Who Leads In A Data-Driven Tech Landscape?
The only constant I see across Technology is the proliferation of data. Data in the form of video, images, text and various other outputs generated by multiple user types including consumers and commercial users. This includes machine-generated output. There will continue to be a need for technologies that excel at creating, storing, sharing, processing, analyzing and encrypting these various outputs. Which companies are best positioned to lead?
Big bubbles tend to get bigger. I continue to expect AWS (AMZN), Azure (MSFT) and GCP (GOOGL) to lead the charge when it comes to what was originally the remote server business - or putting servers in the cloud. That original business has of course evolved over the years into something far more sophisticated to where each company’s cloud has evolved into hyper-intelligent, super-capable clouds at hyper-scale. AWS, Azure and GCP have built-in cybersecurity, built-in remote monitoring, ready for use AI/ML/DL and various advanced automation services and much more. Every Software company that I can think of since circa 2010 is built on top of AWS or Azure (a clear #2 to AWS) and increasingly GCP. It seems that every other company regardless of size or age or industry leverages AWS, Azure and/or GCP in some way. These three giants have won the scale game.
Chips are a key differentiator for powering various devices and applications, including AI/advanced automation. This is why Google, Apple, Amazon and other firms are designing their own chips. This is why Sam Altman wants to raise $5-7 trillion to build chips. Advanced processing is increasingly taking place “on device” which is why Google and Apple are investing heavily in custom chips for their respective phones. NVIDIA will not be as dominant in the future as Amazon, Apple and Google to name several will increasingly design more proprietary chips for various devices.
With respect to AI/ advanced automation and various advanced analytics at the application layer, companies with vertical expertise will build the last mile, likely using Azure, AWS or GCP for Core AI and related services. S&P Global (SPGI) is one such example. Bloomberg another. CoStar (CSGP) is another. The ICE (ICE) is another. There will be a few large horizontal players such as Snowflake (SNOW) which exist only because AWS (in the case of SNOW) and or Azure allow it.