The old saying goes "it doesn't matter how big it is, it's how you use it that counts". In the software world, this couldn't be more applicable.
The big software companies like IBM and Microsoft have so many people hacking away at their products that they just can't seem to produce any decent software any more. Microsoft has been working on Longhorn, or Vista as it's now known, for years, and they're still a long way from delivering anything. Meanwhile, IBM products have become so complex and bloated, you need a super computer to run them on.
I recently wasted an afternoon (and about 3GB of disk space) attempting to install IBM's WebSphere Portal. The install consists of countless CDs, and installs about 11 other products while it's at it. Why does it need to be so complicated? JBoss Portal is a 9MB binary download that you install on top of JBoss Application Server (a mere 47 MB download) and can be installed and configured in under 15 minutes.
Why? IBM is a huge software company with years of experience in writing software. JBoss is an open source product developed by a handful of developers. Sure, JBoss products can be a bit rough around the edges and don't come with all the bells and whistles, but they work! They just work! JBoss is probably the most configurable and scalable Java EE application server in the market today. And they're the only vendor who releases products in a timely manner. It will be years before we see EJB 3 in WebSphere.
So why can't companies the size of IBM build better products? It's because they're so big. Size has a huge impact on productivity. With more people you have more meetings, and more disagreements, and more politics. If you can get a small team of highly skilled and motivated people together you can achieve amazing things.
A fine example of this is a company called 37 Signals. They produce a number of online services including the very successful BaseCamp and BackPack. At the time of writing this article, they employ a total of 7 people! But with those 7 people they build excellent products and often share press with the likes of Google for their innovative and amazingly simple applications. They're just a bunch of very intelligent and dedicated individuals who are passionate about building excellent products. And because they're small they can.
Physics says that a body in motion tends to stay in motion, but the same is true for software companies. Big vendors are so big and bulky that it takes them forever to react to the demands of the market. Meanwhile the little guy can decide to change today and have a beta release out by next week. Why? Because they can make quick decisions and implement them without having to run the idea past legal, marketing, the architecture group, etc...
Size matters. Stay lean and you can be quick on your feet and build software that works. You'll be able to make regular releases and fix bugs quickly. And most importantly, you can react quickly to the needs of your users and build a product that people actually want.
So don't be worried if the software company next door is bigger than yours... it's what you do with it that counts.