Is Decentralization the Secret Behind Google’s Success?

Although companies like Facebook, Google, Amazon and other big tech companies keep getting accused of monopoly and are constantly under review by the anti-trust law, the fact is they remain the most successful companies in our era and business analysts have argued that although it is possible for platforms to shift and giants to fall, it is highly unlikely for companies like Google, Amazon or Facebook to fail. The question is WHY?

Photo by Rajeshwar Bachu on Unsplash

Decentralization is the act of distributing the power of a central authority. But in a contemporary business application, the term decentralization is mostly applied to franchising as made popular by the popular restaurant, McDonald’s or by hotels with their chain services.

However, as the world got more digital and software became the more applicable term for the word ‘product’, the concept of decentralization also began to evolve; nowadays the concept of decentralization is still in play but in more dynamic business models with the most recognizable application of the term found in cryptocurrency or Decentralized Finance(DeFi).

In this article, in addition to decentralization with respect to cryptocurrency, I will engage the other dynamic form of decentralization that is behind the success of the big tech companies and show why the success of business in the 21st century is decentralization.

The Revolutionary Business Model?

This article is not really about what business model will work when adopted but more about how the common theme of successful businesses in the 21st century is built around a business model that centres around the concept of decentralization and how we can capitalize on it.

Although companies like Facebook, Google, Amazon and other big tech companies keep getting accused of monopoly and are constantly under review by the anti-trust law, the fact is they remain the most successful companies in our era and business analysts have argued that although it is possible for platforms to shift and giants to fall, it is highly unlikely for companies like Google, Amazon or Facebook to fail.

The question is why?

Why should single entities be so powerful that their power is even a threat to the USA government? The secret behind their power is decentralization and I would show you how.

“Google it!”, is a popular comment to either tell someone that they are being lazy for not searching for their answers online or when you’re just being rude, but either case it points to the reliability of Google as the world’s best search engine, however, we do not pay Google when we search Google, so we have to wonder how Google makes money, well, Google makes money by selling their power; they changed the world of search, they aggregated all information and made it easy for users to get info on anything you want and became the most reliable for that service, but most importantly, they allowed people and businesses to be more visible, they allowed you and your product to be easily seen, if you were a startup or any other company just like Google, anyone can find you, they made it possible through many tools like the Google ads for you to reach more audience and tell people about your products.

Hence, Google helps autonomous businesses build more audience while revolutionizing search and information, they simply decentralized the power they have. You can argue that this is just a contemporary B2B business or an Enterprise Resource Company, but even if we didn’t consider other services Google has ventured in after their initial model, you can’t still compare Google to any other successful SaaS company like Slack(although this article acknowledges the effectiveness of the slack business model even in relation to decentralization) because the latter, even though, they serve other companies to help them maximize their operations, they can’t be compared to Google because anyone can use Google, including their competitors and the Google model can’t refuse anyone to use their platform, unlike slack in which their direct competitors do not see any reason to use slack since they can just use their own Enterprise resource software in-house but Bing(a search engine) has to pop-up when you search Google even thou they are a direct competitor, in fact the entire Google model is built around Bing or apple store(a Google store competitor) popping up when you search for info about them on Google.

It sounds complicated but as I show the same pattern with Amazon and Facebook you’ll get the decentralization of power that these companies have used as a means of superior success(once again the usage of ‘superior success’ is to show that the level of decentralization is correlational to the level of success as compared to the decentralization adopted by a company like slack, hence, I acknowledge slack as a form of decentralization as the concluding part of this article would clarify) they simply built platforms that can only be successful when their customers are successful even though these customers can be direct competitors.

The same applies to Amazon, we ask the same question, would the e-commerce giants be successful and powerful without the other businesses that trust them and become successful through them? Obviously, the answer is no.

Amazon Web Services (AWS), its eCommerce services and other revenue channels, all operate with a platform status mechanism by helping facilitate services between other service providers and their own customers. AWS helps businesses host their software companies for reasonable fees on its cloud as they go on with their businesses, and although some e-commerce platforms are reluctant to use AWS to host their platforms as Amazon are a direct competitor, the fact is they are welcomed on board to use the AWS- the most popular cloud service presently — if they wanted to, Amazon basic business model remains successful as long as other businesses use them as drop shippers or leverage on their fulfilment centres.

Therefore, they don’t just help businesses be productive, their entire business model is entrenched in the success of other businesses, they are powerful as long as other businesses are powerful. However, you and I use amazon because of their delivery service, which is the ultimate power amazon has before giving other businesses the platform to leverage it for profitability.

