Corporate Giants like Apple and Alphabet Sucked the Life out of Tech in 2016—But They Won’t Last Forever

Apple CEO Tim Cook

Apple CEO Tim Cook Richard Drew/AP File Photo

Technology concentrates power.

Technology concentrates power. The great Maciej Ceglowski warned us of this three years ago, in his epic talk/essay "Our Comrade the Electron." But this year, more than ever, we learned how true this concept really is. Paradoxically, as more and more people reap the benefits of modern technology, the wealth and power it generates accrues to fewer and fewer companies. A tiny number of colossal corporations have extended their reach over the tech industry to the extent that they have a tentacle in, and enormous influence over, nearly every proverbial pot. In 2017, these tentacles are likely to continue to stifle broader, open-market innovation. The little guys are losing the battle for the internet—at least for now.

Bruce Sterling, poet laureate of futurists, was also an early prophet when it comes to the uber centralization of the internet. In a 2012 essay in The Atlantic, he dubbed the five most dominant tech corporations—Amazon, Apple, Facebook, Google (now Alphabet) and Microsoft—”the Stacks” because they are all five massive, vertically organized silos. Prognostications don’t get much better than this: earlier this year, those became the five most valuable publicly traded companies on the planet.

“Software is eating the world,” to quote Marc Andreessen’s famous dictum, and software is increasingly a winner-takes-all business. The overwhelming majority of smartphones in use today run one of two operating systems, both built by a Stack company. One Stack dominates social networking. Another dominates search. Three of them—Amazon, Alphabet and Microsoft—dominate cloud computing, i.e. the hardware and infrastructure on which tomorrow’s world-eating software will run.

It is widely agreed that AI is the next big thing in software. The Stacks are already buying all of the best AI startups, and, more importantly, have an overwhelming AI advantage over non-Stacks. To be effective, AI software needs data, the more the better, and the Stacks have all the best data. As a result, more and more, startups—and not just AI startups—are built not to dominate the sphere in which they operate, but in hopes of being acquired by a Stack.

There was a period of several years, as smartphones metastasized and conquered the world, when anybody could build an app and be successful. A good example of this is Uber, founded in 2009, and now the third-largest private employer in the world. But the smartphone boom may be slowing. App stores are stuffed full of millions of apps nobody downloads.

Think of Y Combinator, the Harvard of startups, which was founded in 2006. In 2011, after five years of operations, its poster children were Airbnb, Dropbox and Stripe. It was already apparent all three had every opportunity to become major new forces, and all three did.

In the five years since, Y Combinator has fostered far more startups than it did in its first five years. Not one of them seems as well-positioned today as those famous three were five years ago. Technology has concentrated power—mostly in the Stacks—and startups are suffering for it.

Most of us think of these developments as perfectly normal. But we should be concerned about centralized power, especially with the rise of autocratic governments around the world. We should minimize the ways this power can be used against people. At the very least, we should insist companies not be permitted to collect our data unless that data is necessary for the basic operations of a given service; that our data is encrypted when it is collected; and that it is deleted upon request or when it is no longer being used.

It may also be time for some more drastic changes to the way the tech world works. (Not least because “anonymized” data often isn’t actually anonymized.) Perhaps, for instance, laws should be changed so individuals legally own all of their data, regardless of who collected it or how, and can control how it can be used and when it is discarded.

As we head into 2017, however, there is some reason for hope—although not for the immediate future. Historically, the technological pendulum has swung back and forth between centralized and decentralized computing. “Big iron” mainframes evolved into personal computers. “Walled gardens” like AOL and CompuServer evolved into the open internet. “The Stacks” may themselves give way to something else, although what that next iteration might look like is unclear. “Personal cloud platform” Sandstorm, perhaps? Blockchains?

We’ll see. But I predict that, even as the mighty T. Rexes of the Stacks stalk the Earth, devouring smaller, plant-eating startups, we will see the early mammals of decentralized technology begin to grow and spread. At first, these species will live side by side, peacefully untroubled by one another. And then, some years from now, these mammals will begin to run rings around the Stacks.

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