"The Economist" article suggested that the technology industry is undergoing a transformation - turning the era of re-investment of profits from the hoarding era. 2017, "The Economist" has calculated that US technology company's cash holding amount of "Big Five" (Apple, Google parent company Alphabet, Microsoft, Amazon and Facebook), then they total $ 330 billion in net cash ( cash minus debt). In the past, many technology companies are asset-light model, such as Jeff Bezos had to shareholders in the book in 1998, the Amazon business model described as "preference for cash, capital efficiency model," but now Amazon It covers an area of 22 million square meters, last year's capital expenditure of up to $ 25 billion. "Big Five" Today's total area equivalent to the size of the central area of Manhattan, New York.
In addition to fixed assets, technology companies in recent years has become the largest investor in the business world. According to "The Economist" the statistics, if all US companies (including public and private companies) are taken into account, the investment in the technology sector accounted for one-fifth of the entire economic investment. Only a total investment of US top ten technology companies on growth in five years has tripled to $ 160 billion, if the shares of small companies and M & A transactions is counted, the figure reached $ 215 billion. Of these, two fifths of intangible assets for investment, one third for investment in physical plant, and the rest for the transaction. "The Economist" that, in general, technology companies and other listed companies, like now, the tendency has been reinvested.
Why technology giant love so much investment? "The Economist" analysts believe that there are three reasons: First, many non-technology companies do not build their own data centers need from Amazon AWS, like Microsoft's cloud computing service provider leasing data capacity, the technology giant on behalf of these companies need to carry out business activities . Second, the line between the online world and the real world are becoming increasingly blurred. In order to meet the needs of the consumer under the line, technology companies continue extending their reach to the traditional economy, the establishment of retail stores under the line. In addition, autonomous vehicles and other projects need physical assets. Third, technology companies will get by investing in technology and data. For example, Microsoft's $ 24 billion acquisition of high-priced professional social network LinkedIn (LinkedIn).
For this transformation, "Economist" that the technology companies to reinvest their profits and achieve high returns, they become more valuable, but this approach also risks - lack of business focus, "company the more diversified business, the return on investment may be more mediocre. "