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Yep. Just look at the top 10 companies by market cap: 1. Microsoft – mostly software 2. Apple – software and hardware 3. Amazon – mostly software 4. Alphabe

Yep. Just look at the top 10 companies by market cap: 1. Microsoft – mostly software 2. Apple – software and hardware 3. Amazon – mostly software 4. Alphabet – mostly software 5. Berkshire Hathaway – not tech 6. Facebook – mostly software 7. Alibaba – mostly software 8. Tencent – mostly software 9. Johnson & Johnson – not tech 10. Visa – not tech, but mostly software

chrisseaton 7y ago
I'm not sure company value can really tell you what the volume of new tech is. Does a company like Facebook really develop new tech, or just apply it? They don't produce that many papers, compared to even a small university department. How are you even measuring the volume of new tech? What is one new composite material compared to one new JavaScript framework? How do you compare those?
- w1nk 7y ago
  I don't believe the claim of their publishing rate is accurate. They published over 300 papers last year according to the research website (https://research.fb.com/publications/?dateYear=2019 https://research.fb.com/publications/?dateYear=2019). Is a small university department really producing more than a paper per working day?
jbay808 7y ago
Can you justify the claim that Amazon is mostly software? Is it because they hire a lot of well-paid software developers? Microsoft produces a lot of value from software, but how much new technology are they producing? Some for sure, but how much? I don't think your metrics prove the claim... Facebook has developed a software product, and earned a lot of value from advertising. They've also developed several new technologies along the way, but I'm not sure their advertising revenue or market cap are good trackers of their R&D output. Software products obviously scale very well, which makes them very valuable. But are you counting new technologies in terms of dollars earned? That's very different than just the number of innovations, because it depends on the size of the market for them, your capacity to exploit it, etc.
- Grimm1 7y ago
  Not OP but, it is my understanding Amazon Web Services is their biggest money maker, that's where I think that claim comes from.
  - jariel 7y ago
    'Market cap' is not the best choice of metrics here, it's really a measure of investor surpluses, ignore the rest of the equation. Wallmart, Exxon, Amazon retail revenues completely dwarf the 'tech sector' - it's just that their margins are more narrow, in most cases, surpluses to consumers are vast. Honestly 'profit to investors' should be one of the last metrics most of us care about. Most individuals should be far more concerned about surpluses they receive through lower prices or higher wages, as they'll nary get any real material lift via investment income. In this way, it's kind of odd how 'market cap' is so widely used and perceived as some kind of great measure. It's good for investors, and unless you're an investor, it's bad for you. Every dollar that goes into the pocket of Amazon's investors should be a dollar in your pocket in the form of lower prices or better products/services. Have a look at the biggest companies by revenue [1] The only 'tech' companies on there are Apple and Amazon. Amazon makes the hardware, and most of Amazon's revenue is retail goods. There are not mostly software companies on that list. Actually, a lot of HNer discussions tend to veer into this magical surplus world as well, I'd encourage anyone to have a look at 'big revenue companies' because it gives a much clearer picture of how the world works outside our bubble. [1] https://en.wikipedia.org/wiki/List_of_largest_companies_by_revenue https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
    - jariel 7y ago
      Edit: meant to write 'Apple makes hardware'.
    - jldugger 7y ago
      I'm curious why you think revenue matters more than profits. Take two hypothetical companies, say ebay` and amazon`. They both provide a marketplace, but slightly differently. ebay` allows manufacturers to list directly on their market for a fee. Amazon` buys from manufacturers and sells on their market for a markup equivalent to ebay's fee. Are these two companies substantially different? I don't think so but the revenue frame of reference says they are,

chrisseaton 7y ago

I'm not sure company value can really tell you what the volume of new tech is. Does a company like Facebook really develop new tech, or just apply it? They don't produce that many papers, compared to even a small university department. How are you even measuring the volume of new tech? What is one new composite material compared to one new JavaScript framework? How do you compare those?

w1nk 7y ago
I don't believe the claim of their publishing rate is accurate. They published over 300 papers last year according to the research website (https://research.fb.com/publications/?dateYear=2019 https://research.fb.com/publications/?dateYear=2019). Is a small university department really producing more than a paper per working day?

jbay808 7y ago

Can you justify the claim that Amazon is mostly software? Is it because they hire a lot of well-paid software developers? Microsoft produces a lot of value from software, but how much new technology are they producing? Some for sure, but how much? I don't think your metrics prove the claim... Facebook has developed a software product, and earned a lot of value from advertising. They've also developed several new technologies along the way, but I'm not sure their advertising revenue or market cap are good trackers of their R&D output. Software products obviously scale very well, which makes them very valuable. But are you counting new technologies in terms of dollars earned? That's very different than just the number of innovations, because it depends on the size of the market for them, your capacity to exploit it, etc.

Grimm1 7y ago
Not OP but, it is my understanding Amazon Web Services is their biggest money maker, that's where I think that claim comes from.
- jariel 7y ago
  'Market cap' is not the best choice of metrics here, it's really a measure of investor surpluses, ignore the rest of the equation. Wallmart, Exxon, Amazon retail revenues completely dwarf the 'tech sector' - it's just that their margins are more narrow, in most cases, surpluses to consumers are vast. Honestly 'profit to investors' should be one of the last metrics most of us care about. Most individuals should be far more concerned about surpluses they receive through lower prices or higher wages, as they'll nary get any real material lift via investment income. In this way, it's kind of odd how 'market cap' is so widely used and perceived as some kind of great measure. It's good for investors, and unless you're an investor, it's bad for you. Every dollar that goes into the pocket of Amazon's investors should be a dollar in your pocket in the form of lower prices or better products/services. Have a look at the biggest companies by revenue [1] The only 'tech' companies on there are Apple and Amazon. Amazon makes the hardware, and most of Amazon's revenue is retail goods. There are not mostly software companies on that list. Actually, a lot of HNer discussions tend to veer into this magical surplus world as well, I'd encourage anyone to have a look at 'big revenue companies' because it gives a much clearer picture of how the world works outside our bubble. [1] https://en.wikipedia.org/wiki/List_of_largest_companies_by_revenue https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
  - jariel 7y ago
    Edit: meant to write 'Apple makes hardware'.
  - jldugger 7y ago
    I'm curious why you think revenue matters more than profits. Take two hypothetical companies, say ebay` and amazon`. They both provide a marketplace, but slightly differently. ebay` allows manufacturers to list directly on their market for a fee. Amazon` buys from manufacturers and sells on their market for a markup equivalent to ebay's fee. Are these two companies substantially different? I don't think so but the revenue frame of reference says they are,