Denis O’Brien, the billionaire owner of Digicel, a Caribbean Mobile Operator with 13M customers, recently stated that “Mark Zuckerberg is like the guy who comes to your party and drinks your champagne, and kisses your girls, and doesn’t bring anything”. We disagree with Denis because he’s way too positive. It’s not only Mark, its GAFAN, and the girls are the Miss Universe contestants, and the party is happening at Denis’s own home.
The Financial Times coined the term GAFA, however, they did leave out one powerful company from the group “Netflix”. GAFAN, as in Google, Apple, Facebook, Amazon and Netflix is the most dominant group of Internet businesses the world has ever known. GAFAN is as revolutionary as the five fellas (Rockefeller, Carnegie, JP Morgan, Vanderbilt, and Ford) that built the American industrial machine a century ago. Apple is the first company to ever challenge the dominance of wireless carriers, followed by Google. Its only a matter of time before the other three join Apple and Google in some form or another. Why? Because the company that controls the last mile (in carrier speak) controls the customer experience.
Business industry revolution works best in five
- Early 2000’s: GAFAN – Google, Apple, Facebook, Amazon and Netflix
- Early 1900’s: Henry Ford, Andrew Carnegie, JP Morgan, Cornelius Vanderbilt, and John D. Rockefeller
What do GAFAN members have in common
- Built their own global content delivery networks
- B2C companies disrupting the B2B industry
- Control the end user content
- Built content management platform to deliver their content
- Don’t play by the corporate rules
- #1 market share leader in their respective industry
- Top R&D in their business segment
What has GAFAN accomplished
- Apple’s $36B revenues in China is more than any other Chinese tech company
- Netflix has 60M+ subscribers globally. Some analyst predict that will jump to 150+M. However, there is no reason Netflix can’t have 500M subscribers or more in a few years
- Google developed SPDY and HTTP/2, two major Internet protocols, and the world has no choice but to follow
- Amazon is the new General Electric of the Internet, dominating cloud services, online retail, and participating in a dozen more industries
GAFAN’s influence on the global economy is so dominant that the European Union plans on introducing telco legislation to protect local industry, some monopolies, and the like. But as we found in the US, it’s difficult to regulate emerging global Internet companies whose products are superior to legacy products, and where in some cases they’re free, like WhatsApp, Facebook, Snapchat, and search. The billion dollar question is how can incumbent players counter the GAFAN threat? It starts with R&D – that is radically different than what companies are use to doing, and the more ridiculous, the better; Google driver-less cars, Google glasses, etc. It’s not only the end products that are important, but the lessons learn, because if the products are losers, the knowledge can be used for other purposes.