Chronic Survivors of the Digital Age: The Syndrome of Scaling Without Profits

‘Profits’- this is the soul of capitalism, if it has one. But time and again, we have seen some companies never post impressive results. And, at the close of every financial year, the good, bad, and the ugly numbers come to the fore.

We have just come out of another financial year, and by and large, the numbers the IT companies posted were not that great. It’s like sustained momentum, powered by cautious optimism.

Been There, Done That, Yet Figuring Out

But what is more perplexing is some of the companies have been there for years, and they never turn ‘black’. They are always in the ‘red’. They have a huge workforce in thousands, but bleeding black, a pile of debt. And one look at their financial numbers often paints a picture no investor wants to frame and hang on the wall.

These companies, very strangely, despite developing key domain expertise, could not make revenues. And yet, walk the corridors of the digital economy but never stepping  into the world of profitability. Yet they thrived on inflections, had the first-mover advantage, had a product pitch in a services world. They still exist. Still hiring. Still signing deals. And still chasing relevance.

But they still don’t make money.

Build. Scale. Bleed. Repeat.

Looking at these companies, their playbook is familiar. What they typically do is power big enterprises - from cloud to data centres. And the executive leadership, while mindful of their fiscal health, pitches the cliché: "We're building for tomorrow."

But over time, tomorrow becomes a moving target. Hope turns into habit. Growth turns into compulsion, trapped in optimism.

It’s Crude to Say: Are They Corporate Zombies with a Beating Heart

Let’s make one thing clear. These companies are not failures, not laggards either, for they manage infrastructure that keeps the digital economy alive. But why is it that they don't flourish? They adapt, evolve, they survive, but don’t succeed financially. There is no balance in their books.

If you ask why, I think they are too ‘Strategic to Fail’. Sure sounds like a paradox.

Then what keeps them going? A mix of necessity and a perfect example of strategic inertia, easy capital, and market relevance. The mindset here stems from the belief that infrastructure equals inevitability.

Also there’s a perennial need for these providers to manage the enterprise digital ecosystems.

But why is a Competitive Moat Missing

‘Moat’ is a term popularised by Warren Buffett. Just like a real moat protects a castle, a business moat protects profits and market share. But strangely, these companies lack one. So that leads to the hypothesis: They scale but don’t thrive. This reflects what may be called a Chronic Survivor Syndrome.  Here it’s a metaphor to define leadership and survival in a business context.

These companies, essentially:

• Don’t fold, because they’re “too strategic to fail”
• They’re locked into legacy leadership mindsets.
• Don’t profit, because the model is structurally broken, either by market dynamics or strategic misfires.

It’s a unique paradox: cash-burning public companies that aren’t startups. A paradox caught in Pandora’s box.