In a recent column, I wrote about a new great divide in Silicon Valley, in which one side believes the best business model is to sell products and services while the other side gives away services subsidized by advertising.

Both business models are valid, but the ad-supported model must contend with protecting customers' privacy as advertisers need as much data on them to target ads. As a result, it's becoming clear that those selling products and services—such as Apple, Amazon, and Microsoft—have perhaps the most sustainable models.

Apple announced in its May 1 earnings call that its services revenue during the last quarter was $9.2 billion. This is a 31 percent increase from the same quarter a year ago; if made a standalone company on its own, services would be a Fortune 300 company. To be clear, 62 percent of Apple's revenue still comes from iPhone sales, but this chart from Statista puts the services growth in context:

At the moment, Apple leads the pack in providing a complete ecosystem of hardware, software, and services. But if you have been watching Microsoft over the last four years, you know that it's doing the same, with services like Office 365 and more recently, Microsoft 365.

A dedicated, sand-boxed store in which only approved apps are allowed gives Microsoft more control over security and brings it new revenue streams. But PC partners don't love it, pushing some to alternative OSes like Google's Chrome OS.

Still, while there is money to be made in hardware, PC sales continue to shrink and a focus on services is critical to the long-term survival of companies like Apple, Microsoft, and others.