How Corona could boost “Big Tech”
Social distancing is the order of the day. This is how the world is trying to break the chain of infection and, if not stop the spread of the coronavirus, then at least hopefully slow it down. The World Health Organization has meanwhile also rightly pointed out that it is not a question of social distancing, but rather of physical distancing.
After-work beer via Skype
Thanks to digital means of communication, social contacts can be maintained without physical contact —the get-togethers now take place virtually: Video conferences are replacing on-site meetings, events are being held via livestream, and the beer together on Friday evening is now taking place in front of the laptop at home—connected via Skype.
There is no doubt about it, the corona crisis is giving digitalization a major boost. For example, Microsoft’s Platform Teams, which enables digital collaboration and communication between employees, has seen a massive increase in users. Furthermore, Zoom is experiencing a massive rise in demand for video conferencing as is Cisco Systems’ Webex.
And the boom is not likely to be a temporary phenomenon: Chinese tech giant Tencent is also convinced that the broader acceptance of digital services by the population will have a long-term influence on the population’s user behavior in future. Against this background, Chinese President Xi Jinping has reaffirmed China’s intention to push the expansion of digital infrastructure such as 5G and data centers.
Tech companies: Once the bad guys, now the good guys
Fiercely criticized until recently for their power and controversial handling of data, Big Tech companies such as Alphabet, Microsoft, and Facebook are now being seen in a more positive light: They are financially healthy and ideally positioned to satisfy the need for a better digital infrastructure. With their coffers bulging at the seams, they are in a position to invest and, where necessary, to complete their product portfolios by means of takeovers.
In addition to Big Tech, companies in the artificial intelligence, 5G, subscription economy, and Industry 4.0 segments could also be among those benefiting from this development. For investors, this could be a convenient opportunity to invest in these technology trends in a broadly diversified way rather than in individual stocks in what remains an uncertain environment.
The latest developments in the home office area have the potential to change our working life sustainably. At Vontobel, we follow this with curiosity and attention. This enables us to identify new investment opportunities at an early stage in order to participate in the working world of tomorrow.
