It’s been difficult to avoid the impression this week that we are witnessing the end of an era in Australian business.
The nation’s most powerful corporate dealmaker of the past decade or so, UBS’s local boss Matthew Grounds, announced his retirement. And one of world’s biggest investment banks, Deutsche Bank, began a significant retreat from Australia, where it has held a strong presence for decades.
The twin developments justifiably created a huge stir within the investment community. Such that another, perhaps equally significant business development, almost slipped by unnoticed.
Across the Pacific Ocean on the Nasdaq exchange, shares in Australia’s most prominent tech company Atlassian hit fresh highs. And as this took place, co-founder Mike Cannon-Brookes was rubbing shoulders with the likes of Apple CEO Tim Cook, Facebook’s Sheryl Sandberg and News Corp scion Lachlan Murdoch at the ultra-exclusive, invite only Allen & Co conference in Sun Valley, Idaho.Advertisement
The share surge means Atlassian is a now a $50 billion company. It’s currently more valuable than Telstra, the corporate icon Grounds helped float on the stockmarket, in what he described this week as one of his most memorable deals. It also means Cannon-Brookes’ and co-founder Scott Farquhar’s multi-billion dollar fortunes each sit comfortably ahead of James Packer’s – a corporate icon himself, and Grounds’ most famous client.
“It’s a surreal place to be for sure,” Cannon-Brookes said in a phone call this week, referring to the rise of Atlassian. “But we are here. And I think we deserve to be here.”
Now, as someone who started his career in finance (including a brief stint on a Deutsche Bank trading floor) and ended up writing about technology and media, I acknowledge I may be reading too much into things here.
But this week’s events still felt highly symbolic. Yet another striking illustration of a theme that is increasingly pervasive: Technology is becoming a more prominent function inside many companies than finance (or at least corporate strategy and internal deal-making departments). And tech is displacing finance as the dominant business sub-culture.
The era of the dealmaker, and the industrial moguls they advise, dressed in expensive suits and pounding the table in oak-pannelled boardrooms has all but faded. It is being replaced by the age of the hoodie-clad venture capitalist, and the freewheeling, disruptive tech entrepreneur.
This theory is not perfect, of course. Dealmakers and financiers are making a lot of money from tech, and tech moguls are doing a lot of deals. The conference Cannon-Brookes and other tech figures attended this week in the US is hosted by a boutique investment bank, after all. Yet the broader trend is unmistakeable.
None of this is to say that tech’s ascendancy is leading us into an era that is necessarily better than what preceded it. The tech industry has its fair share of problems, which are only coming to light now.
Regulators and politicians are increasingly concerned about the market power of ‘Big Tech’ companies, not to mention the impact of their products on society. Facebook and Google, in particular, are under fire for repeated privacy breaches, failing to stop fake news and filter bubbles and for absolving themselves of responsibility when deeply problematic content has spread on their platforms.
Unlike investment banks, tech companies can’t be blamed for a global economic collapse. But the strong case can be made that some of them have seriously weakened democracies. The too-big-to-fail bank has been usurped by the ungovernable tech giant.
The shift from finance to tech is not just cultural. There is arguably a powerful macro trend underpinning it. Ultra-low interest rates have weakened banks profitability, but also enabled disruptive businesses that otherwise may not have existed to thrive. This raises an obvious question: what happens if and when interest rates do return to more historically normal levels?
None of this is top of mind for Cannon-Brookes, though, who has now truly arrived as a member of the global business elite. Not that you would know it from talking to him. “We have got a shit load of work to do,” he says. “We will keep focused on the long term, building the best company we can. For customers ultimately, rather than shareholders, and the rest sort of takes care of itself.”