Out but Not Down
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Percentage of Inc. 500 CEOs who have been victims of downsizing: 3.2%
James McGowan has every right to render strong judgments about how big companies treat people. After all, his experience runs the gamut: he was laid off by one about six years ago, but his own business benefits mightily from a big-company partnership.
Still, the chief executive officer of Infinite Technology Group (#10) doesn't simply express bitterness toward the former and gratitude toward the latter. The best McGowan can say is that his feelings are, well, mixed. Maybe that's understandable. In both situations, the corporate giant involved is Digital Equipment Corp., the nation's third-largest computer maker. "Just because a company like Digital doesn't have a job for you doesn't mean it doesn't have work for you," says Mark Dresner, Infinite Technology's executive vice-president and another Digital refugee.
The core of McGowan's business involves reselling computers, and he had begun planning to start it about six months before November 1990, when he became yet another statistic of downsizing. Given that then $13-billion Digital, based in Maynard, Mass., seemed destined to endure endless swings of the job-slashing ax, McGowan knew it would need to outsource big chunks of work. Who better to handle it, he reasoned, than the folks who knew it best? "It seemed logical to look at Digital and determine what it needed from outsiders," McGowan explains.
His severance for seven years' service at Digital amounted to only 14 weeks of salary. So instead of starting from scratch, he joined an existing company known as Infinite Technology. Eventually, he and his partners bought it.
McGowan, Dresner, and a third partner, Drew Arlo, had worked together in New York City, selling and servicing Digital's accounts at financial institutions, primarily banks and securities firms. Infinite Technology's business with Digital started off slowly, with the smaller company usually handling ac-counts worth less than $100,000. But then Dresner, who was still with the computer giant, began relying on McGowan. McGowan "could help Digital salespeople make more sales," Dresner says. "We started working closely together, and, with my future at Digital uncertain, it was a natural transition for me to come with him"--which he did, in 1993. Arlo lost his job as a result of downsizing last year, whereupon he instantly enlisted with his comrades.
Headquartered in Mineola, N.Y., Infinite Technology posted revenues of nearly $17 million last year. The core of its business is sales, but it also provides software, systems integration, and custom-built systems, often collaborating closely with Digital . "In some cases," says Dresner, "we go in and basically open the books and structure a deal knowing what each other's costs are and what the profit margins need to be. Then together we do what it takes to win a contract, as though we were one company."
They aren't, of course--a point underscored by Infinite Technology's recent decision to begin providing sales and support for rival hardware vendors, including IBM and Sun Microsystems. Even so, the company's top managers maintain special, if not simple, sentiments about the supplier that once employed them. "We still feel very strongly about the Digital products," stresses Dresner.