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August 02, 2021 - BY Admin

How Most big tech companies make money


Most big tech companies make money in just one of three ways.

It’s important to understand how tech companies make money if you want to understand why tech works the way that it does.

1. Advertising 

2. Enterprise

3. Consumer


Advertising: Google and Facebook make a major part of their money from selling information about you to advertisers. Almost every product they create is designed to extract as much information from you as possible, so that it can be used to create a more detailed profile of your behaviors and preferences, and the search results and social feeds made by advertising companies are strongly incentivized to push you toward sites or apps that show you more ads from these platforms. It’s a business model built around surveillance, which is particularly striking since it’s the one that most consumer internet businesses rely upon.


Enterprise: Some of the larger (generally more boring) tech companies like Microsoft and Oracle and Salesforce exist to get money from other big companies that need business software but will pay a premium if it’s easy to manage and easily lock down the ways employees use it. Very little of this technology is a delight to use, especially because the customers for it are obsessed with controlling and monitoring their workers, but these are some of the most profitable companies in tech.


Consumer: Companies like Apple and Amazon want you to pay them directly for their products or products that others sell in their store. (Although Amazon’s Web Services exist to serve that Big Business market, above.) This is one of the most straightforward business models—you know exactly what you’re getting when you buy an iPhone or a Kindle, or when you subscribe to Spotify, and because it doesn’t rely on advertising or cede purchasing control to your employer, companies with this model tend to be the ones where consumers have the most power.


Pretty much every company in tech is trying to do one of those three things, and you can understand why they make their choices by seeing how it connects to these three business models.