Quality Is the New Moat
Chirag Narang@chiragnarang
−4.3%
since Oct 6
The idea
I believe ongoing layoffs across tech have quietly eroded software quality industry-wide, and the companies that still build things right are becoming rare enough to pull ahead over the next several years. This basket leans into the big clouds, the networking and data center backbone, the silicon underneath it all, and the mission-critical software vendors enterprises still trust, with a cash cushion and no single name dominating. If engineering discipline stops being the differentiator or quality stabilizes broadly across the industry, I'd rethink the idea.
What it owns
- The hyperscalers run the world's workloads and win more of them every time a leaner rival's software slips. · MicrosoftIt consolidates enterprise workloads onto one cloud through engineering discipline that keeps infrastructure uptime stable and customers from migrating elsewhere., AlphabetIt competes for enterprise cloud workloads by running one of tech's deepest engineering cultures, betting that reliability draws customers as rivals slip., AmazonIt is the default choice when companies consolidate infrastructure because AWS has built an uptime lead thinner internal teams cannot match., OracleIt holds the databases enterprises cannot afford to break, getting stickier when quality is scarce and customers won't risk migration to shakier vendors.29%
- The physical layer the clouds run on, built by companies whose whole business is things not breaking. · Arista NetworksIt supplies the switches big clouds choose when the network cannot go down, picking up workloads as hyperscalers consolidate on quality vendors., BroadcomIt supplies the networking chips underneath nearly every data center, the layer that has to work reliably because the infrastructure players build on it., Cisco SystemsIt runs the networking gear already inside most enterprises, so companies with shrunken teams rip it out last and keep paying for gear they trust., EquinixIt rents data center floors where uptime is the whole product, collecting rent on consolidation while occupancy and pricing hold.19%
- Chipmaking is the hardest engineering in tech, and the firms that do it reliably are nearly impossible to replace. · Taiwan SemiconductorIt makes the advanced chips almost no one else can, for nearly everyone seeking to standardize on the most reliable foundry available., ASML HoldingIt builds the only machines that can print the most advanced chips, a precision monopoly on the hardest step in chipmaking that has no substitute., NVIDIAIt is the compute platform big clouds standardize on, with a software stack rivals keep failing to match for serious cloud and AI workloads.17%
- The systems companies bet their operations on, where buyers pay up for the vendor that doesn't fail. · ServiceNowIt runs the workflows enterprises use to keep operations from slipping, growing stickier as internal teams shrink and treat it as essential., SAPIt runs the books and supply chains of companies that cannot tolerate breakage, exactly the software people won't trust to vendors with thinner engineering., IBMIts mainframes and infrastructure software pitch decades of not failing, the sales case that keeps banks, airlines and governments paying instead of migrating off.13%
- Consumer and web platforms with a reputation for it-just-works reliability that keeps customers locked in. · AppleIt builds hardware and software from one disciplined shop, so the quality gap over other device makers stays visible enough to keep customers paying up., CloudflareIt sells reliability itself by running in front of websites so that when things break, less of it reaches users and uptime stays intact., AkamaiIt has run a delivery and security network for over two decades, the proven operator in a business where new entrants stumble and lose enterprise share.12%
- Cash10%