Posts Tagged ‘Uber’

Technology Firms Disrupting Their Models?

Thursday, November 16th, 2017

In the past I used to always compare the business model used by the technology companies of yesteryears ie. before 1990 (IBM, HP, Intel, Microsoft, Oracle etc) with those of the new entrants ie. after 1990 (Google, Amazon, Apple, Ebay, Yahoo etc) and notice these key differences:

  • Asset lite: The investments made were purely in technology
  • Ad lite: Very rarely we used to see sales people from these organisations advertising their products

Now I am beginning to compare these firms with the big ones that have emerged after 2000 (Google, Amazon, Apple, Facebook, Uber etc)

The following incidents are very interesting to note:

  • Amazon bought the Whole Foods chain in the US. This concept of buying brick and mortar businesses to compliment the online business is a big deviation from their past strategy (though they have tried opening a few bookstores in the past.)
  • Uber has placed an order for 24,000 driverless cars from Volvo. This deviates from their previous statements that Uber does not own any car but just the technology behind the platform.

This makes me ponder about why the technology companies are disrupting themselves.

Amazon might have to do this – as now they are competing directly with Walmart. Walmart is on an acquisition spree (they bought and have one more chance to conquer the ecommerce space. Meanwhile, another side benefit for Amazon could be the Amazon Locker. Each outlet of Whole Foods will now become home to Amazon Locker.