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To survive in the global economy small and medium enterprises (SMEs) have to improve their products and processes exploiting their intellectual capital in a dynamic network of knowledge‐intensive relations inside and outside their borders. By erasing traditional constraints to SMEs innovation ability and leveraging their flexibility and responsiveness, Information and Communication Technologies (ICT) provide SMEs with opportunities for Knowledge Management (KM) today in most cases largely unexploited. Focusing on the area of Product Innovation (PI) and drawing evidence from the analysis of a multiple‐case study on 47 Italian SMEs, patterns in the adoption and use of new ICT tools are explained in relation both to Contingencies and to KM internal processes. Complexity at both product and system levels, emerges as a key factor driving technological choices. Three different KM configurations emerge in …