Silicon Valley: The King Is Dead, Long Live the King

Change is the only constant. That pearl of wisdom has been drilled into us with varying degrees of fervor for the past twenty years. It was supposed to excite us with the possibilities the future held, but its proponents forgot to mention the pain it would cause to many along the way who got caught on the wrong side of whichever technologically-induced business upheavel it heralded. There is some evidence to suggest that we are witnessing the beginning of a third wave of revolutionary development in tech and its related strategic partners. How significant or lasting these will be. In his blog GigaOM, Om Malik shares his vision of where we have been and where we might be headed:


"The early 1990s, especially before the launch of Windows 95, were a time of big changes in tech land: the continuously shifting market share of operating systems — Apple versus Windows, IBM and its OS efforts — the jostling for top position, the fallen heroes and new stars. From a writer’s perspective, it was a glorious time.

Then came the late 1990s: the dawn of the Internet era. Once again, there was a battle for market share, as thousands of web companies of all hues vied for consumer attention: Netscape versus Internet Explores, AOL versus CompuServe, Internet versus everything. For a few years, Silicon Valley was a land of greed, glamor and confusing change.

These were but two major seasons of change (and thus confusion) that I’ve experienced firsthand as a chronicler of the business of technology. Now, we’re going through a similar period, when a whole lot of activity is distracting us, masking what is really happening when viewed from a larger landscape.

In 2005, if you asked me if Microsoft and Nokia would ever join in wedlock, I would simply have walked away the conversation. But desperate times call for desperate measures. In 2006, it was hard to imagine that Facebook was going to be worth $50 billion and Twitter worth $10 billion; yet today, they stand as twin pillars of a new web, jostling for supremacy with Google.

Today, we have new platforms for the web (Google, Twitter, Facebook) and for mobile (Android, Apple’s iOS), powered by Internet-hosted infrastructure (cloud) and stitched together via programming interfaces and open-source software. For GigaOM readers, this confluence of broadband, cloud-based infrastructure and always-on, anywhere computing is not a surprise. We’ve been writing about this coming change for nearly half a decade now.

These events have created a salubrious environment for startups. Hundreds of new startups are born every month, getting funded and hoping to become the next YouTube. Investors, typically a cautious lot, are getting upended by a new breed of independent punter — angels — who are willing to back dozens of risky, and sometimes flimsy, ideas.

If the startups are getting all the attention from early-stage investors, larger, public-market investors are also looking at the technology sector in 2011 to make money. It’s rather simple: The rest of the economy is laboring, and traditional investment sectors are hardly moving the needle. Institutional investors are looking at technology as a savior. The trading of shares of Facebook, Twitter and other private companies on private exchanges is a sign of speculative fervor among investors. It isn’t a surprise that companies like LinkedIn and Pandora are looking to raise money from the public markets.