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12. July 2021

Platform economy - Situation Report

Europe wants to - but can't. The third and final foundational wave (2015ff) is now essentially complete planet-wide. The first planetary consolidation wave is underway. DEIX's Original Platform Fund (WKN/ISIN (Institutional): A2QJLG / DE000A2QJLG5) selects 25 out of 1500 observed platform companies (see 2021/07/12). This allows European investors to participate without European companies. Africa is doing the same. This is a last follower strategy.

We stick to our statements that we assume an order of magnitude of about 100 companies as planetary needs. So that is already 1400 companies too many. The turnover per year per platform reaches then on average accordingly 3 trillion USD. The worldwide GDP is expected to reach 93.8 trillion USD in 2021. The velocity of circulation of money of 3.x (Germany 3.2) indicates 279 trillion USD annual planetary turnover. The figures are without PPP correction.
Amazon will reach the USD 3 trillion revenue limit immediately after the next recession (2027 or 2028) in 2028 or 2030 at the latest if it maintains its current growth path. Alibaba will be the first company to reach this limit already in the first half of 2024; followed by Tencent and the Indonesian GoTo Group (Gojek and Tokopedia).
Facebook, Apple, Microsoft, Google and Naver (Line) still have considerable homework to do on their business models. A forecast is therefore much riskier.

European providers are meaningless and will at best be among the consolidation victims. The government initiative Gaia X appears to be a communist rescue attempt. The author does not believe that communism is a promising answer to a successful global market economy. The approach is well-intentioned. But we know how the market economy versus centrally planned economy race turns out every time.
The current issues at Gaia X are who else is allowed to participate in the committees. The European Union in general has a reputation issue. Of its original four thematic mandates, three have never succeeded and the European single market - THE success story - is obsolete in the face of planetary placeless markets. The platform economy has long since overcome country barriers and national islands of law in a market economy. The economy is ready for Mars and so are Elon Musk's Space X rockets.
Current developments in Europe paint a clear picture: the market as an entrepreneur and strategic player has been missed, and now the task is to save what can be saved. The recognizable strategy is participation - joining in nowhere - a last follower strategy: the capital investors via funds and the like; the states via a new tax model (cf. G20 resolution); the large companies via outsourcing of IT to the platforms and building their IT architectures around a predefined cloud core - be it Microsoft, AWS or Google. And in the midmarket, the Apple Core is widely used with allies Slack and Zoom.

So where is the problem?

AI Advanced Information helps large enterprises optimize IT both economically and technically. This includes, in addition to classic activities, the design of the architecture regarding hundreds of applications and about 300 infrastructure components around a set cloud core. Do we still need Riverbed and 2,300 other questions?
In the area of platforms, we develop products with partners. Platform consulting has been discontinued in 2017 due to insufficient day rates.

Legal Note: This article is for informational purposes only and does not constitute investment advice.
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