I can easily remember when the world's most valuable companies were two oil companies, Exxon Mobil and Royal Dutch Shell. Today the most valuable companies are two tech companies Google and Apple. And in that particular order as of February 2nd.

If you look at the Top 10 list of valuable companies worldwide, you’ll discover that a third tech company is there too. Microsoft has been on the list for a long time, at least since the mid 1990’s.

For most of us these are familiar tech companies because know and use many of their products. In fact, there’s a good chance that you use products from all three companies. Unless of course you’ve decided to live a completely analog life under the radar and avoid all forms of office jobs.

When a new smart phone is sold the operating system is most likely either Google’s Android (81% market share) or Apple’s iOS (16%). Windows Phone is a small player in this segment with only a 2% market share. In desktop and laptop computers however the operating system is most likely some version of Windows (85%), or Mac OS X (9%).

Just by looking at end-user operating systems it’s clear that the digital world runs on platforms provided by these three companies. On top of that you have essential products like MS Office, SQL Server, Google Search, Chrome, YouTube, and iTunes, just to name a few. Plus all the services that exist in the various clouds.

There’s a theory in economics called “Too Big To Fail” (TBTF), which asserts that certain corporations are so large and so interconnected that their failure would be disastrous to the greater economic system. Usually the term is associated with financial institutions, like banks and insurance companies. Many believe that if such a corporation would be on the brink of failure, governments must support it in order to minimize damage to the global economic system.

The reason TBTF usually refers to financial institutions is the global financial crisis of 2007-2010. During that period Lehman Brothers collapsed with a devastating ripple effect. Subsequently a number of other financial institutions ended up in serious trouble. They were however rescued by governments, mainly in the U.S. and the U.K. 

Fortunately we haven’t had any serious financial or technological failures among the largest global tech companies. At least not in the sense that the failure would have occurred abruptly and unexpectedly. A sudden financial failure seems a bit far-fetched considering the huge cash piles the companies are sitting on. Apple’s cash reserves are currently $216 billion and Alphabet's (Google's) reserves are $73 billion. On the other hand, things can change quickly in the tech industry. Furthermore, very few of us could foresee the sudden collapse of Lehman Brothers and the resulting financial crisis.

It’s also difficult to see how a technological failure could cripple an entire company and cause long-lasting outages in network and cloud services. Yes, we could experience a serious meteoric electromagnetic pulse (EMP) or something worse, but that would mean global disaster regardless of the big tech companies. In any case, we can't totally exclude the possibility of an incident, accidental or malicious, which could cause severe technological destruction to a tech company.

If we consider TBTF to be an issue within the financial industry, it certainly is an issue also in the tech industry. What to do about it is a totally different question. Should we just allow the situation to continue (as in the financial industry) or should we enforce separations, ring fencing, and more control? What role should the governments take, if any?

It’s easy to see that the role of governments as a saviours is limited to financial distress situations. I don’t expect the U.S. government to be able to do much if for example Microsoft would experience a serious technological failure.

Individual users and companies can take pre-emptive measures and be mindful of the risks. If you’re running a business and all of your devices and services come from one company, you might consider having some backup systems in place.