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Market cap of big five tech companies surge 46% to $7.1tr

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Market cap of big five tech companies surge 46% to $7.1tr
  • Besides Apple and Microsoft, Amazon and Alphabet also joined the $1 trillion market cap club this year.

Dubai: World’s leading technology companies have been remarkably unaffected by the effects of the coronavirus outbreak when compared to other sectors.

Covid-19 has given a boost by forcing millions of people to work from home and shop online amid the pandemic and the big five – Apple, Microsoft, Amazon, Google and Facebook posted double-digit revenue growth for the nine months of the current year and also witnessed an impressive market cap growth this year.

According to data presented by StockApps.com, the combined market capitalisation of the big five companies surged by 46 per cent year to date to $7.1 trillion as investors flocked to the tech sector.

According to Yahoo Finance data, the combined market capitalisation of big five amounted to over $4.9 trillion in December 2019. After the stock market crash caused by the coronavirus outbreak, this figure dropped to $4.5 trillion in March.

However, the market cap recovered during the second quarter and hit over $6 trillion in June, a 24 per cent jump in six months. Statistics show this figure increased by more than $1 trillion since then, reaching over $7.1 trillion at the end of last week.

Covid has been a blessing in disguise

The Yahoo Finance data showed Apple’s market cap jumped by 56 per cent since the beginning of this year.

In December 2019, the combined value of stocks of the US tech giant stood at nearly $1.3 trillion. Since then, this figure increased by $730 billion, reaching $2 trillion last week, and pushing the company far ahead of last year’s leader Microsoft.

Microsoft market cap jumped by 36 per cent year to date, growing from over $1 trillion in December 2019 to $1.64 trillion last week. The company also reported $110.2 billion in revenue in the first nine months of 2020, 13 per cent more than the same period a year ago.

Amazon witnessed the most significant market cap increase in 2020, with the total value of its shares soaring by 80 per cent year to date.

In December 2019, Amazon market capitalisation stood at around $920 billion. Over the last eleven months, it jumped by almost $740 billion to reach $1.66 trillion last week.

Alphabet’s market cap rose by 12 per cent since the beginning of the year, growing from $921 billion in December to over $1 trillion last week. 

Facebook witnessed a 42 per cent increase in market capitalisation since the beginning of the year. The combined value of all Facebook stocks rose from $585 billion in December 2019 to $835 billion last week.

Besides Apple and Microsoft as the two largest tech companies by market capitalisation, Amazon and Alphabet also joined the $1 trillion club this year, despite the Covid-19 crisis.

Digital transformation to drive IT spending in EMEA by 2.8%

Naushad K. Cherrayil
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Digital transformation to drive IT spending in EMEA by 2.8%
  • Combined effects of Brexit and the Covid-19 public health interventions will cause spending in EMEA to decline this year.

Dubai: Information technology spending in Europe, Middle East and Africa (EMEA) is expected to increase next year as organisations start reconfiguring their business and operating models for a new reality and shift the areas they are spending in.

Covid-19 had dealt a blow to IT spending this year but next year, the spending is expected to grow by 2.8 per cent to $1.07 trillion.

However, IT spending in 2021 will still be less than in 2019.

For 2020, the spending is expected to decline by 6.5 per cent to $1.05 trillion compared to $1.12 trillion in 2019.

John-David Lovelock, distinguished research vice-president at Gartner, said that the combined effects of Brexit and the Covid-19 public health interventions will cause spending in EMEA to decline this year.

Before the pandemic, he said that most organisations moved their digital strategies forward at a steady pace.

“The way forward in 2021 is for organisations is to increase, rather than decrease, the speed of their digital business initiatives and fund those initiatives by diverting funds from other areas of IT,” he said.

Spending on enterprise software will witness the biggest year-on-year growth of 6.1 per cent to $130.82 billion, followed by datacentre systems by 4.1 per cent to $51.88 billion and IT services by 2.5 per cent to $291.95 billion.

Strategic workforce policy

Devices spending by organisations will move from a decline of 15.1 per cent in 2020 to an increase of 1.7 per cent in 2021.

