The IBM-ification Of FAANG

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Once upon a time, FAANG companies used to be the playground for the smartest engineers, inventors, and product managers. But, as these companies reach market saturation and growth starts to slow, it seems that FAANG is entering a whole new era. An era marked by bureaucratization, degrading talent, and cutthroat corporate culture. This is precisely what happened to Gen 1 tech companies like Cisco and Intel 20-30 years ago. As these companies became more established, they no longer appealed to individuals who wanted to create the next big thing. These individuals naturally moved onto Gen 2 tech companies like Google and Facebook. Meanwhile, Gen 1 tech companies were left with people who were largely there for the paycheck. It appears that this same transition is happening with FAANG as well as the smartest talent moves over to gen 3 tech companies leaving FAANG companies to become the next IBM or Cisco. This video explains the slow degradation of FAANG and the IBM-ification of modern big tech.

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Timestamps:
0:00 - The Fall Of IBM
2:18 - Degrading Talent
5:34 - Inescapable Bureaucratization
8:41 - The IBM–ification Of FAANG

Resources:

Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[AlbatrossCommando]

To be fair Microsoft has always been the odd man out as far as FAANG went seeing as how they predated all other FAANG companies by over 15 years (remember their first product was Microsoft BASIC for the Altair 8080) so it makes sense for them to act as the adult in the room.

[Shredderbox]

The absolutely bonkers bureaucratic nightmare of FAANG (and business in general) can really be traced back to the fact that we've spent decades with business "schools" churning out MBAs that amount to little more than how to recite buzzwords in a way that will signal to other people with buzzword degrees. They add little/no value to the actual process, and frequently have no actual experience beyond an MBA.

[Znerdcave]

It may be worth noting that the people in the engineering pyramid (Engineer II ~ Principal Engineer) aren't necessarily managing each other in layers. The title mostly conveys that employee's experience level, and they are still typically an individual contributor, at least at the company I work for.

[CantFightRobots]

I work at a FAANG company, emphasis oh the "G", and it just feels so lame and boring now. I really want to work in a smaller environment/company because you feel so small and unimportant in the grand scheme of the company. You're right though the stability (for now) and the decent salary make it hard to jump ship.

[codycast]

It’s funny when people think IBM is dead. They’re massive.

[squid]

I agree with what you said, but the reason people play the interview game is because these companies have absurd interview processes, so the only thing people are going to care about is getting and passing the interview, everything else about the company is secondary.

Also playing the "game" instead of doing great work for promotions is very true. I remember someone who worked at Meta would talk about how it matters on WHAT you work, rather on HOW HARD you work. If person A works less hard than person B, person A can still get more appreciation than person B if person A works on a project with visibility or a flagship product. This leads to weird team and company dynamics where it all feels fake and less cohesive. It incentivizes people to do anything they can to get the chance to have one line of code on a flagship product rather than working on impactful, but less visible stuff. I think that's more a symptom of the company being big, where everything feels more impersonal and more like a game. It's not really a surprise that a lot of employees there only care about their salary.

Also, I'm not saying all employees act like that, I'm just saying that I've heard that some employees act in a way that isn't useful to the company but results in more visibility from upper management.

[IgorMAssis]

As someone who have worked for two of those companies, you have absolutely no idea how many truths you're actually saying and how many employees have actually realized that long time ago with all the changes, layoffs, gate-keeping and lack of innovation over the years.

[moksent]

I think the IBM-ification is the ultimate form of a tech company. Like molten lava cooling down and becoming one with its environment

[Merrybandoruffians]

This is exactly why I left FAANG for a smaller company. The stagnation in EVERYTHING is astounding

[kevinf]

It's not necessarily an IBM-ification, more of a trend that happens to every large company regardless of industry. Explosive growth when it's small, then as bureaucracy is set up to handle more staff, more money, and more responsibilities it becomes more sluggish and less likely to take chances. Once a company gets large, it usually only grows by acquiring smaller, more innovative companies - exactly what FAANGs have been doing for a decade or more. Jane Jacobs covers this in one of her economics books (decades before FAANGs, except Apple, came into existence), although I can't recall which book it was specifically.

[hughmungusbungusfungus]

Just because there are ten separate titles does not mean you have that many reporting layers. As an example, I’m a manager reporting to a director who reports to the C suite. On my team I have an engineer 2 and two principal engineers. Google likely has five or six levels of hierarchy, given the size of the company.

[genstian]

A big problem is just that, you can't push the stock up if you are already super over valued with growth expectations.

[ufukonurtezel]

Isn't apple already a legacy tech giant like ibm that stood up in their legs

[Makes_me_wonder]

Facebook, Amazon and Google don't even deserve IBM-ification, considering the damage they have done to society.

[cameronkffn]

you wonder if the reason that meta is continually trying to reach for the next big thing is because the original founder is the ceo. Founders are always more ambitious and risk taking than the regular ceos of the other companies

[SC-zqcu]

This isn't just FAANG or IBM or big tech. This process happens to any complex, organized system - companies, countries, economic systems, organisms, ecologies...

[andrewwood]

IBM has been trying pretty hard in the background to invest in the future. They're been working on quantum computing and AI for a while and I recently heard they're introducing tape storage which isn't exactly new but given that we're getting closer and closer to reaching the physical storage limit of a hard drive/SSD, tape storage will likely be the way forward for big companies (namely FAANG)

[DannerBanks]

I don't think "engineer 2" and "engineer 3" indicates bureaucracy - they are just different pay windows that ultimately have the same seniority. I agree with the rest though

[viborpokupec]

Management in Google is crazy. :')

[coolman]

I used to work at IBM. their money is in sales, consulting & legacy banking now & they’re looking to pivot to quantum to get back into competitiveness. So we’ll see.