsusername
> _Sad to see Farhad Manjoo playing the click bait game._

It's an article in a mainstream newspaper for a mainstream audience.

> _That article is so utterly lacking in content that I would expect it to be
> on buzzfeed._

The purpose is to explain how and why these "tech" companies are expanding
into things that most people wouldn't associate with them, and the reason is
the idea of the "platform". That's probably not familiar to the layman.

By the way, BuzzFeed does decent work.

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jmsdnns
Interesting they didn't include Netflix. Morgan Stanley talks about the FANG
stocks, meaning FB, Apple, Netflix, and Google, and I usually take issue with
_that_ for not including Amazon.

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AznHisoka
I don't consider them tech. The article even says "Netflix hosts their movies
on Amazon".

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mywittyname
Yes, Netflix has pivoted themselves as a content company, a la HBO.

Then again, the line for "tech company" is beginning to blur, since every
company is so heavily reliant on technology.

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Silhouette
Netflix is an interesting study in this respect, because they demonstrate both
the immense potential if you control a dominant tech platform, and how at the
same time relying on platform ownership can become your Achilles heel because
you're ultimately just a middle man.

With the likes of HBO launching their own services to distribute their own
original content, they have relatively little need for Netflix. Netflix, on
the other hand, is nothing without good content, and in the face of declining
third party content it has little choice but to move into creating its own to
remain relevant. And then suddenly it's "just another" content producer,
instead of "the" platform.

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Cthulhu_
The problem, IMO, is that any new tech startup that may one day grow to be as
these ones, get taken over (for exorbitant amounts) by these very parties once
they're starting to gain some traction. In fact, that seems to be the business
case for a lot of startups.

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AndrewKemendo
If you look at any massive company, in the history of business, they all grew
and gained market dominance via acquisition.

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malandrew
But there is a difference between maintaining dominance through smart
strategic investments (like Google acquiring DoubleClick, Android or Keyhole
or Facebook acquiring Oculus) and defensive investments because you missed
some boat in your segment of the market (Facebook acquiring Whatsapp or
Instagram)

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akanet
Honestly, I'd consider five entrenched players with frequent ups and downs to
be the signs of a fairly competitive industry. Indeed, each of the five seems
to offer roughly comparable products to at least two of the other four
players, suggesting that consumers are getting a pretty good deal out of all
this.

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johansch
It's a bunch of different industries though.

Social: owned by Facebook.

Search: owned by Google

Advertisement: owned by Google.

Mobile platforms: owned by Apple and Google. Actual competition here. No
wonder things have been moving quickly.

Shopping: owned by Amazon.

Cloud computing: owned by Amazon. Google and Microsoft are trying to break in,
so there's competition and progress.

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icebraining
Facebook is itself sustained by advertising, so how can Google own it?

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johansch
Google's revenues are 4x larger than Facebook's. But sure, Facebook are
probably getting there some time.

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cognivore
I find it curious, because only of of them produces something I use everyday -
Microsoft. It's more like the "Ubiquitous One and the Take Or Leave 'Em Four."

And even Microsoft doesn't "dominate" my digital life. I think it's about the
choices you make. You're choosing to be dominated. Maybe you get some benefits
using those companies (Prime looks good sometimes), but you don't have to be
involved with any of them.

That's not domination.

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chrisseaton
I'd be very surprised if you weren't using an AWS server many times a day
every day.

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cognivore
That's a good point I hadn't thought of - and you're right. I probably do
unintentionally, inadvertently, or, I'm not sure how to say it, but I don't
mind, I'm just not conscious of it.

So still, it just doesn't seem like "domination" to me. Yeah, so some of the
services I use use AWS. They probably could choose one of a bucket load of web
service services out there. Sure seems like there is a lot of choice in that
market.

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metaphorm
AWS has competitors to be sure, but they are definitely dominant in that
space.

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sgt101
errm - badiu? tencent?

Also the Foreseeable Future is quite a short time in this context.

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50CNT
Second that, Baidu(perhaps) and Tencent(certainly), and maybe Alibaba holdings
as well. These companies are operating in a country where massive investments
are being thrown around, and a product might go from 0 to 90% market
penetration in half a year, mobile payments work, and massive fulfilment
infrastructure. Wouldn't be surprised if they weren't already eyeing the
American market, and suddenly decide to go on a massive acquisition spree.
Only that many more C2C startups in China they can buy up or invest into.

