yeah that’s a good explanation why there’s only a very small number of software companies in the world. google, microsoft, apple, meta. the reason is because, when you have two cars, that’s twice as much as one car. but when you have 2 apps, that’s worth exactly as much as having 1 app.
consider this: scenario 1: one big company writes one calendar app that everybody uses. scenario 2: there’s two medium-sized companies writing calendar app, that share the users. Which is better?
two companies -> twice the fixed cost (writing the code twice for no reason). two database protocols -> incompatibilities, so users sharing data with each other becomes more difficult, for example for group calendars where events are distributed to the app that the user already has. this is also called “network effects”: removing boundaries by everything being on one platform.
downsides of monopolies: one company might have too much market determining force. no competition, therefore difficult to evaluate what would happen if things were done differently.
that’s why there’s no second search giant besides google. for mobile and desktop operating systems there’s two, probably to have some competition (android/iOS, windows/macOS).
meanwhile there are no such monopolies for car companies, because if you build twice as many cars, then you have twice as many cars. so competition pays off.
There are many more software companies in the world then those four, including very small ones. It is still possible to make a reasonable living as such a small software company, though a lot harder than it used to be.
yeah that’s a good explanation why there’s only a very small number of software companies in the world. google, microsoft, apple, meta. the reason is because, when you have two cars, that’s twice as much as one car. but when you have 2 apps, that’s worth exactly as much as having 1 app.
consider this: scenario 1: one big company writes one calendar app that everybody uses. scenario 2: there’s two medium-sized companies writing calendar app, that share the users. Which is better?
two companies -> twice the fixed cost (writing the code twice for no reason). two database protocols -> incompatibilities, so users sharing data with each other becomes more difficult, for example for group calendars where events are distributed to the app that the user already has. this is also called “network effects”: removing boundaries by everything being on one platform.
downsides of monopolies: one company might have too much market determining force. no competition, therefore difficult to evaluate what would happen if things were done differently.
that’s why there’s no second search giant besides google. for mobile and desktop operating systems there’s two, probably to have some competition (android/iOS, windows/macOS).
meanwhile there are no such monopolies for car companies, because if you build twice as many cars, then you have twice as many cars. so competition pays off.
There are many more software companies in the world then those four, including very small ones. It is still possible to make a reasonable living as such a small software company, though a lot harder than it used to be.