Does anyone remember the phrase, "Nobody ever got fired for buying IBM"? Probably not but you get the drift. These days, you can substitute Microsoft for IBM or maybe soon Google. It was a popular mantra in the IT world but it wasn't true. People did get fired for buying IBM and it's instructive to understand why.

A former colleague of mine has a story that sums it up nicely. It involves a CIO who agreed to pilot the fore-runner of an IBM groupware product. Running on the ill-fated OS/2, the product was broadly comparable to Lotus Notes or MS Exchange today.

With no shortage of confidence, this IT executive made the mistake of choosing the senior leadership team for the trial. Not surprisingly, the experiment did not go well and to add insult to injury, Office/2 was subsequently "withdrawn from marketing" by IBM-a creative description for a product being pulled from the product line. It was benched.

Now, without any possibility of addressing the problems or otherwise moving forward, the hapless project manager found himself in considerable difficulty, and shortly thereafter found that he himself was "withdrawn from employment".

This scenario is not unusual. Many companies will experience a moment of this kind at one point or another. What sets apart successful companies when that happens is that they recognize their mistakes quickly. Often, this means rationalizing the product line and leaving the market. In fact, "unsuccessful" is a relative term, and a product does not have to be suffering that indignity in the market's eyes, for this to occur. It can even be perceived as very successful. However if the product fails to make a profitable contribution, or is otherwise deemed non-strategic, it can be axed quickly and unceremoniously.

In these circumstances, customers have little leverage. It's unrealistic to assume that a single customer can change the course of a monolith like Microsoft, Oracle or Google. The chances of any of these companies going belly up is rather slim, but if a company gets rid of a product line upon which you rely on, the impact on your company is the same. This is not unique to IT. Sony is a leader in consumer electronics and likely to be around for a long time to come, but the same cannot be said about your investments in Betamax, MiniDisc or the LaserDisc.

Of course, this is not something that large companies draw attention to. Sales reps at large companies will always tout the benefits of going with a large company, which have the financial security not to go belly up after an unsuccessful product or bad quarter. It's also common to suggest that all of the company's huge resources are at the customer's disposal. This is rarely true, and even large customers can find it difficult to get on a large vendor's radar when things go wrong.

Contrast that with small vendors. It is true that small vendors can't hope to have the financial resources, or global footprint of an IT juggernaut, but contrary to the prevailing wisdom, it still may be a safer bet to work with them on an important project. Smaller vendors are typically focused on a single product and market. They know their product inside and out and due to their smaller size, every customer counts. A small company cannot afford even one disgruntled customer, particularly if that customer is a name brand. This almost guarantees executive-level attention when a problem crops up and small company engineers will work around the clock to address a serious customer issue. So, dealing with a smaller vendor provides useful leverage in the relationship. This extends to the product development effort, as well. Working with a good start-up lets a customer effectively steer the product development to better suit their needs. It's very common for a smaller company to actively solicit feedback from customers, integrating additional functionality upon customer request.

It goes without saying that there are pros and cons with vendors large and small. Often it's the concerns about the smaller vendors that get the attention, but the larger companies have their downsides too - often stemming from the fact that they're too big to give you the attention you deserve. In the end it comes down to needs. Most companies will find that they end up with a mix of the big enterprise players and the smaller vendors to meet their needs. To net it out, size really doesn't matter.


Joe Ruck is president and CEO of BoardVantage . Prior to joining BoardVantage, Joe was SVP of Marketing at Interwoven and part of the team that drove the company through one of the most successful IPOs of 1999. Previously, he held sales, marketing, and executive positions at Sun Microsystems, Network Appliance, and Genesys Telecommunications, subsequently acquired by Alcatel.