TIBCO Software (NASDAQ:TIBX.DL) CEO Vivek Ranadive thinks the 21st century started a little late. In his keynote speech at last week's TUCON 2013 conference, Ranadive said the new century really started in 2010, driven by five primary forces.
Let's see whether Vivek's five forces can help a curious investor.
1: Explosion of data
"Collect all data from the beginning of mankind to TUCON last year," Ranadive said. "In the last year, you saw 10 times all that data created."
This is not a unique insight, but a correct and very investable one. The Fool put together a special report on this very theme, available for your enlightenment here (with one no-brainer stock recommendation included).
If you still want a second opinion on this jet engine, check out the annual Visual Networking Index, where Cisco Systems (NASDAQ:CSCO) reports on current and future growth trends in global networking. In the latest update, Cisco focused on the amount of new video content being created. "It would take an individual over 5 million years to watch the amount of video that will cross global IP networks each month in 2017," Cisco said.
Keep in mind that not every bit of data created will touch an Internet backbone network, and you'll see how the two reports walk hand in hand. Much of the data that Tibco's tools manage and analyze will never leave the creator's data center, after all. But it still needs to be stored, managed, and analyzed if you want to gain any advantage from having generated the information.
This megatrend plays into many parts of the IT sector: networking, storage, data analysis, content distribution, and more. The data explosion is a beast that creates new opportunities as often as it overthrows old business models.
2: Rise of mobility
According to Ranadive's keynote, it took 100 years to build out 1 billion landline phones. The cell-phone revolution was much faster, reaching 1 billion handsets in 10 years. The billionth smartphone hit store shelves just one year after the first one.
I'm not totally clear on how you'd have to define the smartphone concept to reach this conclusion, or whether we should count old-school attempts such as the Palm Treo or early BlackBerries. But give Vivek some poetic license: The main idea is that smartphones exploded on the scene like no other communications trend before it.
If you haven't noticed this trend, you should come out from under that rock once in a while. The iPhone and iPad lines made Apple (NASDAQ:AAPL) the richest and most valuable company on Earth, and the mobility makeover was almost instantaneous. Can you believe that Apple released the first iPhone just six years ago?
3: Emergence of platforms
The 20th century (which also started a little late, in Ranadive's opinion) brought along radio, telegraphs, and telephones, a revolution compared to the old Pony Express mail service. In the 21st century, broadcast techniques combined with personal communications to give anybody a platform that can reach hundreds, thousands, or even millions of people.
Anyone can write an app and publish it in the Apple App Store. Have something more immediate to say? Try social services such as Twitter, Facebook (NASDAQ:FB), or TIBCO's corporate version, Tibbr. Online ad networks combine massive reach with pinpoint targeting. It's a whole new generation of personal communications.
4: Emergence of the Asian economies
Here, Ranadive gave us a history lesson. "It used to be that China and India made up two-thirds of the global economy, 200 years ago," he said. "Some experts believe we will revert to this within this century."
There's no question that Asian economies matter more than they used to. Unfortunately, it's a little harder to invest in this trend than some of the others. A handful of major Asian players do sell shares on American exchanges, but most of them are locked into their home markets, with nothing but Pink Sheets shares available for American investors. That typically means less investor information available, which makes it hard to make informed investment decisions in many Asian powerhouse businesses.
But the conversation flows both ways. TIBCO collected 10% of its revenue from the Asian region in the past four quarters, for example. Sticking with the stocks already discussed, Cisco gets 16% of its sales and operating profits from Asia. For Apple, Asian revenues account for 26% of total sales and 38% of operating profits. All of these Asian ratios have been going up over the past three years. Facebook doesn't break Asia out from its "rest of the world" segment, but American revenues became the smaller of these two segments last year.
So the obvious investment action on this data point is simple: Find out which Western companies are taking advantage of the Asian resurgence, and then invest accordingly.
That's four of Vivek Ranadive's five drivers for the 21st century. They're all very well known trends, and it's getting hard to find a company that isn't trying to take advantage of them all.
The fifth one merits a story all its own, so let's take a break here. You'll find the fifth force behind the 21st century in this article, where Ranadive explains what sets TIBCO apart from the competition.