In yesterday’s post on the 21st Century Corporation (read Geoff Colvin’s excellent essay here), we noted that capital is becoming less important to the modern company. Cloud computing is a huge driver of that trend. It converts technology CAPEX into OPEX, making it relatively easy for companies to scale up or slow down their tech efforts.
It also makes big money for the companies operating the giant server farms housing the cloud. Amazon (AMZN) announced quarterly earnings results yesterday that blew the doors off most analysts’ estimates, powered by a near doubling of sales by its Amazon Web Services platform from a year earlier. Microsoft (MSFT) also reported a strong sales gain on its Azure cloud platform, and CEO Satya Nadella predicted cloud sales would grow from $8 billion to $20 billion in the next three years. Alphabet (GOOG) (formerly Google) also reported a bang up quarter.
Compare that to the dismal messages coming out of companies still relying on captive hardware – IBM, HP, Dell, EMC – and you get a picture of how rapidly the world of business is changing. Our post yesterday pointed out that tech disruptions have a tendency “to destroy more value for incumbents than they create” for the disrupters. That’s what’s playing out here — although we think the move to the cloud ultimately paves the way for a vast increase in computing by companies, as they connect everything and collect and analyze ever more data.
Meanwhile, this morning we are posting a story from our November magazine that reveals one dark side of the tech revolution – a potential health crisis in Silicon Valley. Turns out hunching over your computer screen 18 hours a day, drinking red bull and eating sugar snacks, isn’t particularly good for your health. Remember the Freshman 15? In the valley, it’s the Facebook 15 and the Twitter 20.
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