Jul
3
12



Four technology trends in the public market

Every once in a while, it’s nice to look retrospectively over the past 20 years to see how technology has evolved. I’ve prepared four charts to demonstrate the evolution of technology.

Chart 1: It’s been a wild ride (updated)

In 2000, the IT industry represented $8T in global market cap (sum all the market caps of all the public companies). It was euphoria. We’re actually now very close to the same level of market cap, ┬ádespite a few 50%+ drops.

Chart 2: Technology as a sector is much more fragmented than it used to be

In 1990, the top 10 IT companies represented over 80% of the value of the entire IT sector. In 2000, during the boom, that figure dropped to 5% because companies were going public every day. In 2012, even with the behemoths of Apple and Google, the top 10 companies represent only 30% of the entire IT market cap. The ecosystem has diversified and blossomed.

Chart 3: The biggest market cap in 2000 exceeds Apple’s market cap today

At its peak, Microsoft was worth $640B in 2000. Docomo and Cisco each were worth nearly Apple’s current market cap.

Chart 4: The constitution of the technology industry changes every 10 years

In 1990, the top 10 tech companies were telcos and computer makers. IBM represented more than 35% of the sum of the top 10 market caps. In 2000, Microsoft surpassed IBM (who fell off the top 10 list). Networking and telecom were the big sectors while software and databases was on the rise. In 2012, mobile devices and hardware made a huge push. Samsung and Apple are duking it out. Microsoft is still the 2nd largest company. Google is a new entrant representing the pure web. Through it all, Microsoft is the only company to have been in the top 10 market caps each decade.