With the hot heels of Apple whipping past the energy giant Exxon Mobil to become the most valuable business in the world, there appears to be another shakeup a bit lower on the radar screen which isn’t getting as much press. As Big Blue, yes IBM is now the second-largest tech company by market cap just behind guess who? That would be right, Apple and nudging out just by a hair that venerable stalwart of Redmond Washington, Microsoft.
This is the first time in 15 years that the likes of Big Blue is standing taller than the folks in Redmond (you the know that company who talked IBM out of MS-Dos). As the clock ticked over at the turn of the millennium (wow! That’s been over a decade ago), Microsoft’s market cap was pegged at three times the size of IBM’s leaving them a bit blue in the face as it topped out at a whopping $600 billion at the peak of Microsoft’s powers. Coincidentally that was also the apex of the dot-com bubble and it surely ain’t the same any more as things have changed since then.
While neither IBM nor Microsoft could hold a candle to the recent growth spurt of our Cupertino friends at Apple, which passed IBM’s total value a mere two years back and then leap froged the bald head of Steve Ballmer at Microsoft’s in the summer of 2010.
However in the last five years, IBM’s market cap has nearly doubled yet the Redmond Microsoft clan as gone the other way by dropping get this an amazing 30 percent, is there a message here? While clearly there were times when this nip and tuck position flipped back and forth it looked inevitable that with its service and hardware platforms that the blue-ness would in the end yield black as in ink.
However in fairness to Microsoft, they had their time in the sun, back in the day when Apple didn’t seem to matter and CD players where all the rage. However what is interesting is that money can be made in services and the value of software is likely to go the way of the PC down commoditization alley.
However it’s also clear that dominant technologies turn over about 3.5 years (trough to peak) so we are looking at complete cycle time of about 7 years. What does that mean, well in a about a year or so its time to start shorting Apple, as yes the steam is running out as how much more revolution can they drive before it just becomes repackaged evolution?