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Saturday, March 28, 2020 / 09:07AM
/ By Kevin William David / Header Image
Credit: wired.com
While the rest of the
economy is tanking from the crippling impact of coronavirus, business at the
biggest technology companies is holding steady - even thriving. With people
told to work from home and stay away from others, the pandemic has deepened
reliance on services from the technology industry's most prominent companies
while accelerating trends that were already benefiting them.
For companies managing
their internet infrastructures, making adjustments to computing needs on the
fly is expensive and complicated. Cloud computing makes it easier. Companies
were already dumping their own data centers to rent computing from Amazon,
Microsoft, and Google. That shift is likely to speed up as millions of
employees are forced to work from home, putting a strain on corporate
technology infrastructures.
Microsoft has aggressively
pushed its new business messaging and collaboration tool, Microsoft Teams,
which competes with the independent company Slack. Last week, Microsoft said
the number of users on Teams had grown 37 percent in a week to more than 44
million daily users. There have been at least 900 million meetings and call
minutes on Teams every day.
Amazon has muscled in on
brick-and-mortar retailers for years, but shoppers now reluctant to go to the
store, are turning to the e-commerce giant for a wider variety of goods, like
groceries and over-the-counter drugs. Amazon said it was hiring 100,000
warehouse workers to meet surging demand. While Amazon has changed shopping
habits for items like books, getting customers to trust it with groceries has
been challenging. That's now changing.
Other grocery delivery apps
including Instacart, Walmart Grocery, and Shipt, have begun to see record
numbers of daily downloads. Instacart plans to hire 300,000 gig workers over
the next three months, more than doubling its current base.
Voice calling over
Facebook's WhatsApp messaging service has doubled in volume. Facebook's
Messenger app has had similar growth. Analysts are bullish about Facebook's
prospects because many people turn to it for news in times of crisis and to
distract themselves while working from home.
Downloads of Netflix's app - a proxy for traffic from the streaming site - jumped 66 percent in Italy. In
Spain, they rose 35 percent. In the United States, where Netflix was already
popular, there was a 9 percent bump. Streaming services like Netflix have
dampened box office sales for movies in recent years. Now, as movie theaters
close under government orders, Netflix and YouTube are gaining a new audience.
Video game usage and live
streaming have spiked. Globally, the weekend of March 14 saw a significant
increase in streaming audiences over the previous weekend, with Twitch's
viewership going up 10% and YouTube Gaming's by 15%. Verizon found that online
gaming has increased by 75% during peak hours in North America, while streaming
is up 12%.
Even Apple, a company with
hundreds of closed stores around the world, is increasingly looking as if it
will emerge from the pandemic in good shape. Many of Apple's factories are
nearly back to normal. People are spending more time and money on its digital
services. Last week, Apple even released a lineup of new gadgets.
More time and money spent
on phones is also good news for Apple and Google because they take a cut of
most app sales and in-app purchases. Over the past two weeks in the United
States, Apple and Android App Store revenue has risen 14-20%.
That's not to say major
technology companies shouldn't be worried. Advertising, the lifeblood of Google
and Facebook, tends to suffer during economic downturns. The stocks of Apple,
Microsoft, Amazon, Facebook, and Google's parent company, Alphabet, have
collectively lost more than $1 trillion in market value in the last month. And
Microsoft, Twitter, and Apple have cut their short-term financial forecasts
because of slowing consumer spending.
Beyond the big five, things
have been more of a struggle. Communication tools like Zoom are now essential,
but ride-hailing firms like Uber and Lyft and property-rental sites like Airbnb
are seeing customers vanish. The $3.9 trillion global technology industry will
suffer this year, though just how much remains unclear.
But when the economy does
eventually improve, big tech could benefit from changes in consumer habits. And
despite more than 18 months of criticism from lawmakers, regulators, and
competitors before the pandemic hit the United States, the biggest companies
are likely to finish the year stronger than ever.
About the
Author
Kevin William David is the
Director of Community @angellist and No. 1 Hunter on @product-hunt. For more,
visit www.kevinwilliamdavid.com
Credits
The post Big
tech could emerge from coronavirus crisis stronger than ever first appeared in Angel.co on Thursday,
March 26. 2020.
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