This line of analysis looks promising, but the post leaves too many important questions unanswered, including:<p>* How have mergers and acquisitions affected the rate of churn in the S&P 500? It could very well be that S&P 500 companies are disappearing from the list at a faster rate because they're being merged into or acquired by other companies at a faster rate.<p>* To what extent does the rate of churn in the S&P 500 reflect declines in specific sectors of the economy unrelated to software? For example, US manufacturing has faced challenging times for several decades, so one would expect to see this trend reflected in the list.<p>* How did the inflating and bursting of the Housing Bubble impact the companies exposed to that industry in the S&P 500? For example, many home builders and mortgage lenders boomed during the bubble and then went bust when the bubble burst. How is that reflected in the data?<p>* How did the growth in financial services as a percentage of GDP affect the index prior to the financial crisis? How about after the financial crisis? Think not just about Lehman Brothers's demise, but about all the formerly high-flying financial firms that went bust or whose size is considerably smaller today.
"In another 50 years, would you expect Apple or Exxon to still be near the top of the list?". Is that a trick question? Exxon obviously - they make the thing we can't live without.
For an article about "software eating the world" it would perhaps have been nice to use a list that isn't restricted to US companies.<p>For example, there is the Forbes Global 2000 - this is just public companies, but Apple isn't even in the top 20 there (it's #22)<p><a href="http://www.forbes.com/global2000/list/" rel="nofollow">http://www.forbes.com/global2000/list/</a>
<i>In another 50 would you expect Apple or Exxon to still be near the top of the list?</i><p>Exxon yes, Apple no. There isn't enough advantage to being the incumbent in Apple's weird combination of fashion and consumer electronics.
Love the chart. Another fun thing to plot might be: what's the retrospective half-life of the Fortune 500? (That is, how far back do you have to go from each year for 50% of the companies to be different.)
"In another 50 would you expect Apple or Exxon to still be near the top of the list?"<p>Well, maybe it depends on who is supplying power to the world, including, e.g., supplying the power to run Apple gadgets and Apple datacenters. Chances are it's still going to be Exxon.
I'm intrigued by the idea of "regulatory capture." I hadn't heard that term before but that economic theory is playing such a prominent role at the moment in the growth of the market I work in, privacy (e.g. EU Data Directive, US Privacy Bill of Rights). We of course saw it clearly working in favor of IT in the US in the last decade with the advent of HIPAA, SOX and GLBA. Whole segments of the IT security business were basically born (re-born) due to this legislation.<p>I wish Gabriel went into more depth on this point. Specifically I wish he provided some examples. I think we would all benefit from considering what changes legislation will bring and seeing if we can't jump on the opportunities early.
The margin paragraph is simply too optimistic, margins now are good because there is still small to no competition, when competition will come, margins will drop.