This comment was made in the Guardian this morning:
The hedge fund of the billionaire Sir Christopher Hohn has written to Alphabet saying staff at the Google and YouTube parent are paid too much and its workforce should be drastically cut back.
London-based TCI, which has been a significant investor in the company since 2017 and holds a stake valued at $6bn (£5.1bn), has written to its chief executive, Sundar Pichai, urging it to emulate cost-cutting measures introduced by big tech rivals including the Facebook-owner, Meta, Amazon and Microsoft.
“We are writing to express our view that the cost base of Alphabet is too high and that management needs to take aggressive action,” said Hohn, managing director at TCI, in a letter made public on Tuesday. “The company has too many employees and the cost per employee is too high.”
Three thoughts. First, big tech is running out of road.
Second, these companies by and large employ very few people, but pay them exceptionally.
Third, the sector could obviously continue its employment rate at lower cost as a consequence.
But the real issue is not these obvious points. It is instead that this technology revolution has now most likely reached maturity. We are consuming as much tech as we want. The room for iterations that will actually appeal to available markets looks small. The rate of change is bound to decline as a result. The tech revolution is not over, and I don't for a moment suggest it is, but I also think it has ceased to be the driver of change that it was.
That leaves us in an era where things are going to be different. For example, if tech changes less often we will not be changing our IT as much to keep up. Nor will we be consuming adverts in the way we were, at least potentially. But, most of all, this is not where the focus of investment attention is going to be, and that seems like a big change.
The obvious question, in that case, is where is that focus going to be? My answer is straightforward. Money will be going towards the green economy now. That is where the money is needed. That is where the returns will be as companies have to become net zero, or cease to exist. And that is where people want to work.
Maybe I am calling this a little early, but I welcome the tech downturn precisely because it implies a new era is replacing the tech boom that really got going in the late 90s (when I was involved in it). Welcome to the age of the green economy. It's arrival is too late, but I think it is where we are going.
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I think there’s an error in your analysis and the technology revolution has not reached its peak.
Consider green energy which is not predictable. Technology can help solve that by allowing non-essential uses when there’s an oversupply of green energy and essential uses only when we’re down to a bit of hydro, pumped storage and nuclear.
I like some of the ideas for small payment systems being mooted too.
OK, so you misread the article – which as about consumer-facing tech – and then say I got it wrong
Try harder, or please don’t bother
I read your article as saying that big tech is running out of road and that that point was obvious although not the main view you wanted to get across which is that the room for new iterations was small.
Smarter energy use and small payment systems (e.g. enjoy article, donate 20p) could be customer facing, how could they not be?
Responding to Mr Frazer: what you put forward is OK as far as it goes but somewhat limited in the sense that it ignores what happens when renewable elec heads past 60% or 70% of consumption. The gas vector as storage needs to be included and demand response (which you allude to) is helpful but totally inadequate in terms of overall system management/capacity to absorb surplus & cover lack of RES.
The tech element also needs to be considered in terms of processing power (which for the most part is more than adequate) and software – which for the most part is wholly inadequate – I know because we looked at what is around in terms of energy management. What is needed is for example an RTOS (real time operating system) and programmes which can handle reasonably significant data sets again in real time, …..process control if you like with a focus on differtent energy vectors. Trust me on this: not done before.
The above is miles away from what Facebook etc need to support their operations. There are 23 million households in the Uk and a resonable argument could be made that most will need some sort of HEMS (home energy management system) interfacing with some sort of local energy management system (see below). Most of the work in this area has barely started, some of the usual suspects have $ signs in their eyes – hopefully their ambitions will not be realised. As for payments systems – trivial & just in case you are wondering – it won’t be distributed ledger (blockchain) which is wholly unsuited for large numbers of low value transactions due to it being computationally intensive/high energy demand. To finish: I’m not offering a point of view – the above are realities.
Thanks Mike
“Money will be going towards the green economy now. That is where the money is needed.”
I agree. In another blog post you mentioned turning buildings into power stations. I will not go into the technicalities but although the I.T embedded in a given building does not need to be very significant, I.T that coordinates the interaction of multiple buildings (= communities) will need to be very significant. Last year working with a student we speficied (formalised in terms of a programming spec) a LEM – a local energy management system. This is one of the building blocks of what is broadly termed “autonomous networks” – energy networks (notice I used “energy” not electricity) that are able, for the most part to manage themselves in terms of energy flows (gas & elec), what is stored when, cost optimisation (when to store & what to store). We have tried to get gov funding – so far without sucess – couple of Unis interested – but funding seems to be a problem (this is not an appeal btw and I might eventually just dig into my own pocket.). I and others have an on-going community energy project where we could apply the LEM (indeed will need one).
