The Big Five tech behemoths—Apple, Amazon, Google (Alphabet), Meta, and Microsoft—will produce $1.4 trillion in sales by 2021.
What are the sources of this revenue, and how is it distributed?
Below, we’ll look at the primary ways that these tech behemoths earn revenue, as well as how much their revenue has expanded in recent years.
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Dissecting Big Tech’s Revenue Streams
As we’ve indicated in earlier editions of this image, huge IT businesses gain revenue in two ways:
They either sell you a product or they don’t.
Or sell you to advertisers as a product.
Apple, Microsoft, and Amazon fit under the first group; these companies, like most traditional businesses, provide clients with a physical (or digital) product in exchange for money. Apple generates more than half of its revenue from iPhone sales, Azure cloud services create about a third of Microsoft’s total revenue, and Amazon’s online stores generate nearly half of the company’s revenue.
Meta and Alphabet, on the other hand, operate in a somewhat different manner. Rather than selling a product, these two tech titans make the majority of their money by selling the attention of their audience. Nearly 98% of Meta’s revenue is generated by Facebook ads, while 81% of Google’s revenue is generated by advertising on other Google products.
Regardless of how they generate sales, these companies all have one thing in common: their revenues have skyrocketed in recent years.
The Pandemic has accelerated growth.
Despite rising unemployment and pandemic-induced instability, the Big Five saw a large income increase.
Big tech’s combined revenue increased by 12% in 2019 (pre-pandemic). Despite the start of the global pandemic and the severe economic obstacles that accompanied it, big tech boosted its combined income by 19% the next year.
In addition, big tech’s total revenue increased by 27% year on year in the fiscal year 2021.
How did these businesses prosper in the midst of economic turbulence and geopolitical chaos? It became conceivable because the societal changes caused by COVID-19 increased demand for big tech’s products and services.
Lockdown limitations, for example, pushed individuals to shop online, prompting e-commerce revenues to skyrocket. As offices closed and firms shifted to totally remote workspaces, demand for laptops and cloud-based services increased.
Is expansion here to stay?
Most countries’ COVID-19 restrictions have since been lifted, and the globe has gradually returned to routine.
But that doesn’t imply big tech will stop growing. Indeed, the pandemic-induced changes in our work and shopping patterns are likely to persist, implying that the increased demand for big tech’s goods may be here to stay.
A global survey found that two-thirds of employees believe their employer will make remote work a permanent option. Furthermore, worldwide e-commerce revenues are predicted to increase significantly over the next few years, reaching $7 trillion by 2025.
Summary
The globe recently witnessed the COVID-19, and here are the outcomes of some of the world’s largest IT businesses that benefited from it. Please don’t be too concerned about how these firms will benefit from the pandemic. These are two of the most important IT businesses during the epidemic; without them, the world could become even more chaotic.
Personally, I would like to emphasize how the pandemic has provided the globe with a glimpse of the future of how businesses might grow even during a lockdown like COVID-19. Online, far more items and services are available. For most industries, working from home is a realistic alternative. These five IT titans have demonstrated that IT and technology are the future infrastructure for practically every firm.
