Avni Rambhia's Blog

"Too Big To Fail" Applies to the Tech World Too

25 Aug 2013 | by Avni Rambhia
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As economies worldwide are staging a fragile if promising recovery, economists continue to chant the mantra of breaking up institutions - specifically, banks - that are "too big to fail".

Technology has given rise to many other corporations that are similarly too big to fail. Not because their failure would bankrupt or disrupt a financial ecosystem, but because their closure or failure would fundamentally disrupt and cripple a huge number of businesses in the United States, and maybe even in the world.

Microsoft is one that easily comes to mind. Should Windows cease to be enhanced and supported tomorrow, the loss of productivity that would ensue across corporations and individuals alike is easy to imagine. Google is another. Certainly there are alternative search engines available, but there is nothing yet to touch Google's engine in terms of speed and accuracy. There is also no credible alternative to Google's advertisement and analytics capabilities, and its subsidiary businesses such as YouTube. More importantly, there is no sign that such alternatives can be created despite the willingness of competitors to sink in billions of dollars of R&D investment.

As industry reliance on cloud based services grows, so too is the indispensibility of cloud-based service providers.  SalesForce.com, as an example, is a critical enabler of sales teams and customer relationship management systems. It's companion Force.com cloud service plays host to a significant volume of business-critical applications. Breaking news that an outage of Amazon's AWS service had taken down businesses as diverse as AirBNB and Vine (Twitter) emphasizes the depth and breadth to which businesses today rely on cloud infrastructure. With applications ranging from marketing automation to video transcoding and data processing to business-critical workflows being implemented on AWS, this is a close contender for being at the top of the list of technology companies that, today, are simply too big to fail.

There are other companies closely woven with our lives whose failure would cause tremendous personal nuisance and indirectly impact productivity. Yahoo! is exemplary in this category - it is easy to visualize the chaos that would ensue if Yahoo! mail were to close down (or even institute a monthly or annual fee for continued access) at some point. Network drive services such as DropBox are quickly rising to a similar level of significance; Microsoft and Google are also significant players in this space. Facebook, LinkedIn, MySpace... the list of technology vendors who are indispensible parts of our lives goes on. As technology continues to become a pervasive part of our connected lifestyles, this list can only grow.