For months now, the four Big Tech companies: Google, Facebook, Amazon, and Apple, have been operating under a microscope. All four are dealing with antitrust lawsuits. Facebook has been hit with billions in fines all over the world. Amazon’s devices have been accused of listening and recording conversations, and Apple has been accused of regulation violations across the globe. A few months ago, Big Tech was not doing so well. But then COVID-19 changed the storyline.
Why Big Tech is Coming Back: We Need It More Than We Realized
This past month, Facebook revealed a 10 percent spike in monthly user traffic. People stuck at home unable to socialize with friends in person came back to the platform in droves. Facebook reported a 17 percent growth in its Q1 earnings YoY. Granted, this traffic will probably decrease once social distancing restrictions are lifted, but the fact remains: People need Facebook to stay connected.
Even Amazon reported the largest growth in three years, with online sales surging as more people are shopping from home. Amazon has actually hired more workers during this pandemic in order to help keep up with demand. Again, once social distancing guidelines are lifted in more places, I’m sure there will be a dip in sales and the Q2 earnings, but it goes to show that consumers came to Amazon when they needed it.
Why Big Tech is Coming Back: It’s Trying to Do the Right Thing
With government indecision and roadblocks in congress, many small businesses are facing an uncertain future. Facebook and Mark Zuckerberg claim they want to help, pledging millions for small business grants. Sure, this is likely an obvious ploy for some much-needed good PR, but that doesn’t negate the fact that small businesses are benefiting.
Google and Apple are working together to develop a contact tracing app to help fight coronavirus. Testing and contact tracing are likely the only way out of this crisis so, despite the concerns about data privacy, this has been viewed as a good move.
Big Tech is also offering huge discounts or giving away software services for free to help where they can. Google is giving free access to its video conference service Meet. They are also giving non-profit organizations reduced fees on GSuite. Amazon pledged $20 million to the AWS Diagnostic Initiative to help find a cure. They also donated 8,200 computers and laptops to Seattle-area public schools to ensure continuous learning for students.
The cynic reading this will probably say that these are all PR moves, but at this point it doesn’t matter what the motive is. The fact that Big Tech companies are using their power and resources to help local communities, small businesses, and the world at large is what matters.
The Bigger Question: Will the Big Tech Revival Last?
So, will this Big Tech revival last? Like most things related to this pandemic, it’s truly too soon to know for sure. While the Big Tech companies are gaining favor for being useful and doing some nice things in time of emergency, we know from past experience that customers no longer choose brands because they are useful. They choose them because of the experiences those brands offer. Despite the reasons Big Tech is growing right now, neither of those reasons actually relates to customer experience.
My most informed guess is that the benevolence we are seeing on the part of Big Tech will last for as long as this coronavirus COVID-19 pandemic does. Big Tech will continue to see strong growth throughout the end of the year as the majority of the world continues to play it safe in avoiding COVID-19. Remote working will continue to stay strong and people will continue to gather at the “water cooler” that is Facebook. People will avoid shopping in person if it is not absolutely necessary, and we’ll still be buying devices, watching movies, and playing games more than we did a year prior.
We will see big earnings from Big Tech as a result, but it’s only temporary. Once we return to a sense of normalcy, things — including the perception of Big Tech — will shift. But for now, I’m enjoying what these conglomerates are doing to help people — and you should too.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
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