Which Tech Company Is the Most Dangerous Competitor in America?

The tech industry has always been brutally competitive. Companies can grow to multibillion-dollar valuations on the back of a brilliant new breakthrough, only to lose it all in the span of a few years as powerful foes rush in with slightly superior alternatives at bargain-basement prices.

The world's top tech companies are well aware of this constant challenge, and they're not shy about pointing out exactly which of their competitors pose the greatest threats. A couple of months ago, Bloomberg dug into the 10-K filings of the 50 largest tech companies on U.S. exchanges to find out which of them are most often mentioned in the "risk factors and competition" section -- you know, that wall of text many investors scroll past to get to the juicy financial details. You might be very surprised by which companies appear most frequently, so read on to discover the most dangerous companies in tech, or just scroll down to find the full top-10 rankings with additional data.

10th through fifth place
There were several ties in the latter half of this top-10 list, so we actually wind up with two 10th-place finishers, two eighth-place finishers, and two fifth-place finishers.

Amazon.com and Cisco tied for 10th place on Bloomberg's most-dangerous list, with eight mentions apiece in the 50 largest tech companies' 10-Ks. Amazon's ranking seems surprisingly low, since it's a dominant force in both e-commerce and cloud computing, two of the most important elements of the modern Internet economy. Amazon has also expanded into streaming video, and has a payment-processing system in the works as well. Cisco, on the other hand, is the undisputed leader in networking equipment, which it's leveraged to build share in online security tools and business communications as well. That puts it in the crosshairs of several large antivirus makers, but it's not the only networking specialist with a monster market cap, either.

Intel and recent leveraged-buyout target Dell tie for eighth place with nine out of 50 mentions each. Intel's placement is obvious -- as the world's largest chip maker, it's in direct competition with virtually every other major chip maker, and its ownership of security software maker McAfee puts it in the crosshairs of every major antivirus-software company as well. Computer maker Dell is a perennial threat to other large hardware companies, and its belated efforts to expand into software and enterprise solutions expands its list of domestic opponents dramatically.

Samsung places seventh, with 11 call-outs from America's 50 largest tech companies. As one of the world's largest and most diversified electronics companies, Samsung not only makes smartphones and TVs, it also manufactures many of the chips that control the world's devices.

Source: Ed Favila via Flickr.

Apple (NASDAQ: AAPL  ) and Google tie for fifth place with 12 mentions apiece. Both companies compete in many of the same sectors of the tech world, including mobile (iOS and Android) and desktop computing (Macs and Chromebooks). Apple's integrated ecosystem threatens both hardware and software companies, while Google's reliance on data-driven advertising and its ownership of YouTube makes it a threat to major content- and media-focused tech companies. This ranking seems low for both companies, but more so for Google, which has a hand in so many parts of the tech ecosystem that it should surely threaten a wider range of competitors.

Fourth place: Oracle
Database-software specialist Oracle (NYSE: ORCL  ) gets singled out by 13 of America's 50 largest tech companies as a major threat. Surprisingly, companies in segments as divergent as security software and data analytics think Oracle is dangerous -- but since Oracle is the second-largest software company by revenue in the world and boasts 400,000 customers worldwide, it probably has more competitors than it's even fully aware of -- and some of them might be using its programming tools to challenge other top tech companies as well. Oracle also offers a wide range of cloud-computing applications and platforms as well as a line of server hardware.

Source: Don DeBold via Flickr.

Third place: Hewlett-Packard
PC and printer kingpin Hewlett-Packard (NYSE: HPQ  ) competes with 15 of America's 50 largest tech companies in a wide range of hardware categories -- it also makes servers, smartphones (though it's unlikely that these are actually "competing" with anyone right now), and networking hardware -- and has also been steadily growing its software segment under current CEO Meg Whitman. HP competes with nearly every other company already on this list, and as its enterprise software and services efforts intensify, it's likely to come into the crosshairs of companies that might not have imagined having to fend off HP five or 10 years ago.

Second place: Microsoft
With 16 mentions from America's 50 largest tech companies -- a third of the list -- Microsoft (NASDAQ: MSFT  ) claims second place on our most-dangerous list. Its operating system dominance is obviously a challenge to Apple. Its expansion into search got Google riled up. Its leadership in the game-console market (not to mention its game-development studio) worries game publishers. Its push into cloud computing makes Amazon and Oracle direct competitors. And now that it's got its own mobile-device manufacturer in Nokia's hardware segment, Microsoft is bound to find new challengers waiting for it in 2014.

Source: Alfred Lui via Flickr.

America's most dangerous tech company: IBM
After working our way through a list of industry leaders, it may be surprising that IBM (NYSE: IBM  ) worries more of its peers than any other tech company. With 18 mentions out of the top 50 tech companies, IBM is clearly a big threat, but why? Bloomberg points out that IBM's business-services focus has given it an inside track to IT departments in many of the world's largest companies, which has been a popular avenue of growth for companies ranging from HP to Cisco.

IBM's leadership in the nascent Big Data field, and its development of artificial intelligence systems such as Watson, also make it dangerous to a number of analytics-driven tech companies. IBM is also by far the most prolific patent hoarder in America, which can make it dangerous even when it's not trying to challenge anyone directly. However, it's possible that IBM's rank will slip next year, since it recently sold off its server-hardware segment, which was one of the world's largest server vendors in 2013.

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Rank

Company

Competitors (out of 50 largest U.S. tech companies)

Market Cap

U.S. Patents Granted in 2013 

1

IBM

18

$194 billion

6,809

2

Microsoft

16

$318 billion

2,660

3

Hewlett-Packard

15

$57 billion

1,360

4

Oracle

13

$176 billion

525

5

Apple

12

$469 billion

1,775

5

Google

12

$409 billion

1,851

7

Samsung

11

$167 billion

4,676

8

Dell

9

$25 billion*

209

8

Intel

9

$123 billion

1,455

10

Amazon.com

8

$166 billion

530

10

Cisco

8

$112 billion

885

Sources: Bloomberg, Yahoo! Finance, IFI Claims Patent Services.
*Dell market cap is the value placed on it by its 2013 leveraged buyout.


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