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Software eating the Fortune 500
- stcredzero 14y agoIs software eating programming?
- peterjancelis 14y agoTo the extent that it does, it will increase the rate of software eating the world.
- jrkelly 14y ago"In another 50 years, would you expect Apple or Exxon to still be near the top of the list?". Is that a trick question? Exxon obviously - they make the thing we can't live without.
- uptown 14y ago50? Sure. But Exxon will also need to continue to evolve in order to ensure their relevance whenever the world's oil supply begins to wane. Probably won't be in our lifetime ... but someday something else will be more dominant out of necessity and Exxon won't necessarily be the one leading that charge.
- krakensden 14y agoOf course, as the supply of oil dwindles and demand grows, their volume will go down but their profit margin will go up.
- uptown 14y agoUnless it becomes considerably more expensive to obtain, and/or affordable alternatives arise.
- deleted 14y ago[deleted]
- sliverstorm 14y agoEven if they can't evolve, they have ridiculous amounts of cash. They could absorb a piece of whatever new wave comes along (assuming they missed that wave) and incorporate it. This is hard for product and most services businesses, but in the commodities business it ought to be much more workable.
- yxhuvud 14y agoYes, but they could just as well burn their money on something that don't pan out.
- AznHisoka 14y agoDitto. Just wait for a Great Depression, and you'll see what're more expendable
- soofaloofa 14y agoThe whole argument came apart right here. Exxon will certainly be near the top in 50 years.
- nandemo 14y agoI wouldn't bet either way. Just because people will be buying x in the future, it doesn't mean that today's top x companies will still be around in 50 years. The computer market is now much bigger than 50 years ago, but many computer companies of that time went broke. Just like we went from mainframes to personal computers, we'll probably be using much more renewable energy in 50 years, and it's not obvious that any given existing company will adapt to it. Also, there are mergers. Mobil and Texaco were in the top of the list in 1962, and now neither exists independently (merged into Exxon and Chevron resp.) so arguably they aren't in the list anymore.
- cs702 14y agoThis line of analysis looks promising, but the post leaves too many important questions unanswered, including: * How have mergers and acquisitions affected the rate of churn in the S&P 500? It could very well be that S&P 500 companies are disappearing from the list at a faster rate because they're being merged into or acquired by other companies at a faster rate. * To what extent does the rate of churn in the S&P 500 reflect declines in specific sectors of the economy unrelated to software? For example, US manufacturing has faced challenging times for several decades, so one would expect to see this trend reflected in the list. * How did the inflating and bursting of the Housing Bubble impact the companies exposed to that industry in the S&P 500? For example, many home builders and mortgage lenders boomed during the bubble and then went bust when the bubble burst. How is that reflected in the data? * How did the growth in financial services as a percentage of GDP affect the index prior to the financial crisis? How about after the financial crisis? Think not just about Lehman Brothers's demise, but about all the formerly high-flying financial firms that went bust or whose size is considerably smaller today.
- refulgentis 14y agoThis line of questioning looks promising, but the post leaves a question unanswered: * Did the questioner notice the article was referring not to the S&P 500, but the Fortune 500?
- CUR10US 14y ago"In another 50 would you expect Apple or Exxon to still be near the top of the list?" Well, maybe it depends on who is supplying power to the world, including, e.g., supplying the power to run Apple gadgets and Apple datacenters. Chances are it's still going to be Exxon.
- gojomo 14y agoLove the chart. Another fun thing to plot might be: what's the retrospective half-life of the Fortune 500? (That is, how far back do you have to go from each year for 50% of the companies to be different.)
- verra 14y agoIn 50 years, Exxon Mobile will be #1 while Apple will be nowhere in the top 50.
- tsotha 14y agoIn another 50 would you expect Apple or Exxon to still be near the top of the list? Exxon yes, Apple no. There isn't enough advantage to being the incumbent in Apple's weird combination of fashion and consumer electronics.
- SudarshanP 14y agoWhat if the world switched primarily to renewables? It is 50 long years...
- tsotha 14y agoThere will still be a need for hydrocarbon extraction. We use oil and gas as feedstock for all sorts of chemical production from fertilizer to plastics. Plus we'll still be using oil for things like air travel and military operations.
- writetoalok 14y agoWhat if no one needed gas anymore? I see solar panels everywhere. And electric cars would most definitely improve their efficiency and soon beat the Gas powered ones in every metric you could possibly imagine.
- arethuza 14y agoFor an article about "software eating the world" it would perhaps have been nice to use a list that isn't restricted to US companies. For example, there is the Forbes Global 2000 - this is just public companies, but Apple isn't even in the top 20 there (it's #22) http://www.forbes.com/global2000/list/ http://www.forbes.com/global2000/list/
- meric 14y agoWhat is that list ranked by? None of the columns are in any strict ascending/descending order. In particular Apple has the highest market capitalisation out of all the firms of that list, 540+b compared to Exxon (#1)'s 400b.
- arethuza 14y agoGood point - they explain it here: http://www.forbes.com/sites/scottdecarlo/2012/04/18/methodology-how-we-crunch-the-numbers/ http://www.forbes.com/sites/scottdecarlo/2012/04/18/methodol... NB I'm not particularly attached to the Global 2000 - just it would be interesting to use a list that isn't only US companies.
- kfk 14y agoThe margin paragraph is simply too optimistic, margins now are good because there is still small to no competition, when competition will come, margins will drop.
- jnorthrop 14y agoI'm intrigued by the idea of "regulatory capture." I hadn't heard that term before but that economic theory is playing such a prominent role at the moment in the growth of the market I work in, privacy (e.g. EU Data Directive, US Privacy Bill of Rights). We of course saw it clearly working in favor of IT in the US in the last decade with the advent of HIPAA, SOX and GLBA. Whole segments of the IT security business were basically born (re-born) due to this legislation. I wish Gabriel went into more depth on this point. Specifically I wish he provided some examples. I think we would all benefit from considering what changes legislation will bring and seeing if we can't jump on the opportunities early.