How Do Big Tech Giants Make Their Billions?

In 2021, Apple, Amazon, Google (Alphabet), Meta, and Microsoft made $1.4 trillion in revenue together, making them the Big Five tech companies.

What are the resources of this income, and how is it distributed?

We’ll look at the key ways that these IT goliaths earn money, as well as how much they’ve grown in recent years, in the sections below.

Breaking Down the Revenue Streams of Big Tech

There are two major ways that huge IT businesses make income, as we’ve stated in earlier versions of this graphic:

  • Either they sell you a product or they don’t sell you anything.
  • Alternatively, you may offer yourself to advertising as a product.

Apple, Microsoft, and Amazon fit under the first type, offering consumers a tangible (or digital) product in return for money, as do most conventional firms.

iPhone sales make for over half of Apple’s income, Azure cloud services account for about a third of Microsoft’s total revenue, and Amazon’s online shops account for nearly half of the company’s revenue.

Meta and Alphabet, on the other hand, take a somewhat different approach. Rather than selling a physical product, these two tech behemoths generate the majority of their money by selling the attention of their audience.

Facebook advertisements account for about 98 percent of Meta’s income, whereas advertising on other Google products accounts for 81 percent of Google’s revenue.

However, despite their different ways of making money, these companies all have one thing in common: their profits have risen over the last few years.

The Pandemic has accelerated growth.

Despite growing unemployment and pandemic-induced disarray, the Big Five saw a large increase in income.

Big tech’s combined revenue increased by 12% in 2019 (pre-pandemic). Despite the start of the worldwide pandemic and the severe economic obstacles that accompanied it, big tech boosted its combined income by 19 percent the next year.

Big tech’s aggregate revenue increased by 27 percent year over year in the fiscal year 2021.

CompanyRevenue (FY 2020)Revenue (FY 2021)Growth (YoY)
Apple$274.5 billion$365.8 billion33%
Amazon$386.1 billion$469.8 billion22%
Alphabet$182.5 billion$257.6 billion41%
Microsoft$143.1 billion$168.1 billion17%
Meta$86.0 billion$117.9 billion37%
Combined$1.1 trillion$1.4 trillion27%

How did these businesses keep going through the economic crisis and global chaos? It was made feasible because COVID-19-induced social shifts resulted in increased demand for big tech goods and services.

When people were locked down, they had to buy things on the internet, which led to a rise in e-commerce sales. As offices closed and firms shifted to totally virtual workplaces, demand for laptops and cloud-based services soared.

Is There a Future for Growth?

Most governments have reduced COVID-19 limitations, and the world is gradually returning to normal.

That isn’t to say that big tech won’t continue to expand. In reality, the pandemic-induced changes to our work and shopping patterns are likely to persist, implying that the increased demand for big tech services is likely to persist.

A worldwide poll found that two-thirds of workers believe their employer will make remote work a permanent option.

And, over the next several years, worldwide e-commerce revenues are predicted to expand rapidly, reaching $7 trillion by 2025.

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