Guest Post by Prof. Steven van Belleghem, an award-winning author and an expert in customer experience in the digital world.
If you look back at the last quarter of 2018, it started to become clear that some of the world’s biggest technology companies were beginning to suffer a little bit. The level of growth they had enjoyed in the past were showing signs of being limited somewhat, and this was reflected in the stock market.
So, questions have started to be asked about where these tech giants go next. Of course, only people inside these companies know the truth about their plans, but I predict that we’re likely to see five major areas for investment – advertising, cloud services, payment services, content and mobility.
Here are my thoughts on what we might see in the next 12 months:
About a year ago, I made the prediction that Apple would move to buy one of the leading streaming services like Netflix or Spotify in 2018. It didn’t happen, of course, but I still think it makes sense that Apple will make an acquisition to move into that streaming market. They have Apple Music, so perhaps Spotify is less of a priority now, but Netflix would seem to make sense.
As for mobility, there are rumours that Apple is also looking at Tesla. It is perhaps a less obvious next step, but it might be a good fit between the two companies, and true acquisitions would be a logical way for them to move more into content and mobility.
It is safe to say that Facebook will look back at 2018 as a pretty bad year. As a brand they lost a lot of trust from their users and across society in general, so the big question is around how they plan to restore this, so there will be a lot of focus on expanding their security efforts.
I believe Whatsapp will be a key part of the company’s plans for growth this year. Regions like India could be an interesting area for Whatapps, especially if they can offer payment services to follow the kind of model that WeChat have used in China, as I believe there is potential for adoption much faster in markets like India than in Europe.
Together with Facebook, Google have established themselves as one the two leading companies in the advertising world. However, they are still lagging behind the likes of Microsoft and Amazon in the area of cloud technology.
Interestingly, the Google Cloud division now has a new leader who has joined from Oracle, who is known to be a little more aggressive in the market, so I think we will see some acquisitions from Google Cloud in the next 12 months. One obvious target could be Salesforce, but there are questions over just how compatible the two organisations would be.
Amazon have just been named as the world’s most valuable company, and that is partly down to the number of different fields they work across. One area they appear to be moving more and more into is healthcare, so I wouldn’t be surprised if Amazon acquires one of the big retailers in the healthcare world, such as the likes of CVS or Walgreens.
I also suspect that we will see Amazon move more and more into the offline world, partly through acquisitions but also through partnerships. There is a significant trend of “retail ecosystems” emerging in the retail industry, with companies working together to achieve scale and combine talent to meet customers’ needs better, so I think we will see a dynamic of Amazon’s ecosystem competing with Google’s ecosystem, for example.
Alibaba and Tencent:
If you look at tech companies in the East, you have Alibaba and Tencent who are competing in very similar fields. Alibaba makes most of the more revenues through advertisements, Tencent are growing in the field of advertisements, while for both of them, payments and content are very important, so we are going to see a head-to-head battle between these two giants.
What’s interesting is that in the field of content, these seemingly untouchable giants of China are facing competition from elsewhere. ByteDance are the owners of the largest short-format content network in China, sharing videos of just 15 seconds, which is enjoying strong growth.
ByteDance are also the owners of Toutiao, which is perhaps the most impressive content site in the world. The platform produces articles from journalists, social influencers and AI bots, and they personalise content for individual users in an amazing way – the average Chinese person spends 74 minutes per day on Toutiao which, to put into context, is 50% more than people in the West spend per day on Facebook.
ByteDance is the biggest Unicorn in China, so it is going to be very interesting to see what Alibaba and Tencent do in response. They’re currently being beaten in the field of content, and I cannot believe they will just let that happen, so I am sure we will see big investment in this area – so watch this space!