Apr 16, 2020 - Technology

The coronavirus spins tech's great wheel again

Illustration of coronavirus image on a wire bouncing against a row of metal balls hanging from wires

Illustration: Aïda Amer/Axios

For the past decade, everyone in the tech world has wondered how the great boom of the Big Tech era that began in the mid-2000s would end. Now we know.

Why it matters: Recessions are "incumbent killers," says Bruce Mehlman. He's talking about politics, but the same principle holds true in tech.

Flashback: Every past recession and downturn in modern memory has led to the eclipse of tech industry incumbents and the rise of new powers.

  • The brutal recession of the early 1980s kicked off the personal computer era.
  • In the milder recession of the early 1990s, the federal government essentially handed the internet over to the private sector and laid the seeds for the dotcom boom that gave birth to Amazon, while Microsoft cemented Windows' victory over Apple.
  • When that boom turned to bust in 2000-2001, during a mild recession for most of the U.S. that felt like a full-scale depression in Silicon Valley, Microsoft began to lose its chokehold on the industry, while Google began its rise.
  • The Great Recession of 2008-2009 hit tech much less harshly than the rest of the economy. While the industry didn't experience a major reset, the downturn did accelerate the rise of social media in the form of Facebook and Twitter. And the smartphone, introduced by Apple in 2007 just as the financial crisis was germinating, emerged from the recession as a new dominant platform.

What's next: Right now, it's hard to imagine how today's crisis could possibly alter the tech landscape in ways that would displace the power of tech's colossi.

Yes, but: Two midsize companies' recent successes point to ways that newcomers can still outflank the giants with well-conceived and -designed software, smart market positioning and, of course, luck.

  • Plenty of big-company versions of videoconferencing already existed, but it was a less widely known alternative from a smaller company called Zoom that suddenly turned up on everyone's devices when the virus crisis hit.
  • Zoom was simply easier to use than the alternatives offered by Apple, Google, Microsoft and others — although the same choices that made it easy also created privacy problems.
  • Similarly, there's a host of business-messaging services out there for coordinating work, but during the pandemic, the already on-the-rise Slack has seen massive growth in adoption. It plays well with other software, it treats users with respect, and it leaves room for a little fun.

The bottom line: We've only seen the first tremors from the pandemic's tech impact. Whatever's coming next will be as big as it is unpredictable.

Read the rest of this report:

Go deeper