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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

Senate retirements could attract GOP troublemakers

Sen. Roy Blunt (R-Mo.). Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

Sen. Roy Blunt's retirement highlights the twin challenge facing Senate Republicans: finding good replacement candidates and avoiding a pathway for potential troublemakers to join their ranks.

Why it matters: While the midterm elections are supposed to be a boon to the party out of power, the recent run of retirements — which may not be over — is upending that assumption for the GOP in 2022.

Congressional diversity growing - slowly

Data: Brookings Institution and Pew Research Center; Note: No data on Native Americans in Congress before the 107th Congress; Chart: Danielle Alberti/Axios

The number of non-white senators and House members in the 535-seat Congress has been growing steadily in the past several decades — but representation largely lags behind the overall U.S. population.

Why it matters: Non-whites find it harder to break into the power system because of structural barriers such as the need to quit a job to campaign full time for office, as Axios reported in its latest Hard Truths Deep Dive.

Staff for retiring Senate Republicans a K Street prize

Illustration: Eniola Odetunde/Axios

The retirements of high-profile Senate Republicans mean a lot of experienced staffers will soon be seeking new jobs, and Washington lobbying and public affairs firms are eyeing a potential glut of top-notch talent.

Why it matters: Roy Blunt is the fifth Republican dealmaker in the Senate to announce his retirement next year. Staffers left behind who can navigate the upper chamber of Congress will be gold for the city’s influence industry.