As per Gartner stats, thin and light notebooks spending is on pace to grow 10 per cent and desktop-as-a-service platforms spending will achieve a steep increase of 60 per cent in EMEA in 2021.

Ranjit Atwal, research vice-president at Gartner, said that the pandemic has forced employers to adopt remote working, turning it into a strategic workforce policy.

 “Mobile PCs are a necessity for remote work and EMEA organisations will re-focus some spending on mobile PCs,” he said.

The speed at which remote working is occurring varies considerably around the world depending on IT adoption, culture and mix of industries.

The US will lead in terms of remote workers in 2021, accounting for 52 per cent of the US workforce.

Across Europe, UK remote workers will represent 48 per cent of its workforce in 2021, while remote workers in Germany and France will account for 38 per cent and 34 per cent, respectively.

Investments in delivering technologies to support remote workers will fuel spending on these technologies in EMEA by 5 per cent in 2021.

Organisations in EMEA will increase their total spending on collaboration and content platforms (17 per cent), security software (11 per cent) and cloud conferencing unified communications (4 per cent) in 2021.

TSMC board approves $3.5b investment for Arizona fab project

Ana Mary Joseph
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TSMC board approves $3.5b investment for Arizona fab project
  • Taiwanese company is expected to see its fourth-quarter revenue outpace the guidance given in mid-October.

Bengaluru: Board of directors at Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, has approved the $3.5 billion investment for setting up a subsidiary in Arizona, where the pure-play foundry plans to build a wafe fab using 5nm process technology.

The Arizona fab project, announced in May this year, is expected to start construction in 2021 followed by production in 2024.

Company said in a statement that the planned facility seeks to cater to customer needs rather than based on political considerations amid concerns that Joe Biden’s victory in the US presidential election might change TSMC’s plan.

The openings mostly focus on R&D engineers, process integration engineers, module process engineers, module equipment engineers, facility mechanical engineers and equipment automation software engineers.

3nm production facility on track

TSMC said its board of directors also approved capital appropriations of about $15.1 billion for the installation and expansion of advanced technology capacity, installation of speciality technology capacity, installation and upgrading of advanced packaging capacity, as well as fab construction, installation of fab facility systems and capitalised leased assets, and first-quarter 2021 R&D capital investments and sustaining capital expenditures.

Moreover, TSMC is on track to set up its 3nm production facility at Southern Taiwan Science Park (STSP) and ready to start production on a mass scale in 2022.

According to industry sources, the Taiwanese company is expected to see its fourth-quarter revenue outpace the guidance given in mid-October, driven by additional 5nm and 7nm chip output, despite Huawei sanctions weighing on its October sales.

In October, TSMC said its fourth-quarter revenue is expected to be up 29 per cent to 33 per cent annually, to a range of $12.4 billion to $12.7 billion.

For the full year, the company expects a growth of 30 per cent.

India’s PC market records biggest quarter in last seven years

Naushad K. Cherrayil
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India’s PC market records biggest quarter in last seven years
  • Consumer segment records its biggest quarter ever with 2m shipments.
  • Demand for laptops remains much higher than the current supply, which is likely to lead to another strong quarter of shipments in the fourth quarter.
  • Growing broadband connectivity will continue to be relevant for PC vendors for at least a few more quarters.

Bengaluru: The third quarter of this year became the biggest quarter in the last seven years for PC shipments in India due to the strong demand for e-learning and remote working.

The market grew 9.2 per cent year over year in the third quarter to 3.4 million units despite commercial segment having very few governments and education projects, registering a 3.1 per cent year-on-year growth in the overall enterprise segment.

The consumer segment recorded its biggest quarter ever with two million shipments, growing 41.7 per cent year on year and 167.2 per cent from the previous quarter.

Schools and colleges continued to function virtually, leading to a surge in demand for consumer notebooks, especially in large cities.

Despite the supply challenges, vendors were able to stock up for the upcoming online festivals. However, the demand for notebook PCs remains much higher than the current supply, which is likely to lead to another strong quarter of shipments in the fourth quarter.

