Pedals to the Metal

By CIOinsight  |  Posted 09-29-2006

Get big fast: That was a mantra of late—and not-always-so-great—1990s Web mania. Growing quickly then meant hiring lots of people and burning through scads of cash without a clear idea how sales would materialize.

These days, fast-growing companies need to demonstrate real revenue, from real customers, or they'll get yanked short by investors like a yippy dog at the end of its leash.

To identify the 50 companies that have experienced the quickest near-term growth, Baseline compiled a list of 304 publicly held software companies from multiple sources. The research was initiated in mid-2006 after all of the firms had filed reports for their most recent fiscal years, several of which ended in March.

The companies were then ranked based on year-to-year revenue growth from 2004 to 2005, or the closest 12-month periods within a quarter (see How We Ranked the Top 50).

Click here to see the 50 Fastest-Growing Companies rankings

One common thread for those at the top is that most don't actually sell software in the traditional sense—rather, they sell software as a service, in an "on-demand" model.

Of the top 10 companies, eight have software-as-a-service models: Click Commerce, Omniture, Synchronoss Technologies, Open Solutions, Salesforce.com, WebSideStory, Viewpoint and Kintera. Most of the others on the list, however, are more conventional software vendors. In all, 18 of the 50 offer hosted software services.

"On-demand is the right way to buy software," says Michael Ferro Jr., CEO of Click Commerce, a provider of supply chain management software and the No. 1 company on our list with 128% year-to-year growth. "Especially for our market, you have to touch outside constituents, so most people don't want it inside their four walls anyway."

Of course, growing quickly has obvious challenges. Business processes often must be improvised or managed on the fly, says Josh James, CEO of Web analytics company Omniture—No. 2 on our list, with 108% annual revenue growth. "Growing fast is an art form," he says. "You have to feel comfortable with the feeling that the wheels are about to fall off." The priority, James says, is keeping customers happy.

Read the full story on Baseline.com: 50 Fastest-Growing Software Companies for 2006