October 24, 2015

Where's The Value?

So I don't know how I feel about this or maybe I do. 

The Wall Street Journal reports today that from the 10 largest companies by market capitalization:

1) The top 3 are technology companies

- Apple $679B
- Alphabet (Google's Parent) $489B
- Microsoft $422B

2) Moreover, a full 5 (half) of the top 10 are technology companies

That includes the 3 above and the other 2 below:

- Facebook $288B
- Amazon $280B

As a technology person, I am thrilled at the impact that IT has on our society. 

We are no longer the same thanks to our Apple iPhones, Google Search, Microsoft's business tools like Outlook, Office and SharePoint, Facebook's social networking, and Amazon's online shopping. 

But to think that these information capabilities outweigh by value everything else in society that we need as people is somewhat astounding.

For example, the other 5 of the top 10 companies are:

- Exxon Mobil (Oil and Gas) $346B 
- Berkshire Hathaway (Insurance, Utilities, Clothing, Building Products, Retail, Flight Services) $340B
- General Electric (Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation) $298B
- Wells Fargo (World's Largest Bank) $280B
- Johnson and Johnson (Pharmaceuticals) $278B

So when you add these behemoths up--this is what we have:

The 5 top technology companies are worth $2.158T


The top 5 traditional companies from all the other industries combined are worth only $1.542T

Net it out:

The largest representative IT companies are worth $616B or 40% more than the other major companies combined.

(In fact, just the top 3 IT companies at $1.56T are worth more than the top 5 other companies at $1.542T.) 

Sure IT growth has been on a tear for the last couple of decades and we love everything futuristic it brings us. 

But isn't it a little scary to think that the companies that meet all our other needs from food, clothing, shelter, medicine, transportation, energy, finance, retail, etc. isn't worth more to us than just the IT alone. 

Perhaps adding it up from a value perspective just doesn't add up in a real life perspective. 

I love technology and want more and more of it, but man does not live by technology alone. ;-)

(Source Photo: Andy Blumenthal)

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