Bharath Shenoy, market analyst for PC Devices at International Data Corporation India, said that there is still a lot of uncertainty if and when will the schools and colleges return to physical classrooms at full strength.

“The demand is expected to stay strong as India remains underpenetrated in PCs. To add to this, the growing broadband connectivity in the country is making online learning easier for students. Hence, this opportunity will continue to be relevant for PC vendors for at least a few more quarters,” he said.

Laptops steal limelight

Notebook shipments grew at a strong 70.1 year on year as enterprises preferred them over desktops.

SMBs resumed their purchases after taking a slight pause, as business operations started for most of the sectors with a relaxation in the lockdown restrictions.

Shipments to this segment grew 5.5 per cent year on year during the quarter.

However, this growth can also be attributed to channel procurement for better control over inventories amid the uncertain supply situation in the ecosystem.

Asus records strong growth

HP retained its top position with a share of 28.2 per cent in the third quarter, followed by Lenovo with 21.7 per cent share and Dell with 21.3 per cent.

Asus, ranked fifth, registered an impressive 55.4 per cent year-on-year growth in its overall PC shipments as it has been aggressive in expanding its offline presence, helping the brand to secure the fourth position in the consumer segment.

Also, this quarter the vendor officially entered the commercial segment with the launch of its Expert series.

New entrants like Xiaomi and Avita were able to leverage this opportunity but remained outside of the top five companies in the consumer segment. Apple shipments also grew 19.4 per cent year on year as it ended its biggest quarter of shipments in the country.

“Anticipating a longer work from home possibility, enterprises are getting ready for a larger mobile workforce and keep reducing their dependency on desktops. Also, SMBs started showing more momentum and will be critical in sustaining the ongoing growth in the commercial segment,” Jaipal Singh, Associate Research Manager for Client Devices at IDC India.

However, he said that shortages of some key components continue to be a challenge and vendors that will be able to manage the supplies of these components will benefit from this opportunity more as there is still a lot of untapped demand for PCs in the country.

Adobe to swallow Workfront for $1.5b

Ana Mary Joseph
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Adobe to swallow Workfront for $1.5b
  • Alex Shootman will continue to lead the Workfront team and will be reporting to Chakravarthy.

Bengaluru: Adobe said it will acquire Workfront for $1.5 billion in a bid to bring efficiency, collaboration, and productivity gains to marketing teams currently challenged with siloed work management solutions.

With more than 3,000 customers and one million users, Workfront is the solution marketers rely on every day to efficiently manage content, plan and track marketing campaigns, and execute complex workflows across teams while Adobe is the leader in the graphics and visual software industry.

Adobe and Workfront are longstanding partners with strong product synergies and a growing base of over 1,000 shared customers.

Workfront is equipped with APIs that enable a seamless connection to Adobe Creative Cloud and Adobe Experience Cloud. Shared Adobe and Workfront customers include Deloitte, Under Armour, Nordstrom, Prudential Financial, T-Mobile, and The Home Depot.

The transaction, which is expected to close during the first quarter of 2021 fiscal year, is subject to regulatory approval and customary closing conditions. Until the transaction closes, each company will continue to operate independently.

“Adobe is the leader in content creation, management, delivery, and measurement and a trusted partner to digital leaders around the globe,” said Anil Chakravarthy, Executive Vice-President and General Manager, Digital Experience Business and Worldwide Field Operations at Adobe.

“The combination of Adobe and Workfront will further accelerate Adobe’s leadership in customer experience management, providing a solution that spans the entire lifecycle of digital experiences, from ideation to activation.”

Adobe Experience Cloud

Adobe Creative Cloud provides the world’s best creative apps and services to everyone, from students, to social media influencers, to professional photographers, filmmakers, and designers.

Adobe Experience Cloud is the most comprehensive solution for content and commerce, customer journey management, and customer data and insights, all built on an open platform, enabling businesses of every size across every industry to deliver exceptional customer experiences at scale.

