Everyone Loves Google
Google Inc. (NASDAQ:GOOG) has faced some criticism regarding privacy issues and possible misuse of search results but, for the most part, everyone loves Google. The company has an undisputed leadership position in its core search business, and its technologies like Android, Gmail, Maps and YouTube, to name a few, are amazingly popular.
It´s really easy to love a company like Google, it provides many tremendously valuable services for free, and all it asks for in exchange is that we tolerate some advertising so that the business can generate its juicy profit margins.
Google has a very specific image when it comes to its relationship with users and employees, and even its “don´t be evil” motto sets it apart from other big tech companies when it comes to corporate image. Building those amazing self-driving cars or augmented reality glasses says a lot about Google and its culture of innovation and disruption, even if it those products don´t have any financial impact for the company in the middle term.
The more we use Google and its different services, the better the company gets at obtaining and processing information. Brand popularity helps building better products; this attracts more users which increases the quality of the service. This virtuous cycle of growing brand recognition and increasing product quality means a rock solid competitive advantage for Google.
The Value of Reliability
According to Interbrand, International Business Machines Corp. (NYSE:IBM) is the second most valuable brand in the world behind The Coca-Cola Company (NYSE:KO). The company is also the second most respected global corporation behind Apple, according to Barron´s magazine. International Business Machines Corp. (NYSE:IBM) has been around for more than 100 years, and counts each of the Fortune 2000 companies as clients.
This is an enormously valuable asset in the IT business, where trust and reliability are decisive factors for commercial success. When looking for a provider of IT solutions, one crucial aspect is making sure that things will work as expected, or that any problem that may arise can be quickly and efficiently worked out. International Business Machines Corp. (NYSE:IBM) is one step ahead of the competition in that area thanks to the strength of its brand.
Besides, Big Blue has operations in more than 170 counties, and it offers a breath of products and services unmatched by the competition. So when a global corporation wants to make sure that its IT solution is not only reliable, but can also be expanded both in terms of services and global integration, International Business Machines Corp. (NYSE:IBM) is the most likely way to go.
Bottom Line
The tech business is notoriously dynamic and provides many interesting opportunities for growth; on the other hand, the booming technology of today can become obsolete in the blink of an eye.
That´s why it’s so important to look for companies with durable competitive advantages when investing in this sector, and these three tech bellwethers provide a combination of technological quality and brand differentiation which makes them particularly attractive for long-term investors.
Andrés Cardenal owns shares of Apple, Google and IBM. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and International Business Machines.
