As the chief technology officer of a 30-employee start-up founded last year, Mike Panesis is well aware that small companies usually have to pay more for goods and services.
So Mr. Panesis was enthusiastic about a program run by LabMorgan, the J.P. Morgan Chase & Co. division that invests in fledgling technology companies.
The LabMorgan Network program brings those "portfolio" companies - there are now more than 60 of them - together with more than a score of technology industry leaders, including such heavyweights as Cisco Systems Inc. and Compaq Computer Corp.
The big companies get access to potential clients. The small ones get access to expertise plus low prices negotiated by LabMorgan.
The LabMorgan Network program got under way six months ago and but was first publicized this week.
Mr. Panesis said it has already produced six-figure savings on hardware and software for his company - WebALG Inc., an online provider of services for the automotive industry - which is now in prelaunch mode.
"Being as small as we are, without a track record, it's difficult to go to a big technology provider and say, 'Give us your best price,' " Mr. Panesis said. "But if we can go to that provider and say we're part of the LabMorgan network, the pricing is always better than we can do on our own."
Ameet Patel, the chief technology officer of LabMorgan, said the program is more than just "a preferred pricing and discount engagement." LabMorgan Networks is driven by the needs of portfolio companies and offers them access to LabMorgan's marketing and technology resources, he said.
Portfolio company executives can attend a seminar series with presentations from chief executive officers and chief technology officers of big member companies and can participate in business development programs with the larger companies.
The program involves teams of LabMorgan "corporate development officers." These teams work first with portfolio companies to analyze their goals and priorities and then with LabMorgan's business development group to help the companies achieve their objectives.
Mr. Patel said there are benefits on all sides: Member companies get exposure to potential clients; portfolio companies get technical expertise and access to large technology companies; and LabMorgan, as the facilitator, can focus on developing the businesses it has invested in.
"Our real staying power is going to be working on behalf of the portfolio companies, identifying their needs and wants, and translating that for our partners to provide the necessary traction to make them successful," he said. "It's not about selling products and services. It's about making the businesses successful."
Mr. Panesis said the program has provided Santa Barbara, Calif.-based WebALG with valuable assistance. "One of the hardest parts of being a start-up is that you've got an awful lot of technology decisions to make all at once," he said. "We've looked to LabMorgan to give us expert advice on what technologies are most important and relevant to our business."
To Donald S. Swatik, the vice president of information sciences at the big data-storage company EMC Corp. of Hopkington, Mass., one of the program's member companies, the advantage is not simply potential sales, but also insight into future technological needs of potential clients.
"The thing that is very, very enticing to us is to work with leading-edge companies and understand the next unsolved problem before the competition does," he said. "Obviously there's real-time business to be had, which is positive all by itself. But I think even more than that, it's being able to work very closely with some of the best and the brightest that are going to be coming up the food chain."
Mr. Swatik said that EMC - whose clients include the Nasdaq Stock Exchange, Citigroup Inc., Deutsche Bank, and other large financial companies - has provided Web hosting services to companies to better understand their issues and needs. The LabMorgan program, he said, "is totally synergistic with that activity."
The current incarnation of LabMorgan was formed through last year's merger between J.P. Morgan & Co. and Chase Manhattan Corp. and brought together Chase.com and LabMorgan, once rivals in online financial services.
Dennis J. Ceru, the director of retail brokerage and investing at TowerGroup, a Needham, Mass., consulting firm, said that though other companies have launched ventures similar to LabMorgan Networks, most do not have the same collaborative, needs-oriented approach that this program has.
"I think this is a very logical extension of new business models into business transformation services," he said. "What we're seeing here is some really exciting efforts to go outside of the normal ways of partnerships and alliances to enable the people on all sides of this equation to take advantage of what each brings to the party."
Mr. Ceru said other financial institutions following in LabMorgan's footsteps will be hard pressed to compete. "I think what LabMorgan has, in combining the resources of the two organizations that they brought together, is a wealth of expertise and knowledge, as well as the backing of two premier institutions that have now become one institution," he said. "It's a tough act to follow."