eWeek: Reversal of Fortune

“Did Wal-Mart help keep the united states from falling deeper
into economic trouble than it did? Matthew Szulik, chairman and CEO
of Red Hat, thinks so. “I have great personal admiration for what
Wal-Mart has done,” Szulik told me during a recent breakfast
meeting. Wal-Mart’s combination of high value and low cost for the
customer, thanks to precise inventory control, helped keep
consumers buying during the recent downturn—and has a
lot to teach the high-tech industry, Szulik contends.

“Szulik may be right. In the past, it was the technology
industry that was supposed to be teaching the old-line companies
about doing business in a new century. Amazon’s ability to keep you
updated about the status of your purchase led business executives
to rightly question why their company’s manufacturing and
purchasing systems couldn’t be as simple and reliable as an online
bookseller’s operations. Now the tables have turned. As Szulik
pointed out, the technology companies that can create both a
lower-cost purchasing threshold and a higher perceived value for
their products in the customer’s mind can build a gap that
competitors will find increasingly difficult to bridge…”

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