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Section 03
Thought Leadership // TECHNOLOGY
THOUGHT LEADERSHIP
TECHNOLOGY
Across categories
brands say they’re
in technology
Judge what they deliver,
not what they claim
Julian Tanner
Global Technology Leader
Cohn & Wolfe
Julian.Tanner@cohnwolfe.com
Cohn & Wolfe, a global communications agency,
builds brands and corporate reputations by
uncovering fresh insights that lead to relevant,
unexpected ideas that engage and motivate
stakeholders. This forms the foundation for
integrated campaigns that foster trust, inspire
action and deliver measureable business success.
www.cohnwolfe.com
When is a technology brand not a technology
brand? This should be a pretty simple
question to answer (clue: the brand does
not do technology), but it’s not quite that
simple. Like the crowd of rebellious slaves
on an ancient Roman hillside shouting,
“I am Spartacus,” many brands across
multiple sectors are yelling, “we are tech” in
a bid to reap the rewards that go with the
classification. Some brands are clamoring to
get into tech from the manufacturing sector,
some are online retailers or property services,
some are old fashioned financial services or
information businesses that hope to transform
themselves through recategorization.
So why become a tech brand? There are both
hard and soft answers to that question. The
hard answers start with valuation and the
simple observation that while the average
NASDAQ 100 stock has a P/E multiple
of 25.2, the average Dow Industrial
company has a P/E of 16.55. So from a
CEO’s point of view it is pretty easy to
see which sector you would like to be
in. The soft reasons are related to the
cleanliness of image that surrounds
technology companies. By surrounding
themselves with the aura of innovation,
a brand can look sharper and more
purposeful - making its products more
attractive, benefitting recruitment and
encouraging investors.
Identifying the
real tech brands
A 2014 study by PwC and Bloomberg
showed that seven of the top 10
companies by value are technology
firms, as are four of the top 10 fastest
risers. Eight of the top 20 companies
listed in the most recent Forbes report
on the world’s most valuable brands are
technology firms, although interestingly
it lists GE as “diversified” while the
PwC / Bloomberg report categorizes
it as “technology.” And perhaps most
importantly, in the BrandZ Top 100
Most Valuable Global Brands 2015,
five of the Top 10 fastest risers are
technology brands: Facebook, Apple,
Intel, Tencent and Baidu.
Given the rewards, the desire to be
seen as a technology company is quite
understandable. But we should be able to tell
the real technology companies from those
masquerading as such. Well, it turns out that
the clue mentioned in the first paragraph here
doesn’t actually help much. Any company
in any sector today uses technology in a
very profound way. I once heard the Vice
President of IT at Morgan Stanley pronounce
that his firm was a technology company that
happened to focus on financial services.
Which raises the question: is a bank a bank
because it has branches and people you
can talk to, while an online bank becomes
a technology company – or are all banks
technology companies? And could we really
countenance eBay being classified as an
auction firm when it is so palpably clear that it
is a deep technology company?
But in this ever-widening morass of brands
claiming to be tech, there are clear divides
between say an IBM or HP, whose very core
is technology and the applied technology
through a digital service of LinkedIn or Netflix.
At the same time, the old labels of software
and hardware as sub-divisions of technology
no longer hold true; Apple, a supposed
hardware company, is differentiated by its
software, while one-time software specialists
Oracle and Microsoft have bridged the divide
into hardware.
Three new categories
add clarity
To provide meaning to the over-generalized
category of technology we need to break out
three new categories that will enable crosscategory
analysis and restore some purpose
to the brand valuations. The right structure
for this is the division of technology between
infrastructure, devices and data services, as
follows:
• The infrastructure companies are clearly
delineated and sometimes dismissively
referred to as “old tech.” These are the
IBMs and HPs, the Dells and Oracles. They
make the systems that make the world
spin, and much like the men who sold the
shovels to the gold miners, they tend to
make the money too.
• The device players arise from multiple
origins; out of consumer electronics
companies like Samsung and LG, from
PC companies like Apple and Lenovo, and
from left field with the likes of Amazon. All
bring a unique interpretation to this sector
and the competition that they engender
has been massively beneficial to the
consumer.
• The data services span a far greater divide,
from the enterprise players such as
Equifax and LinkedIn to the consumer
plays of Facebook, WhatsApp and
Pinterest. All these companies are
monetizing the need to consume data
whether it is a corporate credit report,
a message or a birthday reminder. The
fact that these companies are marketing
from the consumer youth markets all
the way to the biggest enterprises, and
with very different business models,
does not stop them from actually being
in the same category.
Meaningful
peer groups
While we can apply categorization
across all technology companies, it is
interesting to note that very few, such
as Dell, are attempting to be in two
categories (devices and infrastructure),
while others like IBM have gotten out
of one category (devices) to focus
exclusively on another (infrastructure).
Most intriguingly, there are just three
companies attempting the tripleplay
of being in all three categories
simultaneously; Google, Apple and
Amazon have stakes in each market and
each is clearly determined to be the one
cross-category giant in future years.
By looking at the technology market
through these three different lenses
we may be able to make sense of the
brands crowding in and be able to evaluate
them against a relevant peer group so that
we can meaningfully compare growth,
profitability and brand momentum.
So when we look at the mire that is the
technology market today, the answer is not to
try and discern the tech brands from the nontech
but to understand that practically anyone
can be Spartacus these days. Instead we need
to place finer definitions on what we mean
by technology and judge companies through
what they deliver and not what they claim.
54 BrandZ Top 100 Most Valuable Global Brands 2015
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