By that measure shouldn’t Disney be considered a Tech company too? Or I guess banks and insurance companies.
Yeah, in the same way that every company that uses a phone is a phone company.
By that measure shouldn’t Disney be considered a Tech company too? Or I guess banks and insurance companies.
I hadn’t thought of it that way, but maybe the article (at least the small part I can read with no paywall) is on to something, Companies that sell access to technology or rely on technology to sell something else (he does give the example of e-commerce) should not be “Tech” companies.
The part I didn’t get to is where the author draws the line to tell what companies ARE Tech. I guess OpenAI or Google would qualify. They sell services but they are services they invented and made, with considerable researxh and investment. But what about Amazon or Netflix?
futatorius@lemm.ee 4 days ago
OpenPassageways@lemmy.zip 4 days ago
I’m on board with it if people want to change the terminology around these things, but it seems like the core of what the author is discussing is the valuation of these companies and potential bubbles.
I think it makes sense that Disney and Amazon and Netflix who are able to make money through more of a SaaS-like model would have a higher valuation than a car company that has to produce a new car for every unit sold. Maybe there’s a recent example of an over-valued car company we can think of?
Consider that an auto mechanic and a software engineer can have a similar problem-solving skill set, and could both be very intelligent. Why then does an auto mechanic make so much less money? It’s partly because of the economies of scale involved with software. The owner of the software company can sell the software to thousands of clients without having to pay the software engineer to build the software thousands of times. The owner of the auto shop still has to pay the mechanic to perform every job every time and get paid for it.
So while I agree that Disney and Netflix maybe aren’t “Tech” companies, it seems to me the real problem the author is grappling with is whether they should be valued similar to tech companies. So I guess the question becomes, are “tech” companies highly valued because they are expected to make some huge technological leap that shakes up industries, or is it because of the economies of scale inherent in the SaaS-like business model?
andallthat@lemmy.world 4 days ago
You make a great point. But just to stay on the example of cars: besides the innovation on EVs, there’s this horrible tendency to consider cars as tablets on wheels, both in the sense that you can forget about repairing them and in the sense that they are now increasingly considered low-margin hardware to run higher margin subscription services (or that the car itself becomes something you pay by use instead of owning). If anything warrants high valuation for a car company it would arguably be the innovation on EVs, rather than the SaaS model.
I hope the idea of Cars as a Service or Car Software As a Service dies before becoming too widespread. But if it doesn’t, maybe car companies wouldn’t become “Tech” companies, just more shitty subscription vendors. And their stock should be valued as such, not for the largely unwanted “Tech innovation”.
OpenPassageways@lemmy.zip 4 days ago
I agree. I’d like to see some separation between the car manufacturer and the software. Any computers in the car should support whatever operating system you want to put on it. Things like controlling the car’s functions would just be device drivers. If the car company also wants to get into the SaaS business, fine, but you shouldn’t be required to pay for that software to operate the vehicle.