The eulogies for the corporate conglomerate have been pouring in fast. But in fact, these monsters of modern business are now bigger, more powerful and perhaps more world-consuming durable than ever—they also look very different than in the past.
The dismantling of General Electric, Toshiba, Johnson & Johnson, Siemens, Dow DuPont, United Technologies and other sprawling business empires in recent years has been heralded as the end of the conglomerate and the demise of the idea that brilliant management teams can succeed operating in very different industries. But just as those giants of traditional industry are being dismembered, today’s tech giants have arisen as latter-day conglomerates—what some even call Neo-conglomerates. They boast valuations bigger than any other companies in history, and have diversified their businesses through acquisitions and new start, just like conglomerates of old.
Amazon, the $1.8 trillion do-everything-for-everyone company, operates online and bricks-and-mortar retail stores, sells outsourced computing services, runs a global logistics operation, produces movies, provides a social network built on streaming, dominates smart speakers, peddles home security services, aims to launch a satellite network, provides healthcare services, and last year acquired Zoo x, a self-driving car company.
Microsoft, worth $2.5 trillion and battling Apple for the title of America’s biggest public company, sells business software, video games, outsourced computing power, runs a social-media service where it sells ads, and hawks gadgets, among other things.
Smartphones, laptops, wearables, advertising and self-driving vehicles are now in the works or on the market from both Google-parent Alphabet and Apple.
Even Facebook -parent Meta, which is diversifying its business from monetizing human attention through its apps to doing the same through an all-consuming “metaverse,” seems to at least be trying to turn itself into a conglomerate, making virtual reality headsets, offering smart glasses and attempting to run a marketplace.
Management case studies that once focused on GE and its legendary Chief Executive Jack Welch now are more likely to analyze the actions of Amazon and its founder Jeff Bezos or Apple and its CEOs Steve Jobs and Tim Cook.
The corporate passing of the torch has been in the making for decades. But this month punctuated the transition, with GE, Toshiba and J&J all saying they would split apart in an attempt to get leaner and more efficient. The same week, Amazon boosted its investment in electric truck company Rivian, which went public Nov. 10 and now sports a market cap roughly on par with GE.
But there are important differences between today’s tech conglomerates, which continue to grow in value and scope, and those of yesteryear, say those who study the history of the subject. The way today’s big tech conglomerates glue their products together into “platforms” makes them potentially much more dominant and long-lasting than the industrial conglomerates. In those older conglomerates, sibling businesses weren’t nearly as interconnected or mutually supporting, and instead vied for investment from their corporate parent.
“For Apple, all of its products are plugged into this one platform,” says Kim Wang, an assistant professor of strategy and international business at Suffolk University’s Sawyer Business School. “How could you ever divide up an Apple —it is like cutting an egg in half,” she adds.
Doctor Wang defines a platform company as one in which all services rely on a common infrastructure or are otherwise intimately interconnected.
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