 “Adobe and Workfront share a common affinity to help the modern marketer thrive in an ever-evolving, increasingly demanding setting,” said Alex Shootman, CEO, Workfront. “We’re excited to join Adobe and believe this will be a tremendous opportunity for our customers and partners.”

Upon close, Workfront CEO Alex Shootman will continue to lead the Workfront team, reporting to Chakravarthy.

Rapid intake of emerging technologies to fuel cloud adoption in India

Naushad K. Cherrayil
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Rapid intake of emerging technologies to fuel cloud adoption in India
  • Overall spending on cloud computing in India is set to reach $16.5b in 2024.
  • Cloud continues to be the underpinning platform for all digital transformation initiatives.

Bengaluru: Cloud adoption in India is expected to get a boost due to the rapid intake of emerging technologies such as big data, Internet of Things, artificial intelligence, augmented reality and virtual reality, along with enterprises’ focus on cost reduction and operational scalability.

As per data and analysts firm GlobalData, the overall spending on cloud computing in India is set to reach $16.5 billion in 2024.

Amongst the public cloud offerings, infrastructure as a service (IaaS) is the fastest-growing segment, with an annual rate of 8.7 per cent during the forecast period 2019-2024, driven by the increasing preference of enterprises to migrate their application and workloads from on-premises datacentres to the cloud solutions to leverage IT effectively.

Although most organisations in India have adopted cloud at some stage, the current pandemic situation has now enabled organisations to spend more on public cloud infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS).

Accelerating investment in an agile cloud infrastructure is seen as a part of the solution to the challenges arising from the spread of the Covid-19.

According to a recent survey conducted by IBM, organisations in India are expected to be using at least 10 clouds from a growing number of vendors by 2023 but only 29 per cent of businesses have a holistic multi-cloud management strategy and the majority of the cloud budgets are being allocated to hybrid cloud platforms even as their public cloud spend is set to reduce from 50 per cent share today to 43 per cent by 2023.

Anshuma Singh, Technology Analyst at GlobalData, said that the growing adoption of public cloud offerings and the development of cloud-native applications are the major factors driving the demand for the cloud-based solutions and services.

‘Digital India’ initiatives

“Increased government spending on new e-governance projects based on cloud technology is expected to boost cloud adoption in the forthcoming years. For instance, India’s thrust towards ‘Digital India’ will result in increased spending towards cloud services to advance digital business procedures,” she said.

Moreover, India plans to launch a national artificial intelligence programme by the end of 2020.

The National Institution for Transforming India (NITI) Aayog further proposes the establishment of a cloud computing platform known as AI Research, Analytics, and Knowledge Assimilation platform (AIRAWAT) and that will create opportunities for the deployment of cloud services in the forthcoming years.

A large number of enterprises and institutions like The Ministry of Human Resource & Development (MHRD), MyGov.in, All India Council for Technical Education (AICTE), and National Association for Software and Services Companies (NASSCOM) leveraged cloud-based offerings to build citizen services, online hackathons, and solution challenges to address problem statements particular to global pandemic situations.

Security and data sensitivity raise concerns

However, Singh said that security and data sensitivity concerns might hinder the growth of the cloud computing market.

 “The recent Covid-19 pandemic also created new growth opportunities for cloud vendors. The availability of innovative and scalable cloud-based solutions to cater to the diverse enterprise requirements has provided an opportunity for cloud vendors to further scale-up their offerings to enable enterprises to function normally without any service disruptions.”

Rishu Sharma, Principal Analyst for cloud and artificial intelligence at IDC India, said that cloud continues to be the underpinning platform for all digital transformation initiatives and has therefore seen an acceleration in demand.

“Strategic investments in technology will become imperative to minimize the adverse impact and make businesses more resilient. The role of providers will become crucial in helping organisations flatten the curve and leverage cloud in their next normal,” she said.

More than 60 per cent of the Indian organisations plan to leverage cloud platforms for digital innovation based on IDC Covid-19 impact survey.

Singh added that the cloud adoption will grow soon with the proliferation of start-up ecosystem, along with solutions being built by leveraging emerging technologies like AI, AR/VR and blockchain on the cloud platforms.

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