The same can be summarized for Facebook also, Facebook makes its money from advertisement, but Facebook power is in the user experience they gave everyone on planet earth, I can connect with my friends in different languages, engage groups and people with similar interest, that is Facebook power, but they didn’t hold on to this power, instead they decentralized this power and enabled anyone to engage users of Facebook via ads or other business tools. Therefore, Twitter, a competitor to Facebook can leverage the Facebook tools designed to help businesses optimized the Facebook user feed to even knock Facebook out of business.

Blockchain and Cryptocurrency

This is presently the most common application of decentralization in technology. Blockchain act as a decentralized system for recording and documenting transactions that take place involving a particular digital currency, it guarantees the security of the transactions and the participants yet still maintaining the independence of operations from a central authority; it gives every user of the technology absolute autonomy by giving everyone equal power.

The application of Blockchain technology is most renowned in the area of finance with the technology at the core of the success of digital currencies like Bitcoin and Ethereum. However, the technology and its subsequent currencies are yet to receive general acceptability and validity from governments all over the world because it supposedly a threat to well established Fiat currencies.

However, gradually, Blockchain is becoming acceptable all over the world as citizens all over the world are beginning to adopt the technology even for everyday transaction and commerce. The major benefit of Blockchain technology and the digital currencies like Bitcoin, is that firstly it remains one of the most secure technologies out there and the currencies are barely affected by foreign exchange or general market inflation, hence being very viable for cross border payments and transactions.

Therefore, building on the already outlined advantages and others that I would be highlighting, I would be showing how Blockchain technology and its corresponding digital currency is becoming a necessity for business success in the 21st century.

Uncertainties

If there was one thing that everyone has learnt in the year 2020, it’s that nothing is certain; the coronavirus pandemic changed the world forever and affected a lot of economies all over the world, there have been civil unrests in most parts of the world while other unpredicted events have shaken the world, countries have had to look within to protect themselves and as one would expect, the financial and economical market has been filled with uncertainties even as different countries all over the world suffers from a recession.

However, in all of this, we have seen an increase in the adoption and usage of cryptocurrency, firstly, because it is to a larger extent immune from the risks of the conventional market (even thou it is subject to its own risk) and secondly its cross-border advantage; in deteriorating and recessing economies, the value of local fiat currencies like the Naira in Nigeria keeps losing value with comparison to market standard currencies like the Dollar, hence, in view of this, traders and business people, have preferred to make cross border transactions in cryptocurrencies like Bitcoin, in fact, there have neem a massive adoption of cryptocurrency by millennials in Africans they seek to bypass the prevailing problems of their local currencies, tech startups in Africa — a continent which is most times behind in adopting tech solutions- have also begun to rise, with notable successes like Luno and other fast-rising crypto startups like Bitsika in Ghana and Buycoins in Nigeria.

The truth is, the decentralized nature of Blockchain technology makes it more reliable even as the world navigates through uncertain times and most people are now getting prepared for any uncertainty in the future and the best way to do that is to avoid a single point of failures and other centralized institutions or platforms because of their vulnerabilities to uncertain events.

Data Privacy and Security

Another major advantage of Blockchain Technology is its high level of data security; Blockchain stores transactional data in several databases connected through peer-to-peer nodes and ensures that no single person can access other user data.

This level of trust digitalization has made a lot of people to even advocate for Blockchain technology in various aspects of technology like identity management, e-commerce (although already being used for crypto-backed e-commerce platforms) and other aspects like electronic voting.

This clamour for better data privacy and security comes from the recent criticisms against tech companies and big data platforms, with accusations that people data are not really safe in the hands of the tech giants especially after the recent Facebook data privacy scandal.

This call for more stringent data regulations will continue, with a lot of people threatening to boycott tech giants if nothing is done to ensure that they have exclusive control of their data, and it is looking more likely that more companies may have to start adopting more decentralized technology or solutions like Blockchain technology.

No business model is perfect, and this is not an article that is here to educate on the perfect business model or to suggest that we create a Google competitor, but as the world keeps evolving into a more producer-centric place (everyone is under pressure to be ca creator of value) coupled with the recent massive successes of SaaS(Software as Service), ERP(Enterprise Resource Planning) and Blockchain platforms respectively.

And it is obvious that people and businesses are more interested in platforms that empower every user of the platform, encourages autonomy and helps every user self-actualize.

Therefore, I predict that that secret to success in the 21st century is accumulating power and decentralizing it for customers to use or creating a platform where anyone can create autonomous identities with their data secured.


Is Decentralization the Secret Behind Google’s Success? was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.