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AndrewKemendo
So I am wondering if "this time it's different" when it comes to market
entrenchment because these 5 companies have so much cash that they buy any
potential competitor before they get out of hatchling phase.

I mean when you look at the range of capabilities, like the article states,
they pretty much have a finger if not a whole hand in what any analyst
predicts as future technology: Augmented Reality, Self Driving cars, Radical
Life extension, AI, Advanced Logistics etc...

It's hard to see a future when they are unseated.

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cconcepts
"the giants are among the top 10 most valuable American companies of any
kind."

Depends what you mean by "value". If current price Mr Market is willing to pay
= "value" then yes. If value is a measure of long term return based on another
set of measures like profitability etc then basing the future dominance of
these companies on their current stock price seems a little speculative.

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elcapitan
Foreseeable future, unless .. black swan. And so on.

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Piskvorrr
_Fore_ - _see_ -able, indeed. Void where unforeseen ;)

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mcherm
So the thesis of the article is that these 5 are permanently entrenched; that
none will be run out of business (in the medium term I agree just because of
size) and that no new ones will arise (really?).

The explanation is that these ones each control a network-effect-driven
platform (and that network-effect-driven platforms arose only during a certain
time period).

They list the network-effect-driven platforms: desktop (MS), web search
(Goog), mobile OS (Goog, Application), online advertising (FB, Goog), cloud
(Amzn, MS, Goog), shipping (Amzn), and "human relationships" (FB).

This thesis is absurd. By that theory, Google is fully dominant and Apple is
about to fall out of the club. The idea that no new network-effect platforms
can arise is unstated and unsupported.

I usually expect better work from the Times.

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oldmanjay
I am not particularly frightened. I'm not even clear why I should be.

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dannylowney
Interested to see how this pans out in the next 3 yrs. I see Facebook changing

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gamesbrainiac
Yet more clickbaity article titles with little to no real content.

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metaphorm
serious question, since I'm confused, why is the word "frightful" used here?

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Apocryphon
Given how many times the phrase "foreseeable future" was discussed in this
comment thread, maybe they should rename them the "Foreseeable Five".

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metaphorm
seriously. and what is the threshold of "foreseeable"? like 18 months, tops?

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amelius
Yes, probably until one of them invents strong AI.

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tempodox
Is it speculation time again? Slow news day?

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serge2k
Amazon over Microsoft?

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beatpanda
Who's losing? The users are.

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fixermark
How?

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teddyh
Monopolies and oligopolies are always bad for users. Not to mention that many
of these companies are in the business of things which directly harms users:
Advertisements, Cloud computing, Software-as-a-Service, etc.

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fixermark
Advertisements are controversial, but this is the first assertion I've heard
that SaaS and Cloud computing directly harm users.

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belorn
The harm comes from users who treat third-party servers as if it was equal
safe and private as a server standing inside the company walls.

How many lawyers use SaaS or cloud computing and put information trusted by
their clients in the hands of third-party (without ever informing their
clients). How many hospitals has data flying around, in plain text, about
people very sensitive situations that they entrusted to their doctors? How
many political parties and government institution has databases being sent to
third-party organization because they move their internal servers to the cloud
and didn't consider the impact?

There are laws, and the laws governing how sensitive data did never get
enforced before it became to late. Now we are in the situation that enforcing
a strict control would paralyze governments and organizations all over the
world, and as a result nothing is being done.

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clentaminator
When three more consumer technology giants exist (perhaps oriented towards the
dreadful Internet of Things), can we start to call them The Hateful Eight?

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dhimes
There's one issue that can severely damage two of them: Facebook and Google's
business value come completely from taking away privacy. Apple, Microsoft, and
Amazon also do so of course, but they can offer strong business models that
doesn't should the need arise. They won't be _as_ profitable, but they won't
die either.

At the moment Americans don't care about this issue, because they balance the
lack of privacy against their fear of terrorism. But if they start to care
things could turn around in a hurry for those two and we would see an
interesting scramble.

