Subject: Re: Wal-mart drives software industry
From: Tom Lord <lord@regexps.com>
Date: Tue, 26 Feb 2002 21:17:14 -0800 (PST)



       IT is generally a risk, not a competitive advantage.  There are a few
       exceptions.  Some companies have chosen to make IT a competitive
       differentiator (Wal-Mart comes to mind).  But that is not the general
       case.

       Most companies differentiate from their competitors on the
       product they sell.  If their IT infrastructure is the same as
       their competitor, then that's one less thing for them to worry
       about.  It allows them to concentrate on competing around the
       product, not around something (IT) that isn't necessarily a
       core strength.


Well, there's all the companies that have taken a beating from
Wal-Mart.  There's telecom, at least for some definition of IT.
There's the automative industry and the transformations it's
undergoing; other manufacturing sectors too.  Everything related to
shipping.

There's also a kind of grass-roots IT to approach indirectly: e.g. I
know of a bunch of small restaurants that would benefit from more
facile supply chain management.  Selling to them individually wouldn't
be a win for a big company, but focusing on the tools and
infrastructure that can benefit such shops generally might be a
reasonable idea.  Just generally, in more than one city I've visited
or lived in, there's a local day-to-day economy that runs on
early-20th century mechanisms.  Moreover, those mechanisms aren't
working as well as they did in the early 20th century because the
context has changed: the number of regional importers has dwindled,
the old communications and transportation infrastructure disappeared,
consumer habits have changed, and consequently harmful monopolies have
become entrenched.  The stuff we think about doing on a global scale
with 1000 big companies also makes sense about doing on a local scale
with 1000 little companies.

-t