For all the discussion about froth and bubbles, the technology sector of the U.S. economy continues to surge apace. Far from slowing down, the fastest-growing companies are actually accelerating. Over the past three years, the companies on Business 2.0’s 100 Fastest-Growing Technology Companies list—the B2 100—saw sales grow by 33 percent and profit by 90 percent. This performance was amply rewarded on Wall Street as investors drove their shares up by 32 percent.
Leading the charge this year on Business 2.0’s list is Akamai Technologies, which provides content delivery services to companies like Apple and MTV Networks. It not only vaulted onto the list but went straight to No. 1, thanks to the explosion in music and video downloads.
Health care also continues to boom—nearly 20 percent of the B2 100 companies are profiting from medical-related services. These companies also impacted the U.S. economy by hiring 90,000 people last year, expanding their payrolls by an average of 21 percent, and added $56 billion to their market value.
The B2 100 provides intriguing business lessons from some of the smartest companies on the planet; some are recognizable and some are not. Apple, eBay, and Yahoo made the list, of course, but so did interesting success stories like Zimmer Holdings, which created the first knee implants designed specifically for women, and Relm Wireless, whose two-way digital radios have been selling like iPods to government agencies in the post-Katrina era.
The leading companies on this year’s B2 100 Fastest-Growing Technology Companies list include:
1. Akamai Technologies
How big is online video and music? Internet traffic is surging, and companies like Apple and MTV Networks rely on the content delivery company’s technology to get the digital goods to their customers.
2. iMergent
Mom-and-pop businesses are increasingly moving online, and iMergent’s training programs help them set up shop on the Web. Taking its workshops abroad has helped drive new growth. Financial restatements have added to revenue gains.
3. Palomar Medical Technologies
These days even 20-somethings are opting for a nip and a tuck. That’s spiked demand for Palomar’s six-figure gear, which uses lasers and light pulses to tighten skin, vaporize blemishes, and remove unsightly body hair.
4. InterDigital Communications
Mobile devices are hot, but InterDigital’s wireless software patents are hotter. More than half of the company’s 2006 revenue came from an intellectual property settlement with Nokia. Now it has Samsung in the crosshairs.
5. CyberSource
Online fraud has become a growth industry, to the tune of $3 billion a year. That’s meant big bucks for CyberSource, with companies like Google and Yahoo using its secure payment services to protect themselves and their customers.
6. Perficient
CTOs are opening up their wallets again—and hiring IT consultancies to tell them what to buy. This one went on a spending spree itself, snapping up independent consulting firms like iPath and Vivare to fuel its growth in 2006.
7. Lam Research
Tiny circuits are big business. Consumer electronics giants Toshiba and Samsung are buying Lam’s machines, which can etch circuits as fine as 45 nanometers across for flash memory chips used in mobile phones, iPods, and other gadgets.
8. Ceradyne
As the wars in Afghanistan and Iraq drag on, orders from the Pentagon are up for Ceradyne’s ceramic armor—lighter than steel, more durable than plastic—to protect soldiers, helicopters, and other military vehicles.
9. F5 Networks
Business applications are moving from the PC to the Web, and that means more and more companies are depending on F5’s appliances to smooth the transition online by balancing Internet traffic on their corporate servers.
10. Armor Holdings
Its labs design high-strength fibers, lightweight ceramics, and bulletproof polymers for tougher helmets and vehicles. Government spending on new military vehicles beefed up business, as did the purchase of manufacturer Stewart & Stevenson.
Noticeably absent from this year’s rankings is Google. It’s just slightly too young to be considered for the B2 100, which requires three years as a public company to qualify. But the gravitational pull from the Internet’s brightest star was certainly felt: It helped drag down the value of rival Yahoo by a whopping $21 billion.