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Sunday, Apr 21, 2024

Local Technology Companies on National Fastest Growing List

Twenty-two San Diego companies made a list of the 500 fastest growing technology companies in the nation, led by the local software sector, which placed six firms on the list.

The software companies cover a range of industries and were led by ServiceNow, which ranked No. 5 on the list compiled by accounting firm Deloitte LLP.

The local results resembled the list’s overall makeup in which five of the top 10 companies, and 39 percent of the total came from the software sector.

Five other local software firms ranked on the Fastest 500 list include Kyriba Corp., No. 172; AutoClaims Direct, No. 202; Nik Software, No. 217; The Active Network, No. 256; and XIFIN Inc, No. 298. The ranking was based on revenue growth from 2006 to 2010.

Mark Jensen, Deloitte managing partner, said the Western region of the country has the highest concentration of fast growing tech companies, 37 percent. Another repeating pattern in the past few years is the dominance of companies on the list based in the West and the Northeast, Deloitte said.

Ken Bender, president of Software Equity Group, a local investment banking firm in the software industry, said he wasn’t surprised by the inclusion of so many software firms on the list, particularly if the firms were engaged in business process outsourcing, like ServiceNow.

“When you look at what’s happening at the largest companies over the past 15 to 20 years, you’re seeing a trend in which these companies are focusing more on what their core business is, and outsourcing many other parts to (outside) companies that are specialists in that field,” Bender said.

A Provider

ServiceNow provides information technology service to others through a network of servers outside the client’s business, or through “the cloud.” Instead of hiring employees to maintain certain parts of an IT network, such as updating or ensuring certain applications operate on a variety of servers, those activities and many others are done by an outside company, Bender said.

Frank Slootman, chief executive at ServiceNow, said while the majority of the company’s revenue comes from major corporations including Target, Citibank, Staples and UBS, it has a greater number of customers among smaller and midsized firms.

“We’re drawn to bigger companies because they have a lot more invested in their IT systems, and more need for our type of solutions,” said Slootman, who joined the business about six months ago.

Although the Deloitte list didn’t reveal the revenue numbers, Slootman said the firm is on track to hit $130 million in sales this year, compared with $43 million in 2010. Employment has more than doubled to 525 worldwide, including 220 in San Diego.

Nik Software was another firm enjoying rapid growth; CEO Michael Slater declined to reveal specifics. The company’s software, which helps both professional and amateur photographers enhance their pictures on computers, gained considerable traction from a recent mobile application offered by Apple’s iTunes App Store that was downloaded nearly 1.5 million times since its release about four months ago.

Nik makes the commercial application software for Nikon Corp., which also has a 35 percent stake in the company. Slater said employment at the growing firm is up by about 20 percent from last year to 120 workers, including 40 at its headquarters office.

The success of some of the software providers has caused more interest from possible buyers and investors, Slater said.

In addition to the software companies, the other local firms represented on the list are: MaxLinear Inc., No. 17; Franklin Wireless Corp., No. 18; Dexcom Inc., No. 57; Halozyme Therapeutics Inc., No. 82; Isis Pharmaceuticals Inc., No. 158; Acadia Pharmaceuticals Inc., No. 219; Entropic Communications Inc., No. 224; Trius Therapeutics, No. 226; Illumina Inc., No. 232; NuVasive Inc., No. 234; Life Technologies Corp., No. 373; Kratos, No. 398; Volcano Corp., No. 410; DJO LLC, No. 417; Alphatec Spine Inc., No. 449; and Santarus Inc., No. 465.


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