Overachieving Technology Companies

Great dataset by Forbes - The 25 Fastest-Growing Tech Companies :

"Our selection process: We require at least $25 million in sales, 10% annual sales growth for five consecutive years, profitability over the past 12 months and 10% estimated annual profit growth for the next three to five years. We exclude firms with significant legal problems or other open-ended liabilities and also consider accounting and corporate governance scores from Audit Integrity of Los Angeles in making our final cuts."

Growth has many dimensions, and with any market's cyclical pattern it's important to assess the potential for sustainable long-term growth based on easy to influence market factors, as the balance of power in the tech market can sometimes change very quickly. Being a pioneer doesn't always count as the best alternative, and it's the companies able to differentiate among fads and emerging trends, the ones worth assessing. Diversification in market sectors with higher liquidity such as anti virus and perimeter defense, or making a long-term investment, that is positioning yourself as the default destination for a need that's only emerging for the time being remain rather popular -- and predictable -- strategic business moves. Leadership, vision, and courage matter, but money when it comes to innovation doesn't. Let's discuss several companies worth mentioning whatsoever :

_Google
Don't say cheese, say Google. The company's continuing to please market analysts with steady profits, whose stock ratings bring more investors' cash into the GoogleMachine and with the re-emerging -- this time more mature -- online advertising market bidding for keywords in a world of searching will remain profitable, the question every wonders is - until when? The naysayers, or the ones who couldn't obtain any Google shares constantly talk about several buzz words - decline in online advertising, click fraud, and index poisoning. And despite the fact that Yahoo's web properties may be attracting more traffic than Google's, Google's KISS principle and their vision to set quality search results and up-to-date index of the Web as a core competency in times when the Web is growing faster than ever before, is an incentive for advertisers and users to both trust, and do business with the company. Google may not have a market capitalization as high as Microsoft, but the flow of soft dollars, Google's shares as a fringe benefit and a bargain are winning more respect, attracting quality HR, and if that's not enought, disrupting and making the world a much more transparent place to live in. Now that sounds much better than a company that's always been earning over 50% of its revenues from its oldest products -- that's boring profitability.

_Salesforce.com
The on demand concept in action. Need processing power? Outsource. Need a large snapshot of the Web? Outsource. The very idea of outsourcing a task to someone's that's specializing in the area is a more cost effective way then you'll ever do, is major driving force. Besides all, why create a new CRM system or even advertising system, when there're standardized and already developed and ready to use ones? Salesforce.com is a true case study signalling the trend, and with the company empowering developers to contribute concepts, it's a win-win-win situation for everyone involved. Read more here.

_WebEx Communications
Some Internet services are often taken for granted, and they should be, but the companies that provide these commoditized benefits such as video conferencing, are always in the position to generate steady cash flow. Take WebEx Communications. Video conferencing was supposed to revolutionize the way people communicate and do business. Have you seen a decline in 1st class business travel, or has your company kindly asked you to start video conferencing with potential customers in order to cut costs? Now, who'll do business with a salesforce whose elevator pitch cannot be verified in the elevator in a face-2-face meeting anyway? Trust me, not the type of people you'll feel proud and secure to do business with. It's all about the targeted audience and who'll benefit most from the service in a specific time, and in a specific market cycle. Seems like WebEx are either good at sensing the market, or it's the very nature of the service and the level of brand awareness they've achieved when it comes to online video conferencing.

_Websense
Web filtering was a rather hot market segment couple of years ago when there was much more transparency in the dark corners of the Web. An URL containing information corporate users didn't really needed to be more productive was easy to spot, and the static nature of the Web compared to today's dynamically changing malicious sites was making it easy for the vendor to filter out the bad sites. Real-time evaluation, or sandboxing a site came into play, Web 2.0 "wisdom of crowds" SiteAdvisor started getting acceptance, Scandoo is slowly gaining ground, vendors such as ScanSafe diversifying already. So how is Websense still able to generate such revenue flows? The secret is in their sales force able to not only acquire new customers, but to most importantly retain their major ones, and of course diversification in market sectors such as data theft prevention. And like companies such as Google, Amazon and Ebay, Database as the "Intel Inside" is a major differentiator and can close a lot of deals.

To sum up - don't disrupt in irrelevance.