Tech is the New Oil

As an ardent follower of the tech industry, it’s stimulating to observe the vibrancy that is currently seizing the tech space. All over the world, tech companies are motivating developments, churning out innovations, and creating news in the process. Dell just acquired EMC for 67billion dollars in the biggest tech acquisition ever. That’s a lot of money! A lot! Nigeria’s 2015 budget, passed late April by the country’s parliament, was 22.5billion dollars, only about a third the worth of EMC, a relatively unknown multinational which sells data storage, analytics and cloud computing to large and small companies.But the scale of this acquisition actually says nothing about the size of EMC or the value of what it does, instead it suggests more about how tech companies are gradually stealing the stage in terms of spending, talent and grit. This used to be the exclusive preserve of oil giants.

Several decades ago, before the spread of the internet and when Madonna was still a buzzword, graduates fresh out of college looked forward to making a fantastic career in the oil companies. Exxon, Chevron and a host of other servicing companies provided good platform for career development with excellent pay. Though there had been an oil glut in the mid-80s spurred by declining consumption and a temporary surplus, the price of oil suddenly started gaining traction in the late 90s, following years of a steady ease and a perfunctory Gulf-war induced jump. By the early 2000s, just at the start of the dotcom boom, unit oil price was taking an increased kick that saw it rise to an impressive $100 per barrel. Since fossil fuels continue to be in demand, and since a large, sorry huge, number of modern-day devices have been built to dwell on fossil fuelling (think cars, generators, turbines…), oil producing and servicing companies have continued to swell their bank deposits. Until the 2015 bust.

The recent floundering of the oil rice initiated a downturn for oil and this downturn blowing like a whirlwind through the offices of major oil companies has one pea at the root of it. Heavily dependent on the oil price, oil companies must continue to adjust business assets and requirements in order to meet up. Mergers have begun with the aim of cutting down size and pruning excessive management overhead. Hence, Schlumberger’s acquiring Cameron (for 14billion dollars) and Halliburton’s acquiring Baker for slightly more than double that, none no closer to Dell’s acquisition, or of Broadcom’s acquisition of Avago. It would suddenly seem the future is looking bleak for oil.

Following the current internet boom we are experiencing, tech companies are starting to reach more users than oil might have ever done. According to Facebook, more than one billion people are active on its website; that’s one sixth of the world’s population. Twitter also claims a huge following. Nairaland & Linda Ikeji are attempting same on the Nigerian landscape, pulling users together and forming immense online communities. Many more people are connecting to the internet and it would seem the magnitude of investments possible with these numbers is yet untapped. New entrants into the tech space only need to push gently in order to realize the latent potential of these numbers. Uber, created only in 2009, Pinterest (2010) and tumblr (2007) are so young it’s hard to believe they are worth $35billion, $5billion and $1.1billion respectively. Yet, the tech space is creating more millionaires all around the world. Even in Nigeria.

Foreign players, like Rocket, and Nigerian tech enterpreneurs dabbling in the tech market are seeing the truth in the numbers. Some have made quite a fortune for themselves, growing the business; though, of course, some are still struggling to make ends meet. Admittedly a Nigerian developer is not as well paid as his foreign counterpart in Silicon Valley, but the numbers and the future portend great hope for an industry still in its nascent stages.

The future certainly doesn’t belong to oil. The future is bringing with it renewable energy, driverless electric cars and fancy robots. There are very good reasons to believe man will likely stop driving himself sometime soon. And who says robots won’t become our personal assistants? Giant tech companies Apple, Tesla and Google are realizing this. Driven to meet its ambitious car targets and intent on becoming a player in the auto market, Apple has been poaching Mission employees (another electric car company). News have it Mission has completely shut down as more and more experienced hands depart the San Fransisco Company to leave for Apple. GoogleX is gaining momentum and has continued to test drive its robot car around the US. Tesla has sold enough versions of its electric car to make any doubter believe that electric cars are indeed marketable. Whatever tech companies are doing, it’s working and it’s good business. Exxon may be ahead on the Fortune500 list, but Apple & Facebook are right behind, gaining speed.

Man is a creative animal, and the centuries have seen him pull the plug on some of his dearest innovations after some other served the same purpose better. He once replaced the fancy cart with Ford’s Model A, the then revolutionary Comet with an interesting Boeing and the ubiquitous steam engine with fossil fuels. Isn’t it only certain he will replace fossil fuels with something else? Is that something else tech? It looks probable. And if the internet continues with its gain in spread, there is huge likelihood tech will replace oil.

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