The hyperscaler ecosystem
Success and fame are becoming ever more fleeting, from celebrities to companies. Change is moving too fast. 46 times too fast to be more precise.
• 3 minute read
Data from financial research institutes like Innosight and CB Insights shows that corporate lifespans on the S&P 500 have plunged from 61 years in 1955 to under 20 years today. The average lifespan dropped to roughly 30 years by the 1980s and has since shrunk to under 18 years. Market analyses forecast that rapid technological change and corporate churn will continue to replace a vast majority of incumbent public companies through bankruptcy or acquisition.
Zombie companies - businesses that cannot cover their interest payments from their profits but manage to stay afloat through borrowing or refinancing - have been surging by nearly 9% annually, with thousands identified worldwide.
“Celebrity” has been turbocharged by the digital creator economy, mega influencers and attention too. Studies tracking "celebrity capital" define distinct, shrinking windows of acquisition, rapid consolidation, and fast-paced public fatigue or decline.
Impermanence is looking a lot like ephemerality.
Except hyperscalers. Hyperscalers dominate—they are able to starve and kill their marketplace, making the longevity of promising, disruptive new companies harder than ever to predict.
The “SaaSpocalypse” has rocked businesses that most thought had very deep roots.
Even “Unicorns” have withered. Private market peaks from the venture capital boom left many tech firms with lofty valuations that are difficult to justify in a shifting macroeconomic climate, with inflation and compute being key pinch points.
Imagine hyperscalers as a fir tree forest.
Verdant green on top, with everything underneath barren and lifeless.
Fir trees are long-lived canopy dominants. They retain dense evergreen needles year-round that shade out the forest floor.
Despite having shallow roots, fir tree needles are acidic. They acidify the soil making it almost impossible for most plants and animals to inhabitate.
Any other vegetation must have the same acidic tolerance and mimic their environment to stand any chance of breaching the sunlight.
You might think of that as nature's own "fake it til you make it".
The only way to change this ecosystem is to punish the hyperscalers by starving them of sunlight as much as you can.
Since they've captured enterprise and investors in their canopy it almost doesn't matter what normal people do for the next few years.
That shouldn’t prevent action. Nothing worthwhile is easy.