It has been a common saying in the business world since the 1960s that “Nobody ever got fired for buying IBM.” This phrase acknowledges the difficulty of major enterprise IT projects, but some see it as a sign of corporate timidity. However, as technology becomes increasingly important for success, companies must question whether relying on big tech brands like IBM is still the best choice, or if they should take a chance on newer providers that may offer better results.
Recent incidents, such as McDonald’s discontinuation of an AI drive-through ordering system developed by IBM due to errors, highlight the risks of sticking with traditional tech giants. The Post Office’s debacle with Fujitsu’s accounting software system further demonstrates that bigger companies are not always better.
History is full of examples of major IT failures caused by relying on established brands. The failures of companies like Lidl, Hershey, and British Airways show that even the most well-known tech providers can let businesses down when it comes to crucial systems like ERPs and CRMs.
At DN Capital, an early-stage enterprise SaaS venture capital firm, we believe that choosing dynamic new entrants over legacy incumbents can give businesses a competitive edge. Venture-backed companies are driven to disrupt markets and offer innovative solutions, unlike large incumbents stifled by bureaucracy and technical debt.
Companies like Snowflake and UiPath, which have grown with venture backing and are now leaders in their respective fields, demonstrate the success that can come from embracing disruptive newcomers in enterprise software. Our portfolio companies, such as Incode, have earned the trust of major corporate clients by offering innovative solutions in areas like digital onboarding and identity verification.
We believe that CIOs should consider turning to proven venture-backed disruptors for their enterprise technology needs in order to stay ahead in today’s competitive business landscape.