I was looking for some light weekend reading when my interest got piqued by an article that spoke about MAANG stocks. I'm usually not much into acronyms like these, but being someone who re-entered the technology field after 14 years, this MAANG thing got me hooked. So, I got to the bottom of this phenomenon.
What are MAANG Companies?
For the uninitiated, MAANG stands for Meta, Apple, Amazon, Netflix, and Google. These five companies are the "in-thing" for betting on stocks. It was initially coined as FAANG before Facebook rebranded as Meta. Long story short, technology bookies like to bet on the stock prices of MAANG companies because of their apparent market dominance and the frequent acquisitions they make. It's what the cool kids are into these days!
You might wonder why companies like Microsoft, IBM, Oracle, or Adobe are not on this list. Microsoft is larger than Google, Amazon, and Meta in market capitalization, and its stock prices are higher than Apple's. Still, it doesn't make it into the club. Why? The answer is simply that they are not considered "cool." Yeah, you heard right. The cool kids want to work at MAANG companies because they are "cool" places to work. In contrast, the whole craze of working for big tech does not fit in with the image of Microsoft and its likes, who are seen as serious organizations. Is it though?
At Microsoft, it is serious work to make businesses perform better. It spoke of a partner-centric business approach Satya Nadela resonated when he said, "You join here, not to be cool, but to make others cool." So, no theatrics like Elon Musk, no announcing cool features of new gadgets in front of frantic crowds, and no cult of futurist customers who behave like religious extremists. Only stay calm and develop solutions for business challenges. One might think that this whole enterprise software industry is somewhat dull. Is it?
Not really. The enterprise solutions industry is a thriving, growing, vibrant sector of its own. We are seeing more and more brands jumping into this segment. There's stiff competition brewing. Top players in enterprise software are giving extremely lucrative career options to young techies. There are revolutionary innovations for enterprise tech, which are often not celebrated as they do it over at MAANG. If you say those innovations pertain to a particular community of business users and are not for the direct consumer, you might be wrong. Today enterprise products directly impact the individual consumer because you must consider that any consumer is, after all, an employee or a customer of some business. Even if enterprise products are primarily seen as B2B because the purchase decision is taken by the organization and not the individual, ultimately, it is the end-user who benefits. With a growing focus on improving customer experience and employee experience, these enterprise-level purchase decisions are increasingly influenced by individuals.
Consequently, the awareness of enterprise products among the end users has also increased. I recently did a quick poll on enterprise tech brands, asking people which of the 4 (Microsoft, Oracle, SAP, and Salesforce) they thought was most desirable. It turned out that quite a lot of people had opinions about it. 50% of respondents voted for Microsoft, 21% for Salesforce, and 14% each for Oracle and Salesforce. While most of the respondents are in some way working with technologies from these companies, they prefer these tech brands in the context of enterprise solutions. In the future, I will do a more detailed study to figure out the motivations behind their preference.
There is a major push for enterprise tech adoption in the context of digital transformation. It's the buzzword! How to improve customer engagement? How to improve productivity? How to get insights from the business functions? These are age-old questions asked by enterprises. Yes, theoretically, things like process improvement and customer analysis have been academic subjects for a long time. Management studies always dealt with concepts of customer psychology and operational excellence but getting any practical outcome used to be a bastion for mostly large corporates who could indulge big consultancy firms in conducting training and surveys. Besides, software implementation used to be way expensive and time-consuming for small and medium enterprises. Now, even SMBs are taking a keen interest in modern enterprise software as implementing them has become more affordable. It seems like there might be a misunderstanding. The acronym "MAANG" typically refers to the group of technology companies known as FAANG, which stands for Facebook, Amazon, Apple, Netflix, and Google. Microsoft is not included in the original FAANG grouping, but it is often considered in a broader category of major technology companies. Some variations of the acronym include "FAAMG," where Microsoft is included alongside the original FAANG companies. However, the specific grouping may vary depending on the context or source.
Enterprise technologies have always been a reliable business for Microsoft. With the capabilities exhibited by enterprise-class low-code application platforms (LCAPs) like Dynamics 365 and Power Platforms, this market is becoming the most extensive area of competition. Even core sector industrial companies and OEMs have joined this race and are pushing more Enterprise LCAPs in the market. Google, Amazon, and Apple have their own enterprise software suits. So many regional and sector-specific players in this arena are doing quite well as SAAS-based platforms. It is estimated that by 2027 about 70% of all enterprise solutions used by companies will be based on low-code technologies. For a perspective, the global enterprise software market is about USD 236 Bn, while it is expected to grow to USD 348 Bn by 2028. In comparison, the global OTT market is at USD 45 Bn and is estimated to reach a little over USD 123 Bn by 2028.
The marvels of innovation in enterprise software are understated and can go unnoticed. Take, for instance, the recent launch of Microsoft Syntex. Did you hear about it? Perhaps not. It's a next-generation content AI which could revolutionize document management. Now, when most people hear about AI, they do not associate it with mundane things like reading through lengthy RFP documents and automatically summarizing them. It isn't very interesting but has a far-reaching impact on productivity. Think how AI-powered workflows can completely transform digital work by automatically tagging, analyzing, annotating, classifying, process, and storing documents, images, videos, and audio. Sure, it might not sound as cool as having your digital avatar, which has your actual heartbeat living inside the Metaverse, but you can bet that you'll find working in real-world offices much more convenient.
So never mind the acronyms. Microsoft remains the enterprise software market leader while expanding its portfolio into hardware with the Surface segment and gaming with the Xbox platform. Xbox is redefining gaming and merging this field with enterprise cloud technologies. It would be interesting to see the synergy developed between gaming, hardware, and enterprise technologies in the future.