Iam willing to bet there’s moreM&A activity in the tech worldthan in any other industry.These deals vary in scopeand size: there’s always someniche solution that a bigger player needs, andthen there are the really big ones, such as IBMswallowing Red Hat ($34bn) or Dell taking overEMC ($67bn). One reason for all this furiousdeal-making is the explosion of online servicesand products over the last couple of decades.There’s a headlong rush to the digital world,and it’s extremely competitive out there: ifthere’s a gap in your offering, you can bet acompetitor will jump on it. Meanwhile, thosewho got in early, like Apple, Microsoft, Google,Amazon and Facebook, are now unstoppable,and seemingly too big to fail. This quartersaw the release of the first three of thesecompanies’ results, and it has been a verygood year indeed. Apple raked in $21.7 billionfor the three months until June, its best resultsin the company’s history, while Alphabet saidit had made $61.8 billion, an increase of over60% compared to the corresponding period ayear ago. Microsoft also did well, and reportedrevenues of around $46 billion during thequarter, showing an increase of just over 20%from the same quarter in 2020. All thesecompanies have benefitted from us spendingmore time online over the last two years,particularly for those offering productivitysolutions, such as Teams. There’s also been ahuge increase in online shopping. And that’snot to mention the stellar growth in cloudservices.

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Suite of servicesAll these huge companies are offeringoverlapping services. Apple makes excellenthardware, and operating systems. I don’tthink much of its browser, but plenty woulddisagree, and Safari has just under 20% ofthe market. It also doesn’t offer much in theway of enterprise services. Google has thesearch and browser market (Chrome is at65%) pretty much sewn up, and has about athird of the global digital ad spend. It also hasthe Pixel line of phones, tablets and laptops,none of which are available here. Microsoft,on the other hand, has about three quartersof the operating system market, and someimpressive hardware in the shape of theSurface products. It also has the Bing search,which has not seen much uptake.
How will this all shake out? Microsoft isin a very strong position. While Azure is stillsecond to AWS, the company’s strength is inits interlocking suite of services. Almost everyenterprise has some kind of Microsoft servicerunning, and, as mentioned, it’s made a verystrong play with Teams over the last twoyears. As you’ll read in our cover story, whereI speak to Lionel Moyal, the local commercialpartners lead, and it takes a great deal ofcare in training and then pairing up partnerswith special skills with organisations seekingsolutions. As he told me, it can’t just sit backand be a transactional business and hope ‘yourpartners will do all the work for you’.“We are actively creating demand with them,for them, and being very deliberate in helpingthem grow. If they succeed, we succeed.”There’s appears to be no stopping theMicrosoft rocket.

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Matthew Burbidge
Editor
matthew@itweb.co.za