Tech sector flourishes thanks to homeworkers and YouTube

September 20, 2021 by No Comments

The corona pandemic continues to boost the tech sector, even in the second year of the global crisis. The figures for the first quarter of 2021 that Microsoft and Alphabet (Google’s parent company) presented on Tuesday show that the American tech sector is still taking full advantage of the masses of homebound employees and streaming video viewers.

Microsoft doubled the number of users of Teams meeting software in a year. There are now 145 million people who consult via Teams every day, with or without video. By comparison, the largest competitive meeting software vendor, Zoom, has more than 300 million daily users. Zoom’s share fell slightly after Microsoft announced its Teams growth spurt. Last week, Zoom set aside $100 million to encourage collaboration with other apps to offer more than just online conferencing. Microsoft Teams has already built-in integration with other Office products, such as Word or Outlook.

Microsoft’s quarterly revenue increased by 19 percent compared to last year to 41.7 billion dollars (34.5 billion euros). Net profit came in at $15.5 billion, 44 percent up on the same quarter in 2020. Microsoft’s fastest-growing arm is the Intelligent Cloud division, which generated $17.7 billion in revenue; a growth of 23 percent. Azure, Microsoft’s version of rental computing power, even grew by 50 percent.

Building data centers

Satya Nadella, CEO of Microsoft, is confident that growth will continue. “Digital adoption has only just begun,” he said in a commentary on the numbers. Microsoft plans to build 50 to 100 data centers each year to keep up with the growth.

Google’s parent company Alphabet also presented favorable quarterly figures on Tuesday. In the first three months of the year, Alphabet achieved a turnover of 55 billion dollars (45.7 billion euros), 34 percent more than before. Earnings: $16.4 billion, up 162 percent from the same period in 2020.

That big difference is due to a dip in the advertising market when the pandemic broke out in early 2020. Advertisers have now found their way to Google and its subsidiary YouTube again, CEO Sundar Pichai said.

YouTube ads brought in about $6 billion in the first quarter of 2021, thanks in part to direct response, an advertising technique that directs viewers to a product to buy more quickly.

According to Pichai, many people used the corona crisis to learn new skills through a course on YouTube. That would bring YouTube more viewers in the group of 18 to 40-year-olds than linear TV channels. Younger audiences, who like to watch short TikTok videos, hope to keep YouTube with Youtube Shorts. 6.5 billion of those short films are viewed daily, Pichai said, twice as many as last quarter.