The rise of the MegaCorporation
Who has seen Mr. Robot? The refreshingly accurate thriller about a hacker taking on one the corporations that rules the world. E Corp, or EvilCorp as the main protagonist calls them. The story paints a dystopian alternative reality where mega-corporations hold all the cards and rule with an iron fist. Above government and without conscience.
We aren’t far off this world. Alternative news media regularly writes about corporations literally getting away with murder, expensive lawyers tying up class action lawsuits and even more expensive accountants, squirreling away their often, ill-gotten gains. That being said, the death of village economy is doing way more harm than getting away with white collar crime.
I can happily site statistics that show a 20% drop in new business being established or the market returns of mega-capital businesses or even the fact that Microsoft, Facebook, Apple and Co have acquired over 500 promising start-ups in the last few years but I would prefer to tell a story, they are way more fun.
Once upon a time, yes all good stories start with that ubiquitous line, there was a village. This village was one of many similar villages that existed in a country (please insert your country here) and in this village lived people and all these people played an important part of the villages economic cycle.
We will start at the origin of our cycle and our cycle revolves around food, so it has to start with the farmer. Now around this village there are a few different types of farmers, there is a dairy farmer, a sheep farmer and a produce farmer. All these farmers have something in common though, they all sell their produce in the village. They sell to the local butcher, grocer and milkman, respectively.
You can probably see where this is going, we have a local bank, mechanic, car dealer, petrol station and the ever-present pub or maybe seven. The important part here is local. Money tended to circulate locally, in the economy, at least the majority of it. This is relatively sustainable, and it would have continued to be so if it hadn’t become so easy to travel. Suddenly, through the ease of modern transport, it became possible to drive to a nearby city or town that had already been invaded by a mega-store. Why? Because they can get the same produce and goods, cheaper.
Large corporations benefit from economies of scale so for them to buy from the local farmer, he has to deliver at prices that they set. They have massive transport fleets and have no problem moving produce hundreds of miles if it means they get a better price. Consequently, the very base of the cycle is hit first. Farmers can’t make a living anymore and their land is being bought up by “mega-farmers”, their staff become redundant through automation which further reduces the value of the produce and the entire cycle starts to crumble. Next to fall are the local businesses, again due to economies of scale, the local grocer, butcher and milkman can’t compete, they have no choice but to go work for the mega-store if they want to put food on the table.
But the biggest impact is where the profits go and they go back to the city, distributed to faceless shareholders, CEO’s and boards and are removed from the village’s cyclical economy forever.
This genocide of micro-economies is nothing new but what is new is that it is now happening on a global scale. The world’s most valuable businesses are all global, benefiting from both the ease of transport as well as the ease of communications and technology, is one the key driving forces.
I am going to get a little selfish here and talk about how it is affecting me personally and my small business. I started my business in the relatively small but exciting construction site that was Qatar in 2006. It was a booming market and I worked with many of the mega-corporations, utilizing their products to deliver my projects and services. What I didn’t do, was compete with them. I didn’t have to. I delivered, through my expertise and the expertise of my team, the systems that the technology manufacturers spent millions of dollars developing. It was an easy symbiosis. I needed them and they needed me. Well, not anymore.
Gone are the days where a client would need a systems administrator for their server, they just subscribe to a PAAS service from Microsoft or Amazon, gone are the days where I would install a server and database for a client to run their account system, that’s all online as well.
Corona Virus has pushed to the forefront remote collaboration systems and they are all the rage. Many friends and acquaintances have assumed this would be a boon for IT integrators, on the contrary, this has merely fed back into the mega corporations’ hands. Zoom, Teams, Webex and many others are online SaaS services that are as easy to set-up as Facebook or Instagram. Even the back-end configuration can be handled by someone with even a modicum of computer literacy and the entire, immensely expensive and complex infrastructure, in the back end, is managed and maintained at no cost to the end-user (its built in), by the aforementioned, megacorporation.
In a previous lifetime, this would have required a complex on premise set-up, with plenty of maintenance requirements, the original home of specialist integrators.
They are even going a step further, using their financial might and buying power, they are taking what little on premise infrastructure that is still required and leasing it to the end users in an Opex model. This is great for the end users, but SME’s simply do not have the capital to be able to provide a competing solution.
These are a few obvious examples, there are many more, but where does all this leave small integrators?
Adapt or die, is the short answer. Innovate, learn, use the skills acquired over many years of solving other people’s technology problems to solve your own. It would be easy to sit back and dwell on the current trends but in every evolution, there is opportunity. The challenge is to identify it and turn it into a revenue stream.
This, fellow SME’s in the technology sector, is your mission, should you choose to accept it. Take the time, while stuck at home in quarantine, to take a long hard look at the market. Find the problems. Solve them. Show the world, that innovation still lies with the individual, the small and flexible, the agile, not the seemingly unstoppable monolith.