Back in 2011 I was talking to various UK DNO engineerers and they bought into the idea of autonomous electrical networks. However, little has happened since then – & much of what they have remains at a primitive level of development. Part of the problem being that they think only in elec terms. Pity.
One of the questions worth answering is: do we want an open LEM platform, or do we want a closed garden. Personally, I prefer the open platform & if I decide to fund the LEM it will be open. I’m sick and tired of idiots pretending they have invented something profound and then making billions. If nothing else it sets a bad example for humanity.
Good luck
Fascinating idea
I know no pot of money
Well, here we all are, sat at our PC’s/Mac’s or holding some portable skinny screen trying to not get arthritic effects as we use a finger that’s too fat to type well with.
Debates on future scenarios has been done just like this for a generation now.
In that time our collective peril from a nature based balanced system that gave us all life in the first instance, has vastly increased from ‘manageable with care’ to ‘bordering dystopian’.
Yet only words to ‘fix’ that are used in place of actions, and sadly we now depserately need a lot of virtuous high net worth humans that hold influential political & policy power to make massive changes for us because previous elections of the wrong people into public office world wide has made it so that nothing but collapse is ahead with them still at the wheel.
So to me its not so much to discuss the future of I.T in isolation but as the writer has endeavoured to do, the future of the entire human systems complex.
Markets, land control, AI, social media etc are all just sub components of the whole, & it is that disorganised whole’s future that is at stake!
Did have in mind something similar to OpenEMS?
https://github.com/OpenEMS/openems#readme
Looking to the future is a fascinating thing and with 3 children all aged 11 and under seeing their thought process is fascinating.
They have grown up with:
1) entertainment on demand (they wanted to watch a live event and were confused that they had to wait for it to start) and a far higher number of adverts than I would ever be willing to put up with.
2) things being provided for free (well its not free, they pay for it by watching adverts) and then complain if they have to pay for something.
3) being misled in so many different way (its free but pay a huge £X for delivery, next day delivery but takes 2 weeks to come from warehouse and then next day delivery, this influencer says it amazing when actually it is cheap and badly made)
As a parent I am trying to instil them with a repair and made do attitude, a save up and buy something that will last, time limits on tech etc. but I fear I am losing the battle.
So far, 2 out of 3 want to be social influencers as their career of choice (with the 3rd wanting to be a singing vet doctor teacher)!
The consequence being I have no idea how the future will look but I am seeing no backlash to adverts and being manipulated by tech…
Mine are older
Like many of their age they do not accept the world needs to be the way it is
Why should they?
Back in the 80’s mail order companies would sell the goods very cheaply and charge over the top for postage and packing. The reason being that VAT could was chargeable on the goods but not on the p&p. But, if you were VAT registered you could still claim back the VAT on whatever you spent on packaging materials. I‘m not sure how legal it was but I do know a lot of companies did it.
There are now rules that attempt to tackle such abuses
It’s a point worth pointing out – all you are doing is showing were the next area of growth is going to be and pointing out the benefits.
And boy, do we need them.
The revolution in consumer-facing tech has only just started. The inflexion point is working AI and it is upon us.
Maybe
I am not entirely convinced
Do you know the work of Rethink X? https://www.rethinkx.com/
Their Rethinking Humanity work explores how much further the IT revolution has to go and the epoch changing results for societies. Fascinating exciting and terrifying, above all unsettling! I think you might enjoy it.
I just had a look at RethinkX first page. I note THE MOTLEY FOOL, JUNE 2017 comment: “It’s not easy to blow my mind. But earlier this week, I sat down and read a research report by RethinkX. I’ve been picking up the pieces of my consciousness ever since. I’m now convinced that I — and you — will probably never buy another car again. Ever.”
It’s near the end of 2022 and that statement is clearly wrong. I am all for fewer cars with a move to other forms of transport as well as less driving about. However, who decides that our lives should be decided by whatever technology someone invents and promotes? Is it truly solving our basic needs? Why can we not resist it if it does not suit us? There are children still dying in massive numbers for lack of clean water, surely we could have fixed that by now. In the UK there are places being flooded, people with messed up homes and possessions. I remember my thoughts in 2003 when Tony Blair said how we would rebuild Iraq into a wonderful country – meanwhile York in the UK was flooded. I will not put my thoughts here least Richard deletes my post. I looked at the page “Rehinking Humanity” and saw “For the first time in history, we could overcome poverty easily” – but this has never been much of a technology issue but a lack of feeling and love for our brothers and sisters on the planet; without that tech will just be used by the pwerful to maintain their power.
We could indeed solve so much
That makes the current US moonshot so annoying – what a waste of resources that could make such a difference to life on earth