The 2020's started off with a bang.
Except it did not start with the type of bang that most people expected. Due to the whole coronavirus (or COVID-19) situation, the world economy has been affected negatively. Many businesses have shut down, some nations are in total lockdown, and things are not looking bright as I write this post. In fact, in Canada alone, over 500,000 Canadians applied for Employment Insurance (EI) in the week of March 16. This number represents over 2.6% of total Canadian employment.
In Canada, restaurants are shutting down. Malls are closing down. It was announced that only essential businesses would remain open in Quebec. Check out Reddit.com/r/PersonalFinanceCanada, and count the number of threads inquiring about the EI eligibility in Canada. What about Canada’s greatest neighbors? Analysts from Goldman Sachs predict that a record breaking 2.25 million Americans may claim for unemployment this week (week of March 23) alone.
Things are not looking good.
There are losers. There are many losers. However, there are winners. As ruthless as it sounds, wherever there are losers, there are winners. Remember your High School physics classes?
The law of the conservation of energy. Total energy is always constant. If you subtract, you got to add as well somewhere. Kinetic energy?
Yeah I don’t remember my physics classes either, whatever. I had to Google the above.
I wrote an article last week on how Working From Home (WFH) is going to become the norm for businesses. However, to get there, you need to invest time and resources for the infrastructure. Many businesses have already spent the 2010’s doing the latter, but still have not done so. I call this the “boomer mentality”, but I digress.
I’m a bull over technologies such as Microsoft Teams. I’m a big believer on Big Data, in which Netflix Technology Blog and the whole Netflix organization are mastering already. I already wrote earlier this month on how Amazon & Jeff Bezos have positioned themselves very well in the recent decade.
So who are the winners in this new economy?
People will always need goods. People can be forced to stay home, but they will need to eat and purchase goods that serve them. In my condo facility, I was surprised at how many Amazon delivery boxes I find daily in our lobby. Eating and consumption for dopamine will always be ingrained in humans — the Internet will only supplement this.
People were talking about breaking up Amazon and their Amazon Web Services business. Now, people are on Amazon.com trying to order the remaining toilet paper. Something doesn’t make sense.
Not everyone loves to stay home. People enjoy going to movies, going to their favorite restaurants, or simply going for a walk outside. However, with the fear of being affected and affecting others by the popular disease, people are forced to stay home — bored they are. As I wrote earlier this month, Netflix grows as boredom grows. Kids are not going to school, parents are forced to WFH, more people are glued to their computers, phones and tablets, and thus boredom increases.
Government officials in Europe already forced Netflix hands last week to decrease their streaming quality for the next 30 days. Need I say more about the influence Netflix has? I think this one is a obvious one.
Netflix and “quarantine”.
I think many will be surprised by this choice. However, businesses are going to need to invest more in their infrastructure. Whether that is spinning off more Virtual Machines through Azure Cloud services or deploying Teams and related applications to improve communication and collaboration, Microsoft will yield the rewards.
Nadella has done a fantastic job turning around this company in the last decade. No, they are not flashy. They are not in your Instagram stories. But they are mastering the Business-to-Business (B2B) relations. This is where the “big money” is. Read my first article on Medium about Microsoft’s dominance in the enterprise market.
Similar to Netflix, people are on Facebook when they are bored. But I think the social media amplifies this. I have a hard time believing you go on Instagram because you are truly excited to witness the art you find there.
You go on the Instagram application on your iPhone or Android smartphone because you are bored and are looking to enjoy yourselves. And the wheel goes on for Facebook. I actually think Facebook should rename the company to “Facebook Big Data”. This is how important data is for Facebook, and everyone in 2020 knows this.
You can promise yourself to read X number of books during this epidemic, but the truth is you will find yourself on Facebook.com, Instagram, or texting your relatives on WhatsApp or Messenger.
Most people are sleeping on this giant. Sure, it’s a Chinese company. But it’s also the company that has M&A very well in the recent years. Besides their duopoly (along with Alibaba) in China over social media and communications, the company owns one of the most (if not the most) popular online esport videogame: League of Legends. On top of this, most video games on mobile have some sort of affiliation with Tencent.
Tencent is like the Nestle of the digital world. They are in everything. (P.S. I dislike Nestle and have boycotted them for the longest time.)
Kids are on “coronavacation”, and that means more “League” or video game time for them. Can’t blame them, if I was their age I’d do the same.
The NBA and NHL are all suspended as I write this post. However, leagues from League of Legends have been playing since last week remotely. We knew esports would grow tremendously, but did you expect traditional sports leagues to be on hold while esports are resumed?
Honorary mention: Activision Blizzard.
One word: Youtube.
Honorary mention: Activision Blizzard.
We are in a new economy. We’ve always had the above companies in our lives. But I don’t think we fully “appreciated” how important they are. Today, we do — and this trend won’t stop this decade. Buckle up, because these companies are going to the moon.
Or not. Either ways, they are going to profit from these chaotic times.