it is not just technology that makes these companies leaders in their sectors - it is about the quality of the people and their Intellectual Property
We take a look at the results of the 2008 Deloitte Technology Fast 50, and find out what the key trends are for the technology sector.
Commentary & analysis of the 2008 Technology Fast 50
The 2008 Deloitte Fast 50 results bear testament to the vibrancy of the UK technology sector, even in challenging market conditions. Overall growth rates have in fact increased in the last 12 months. Last year's winner would have been ranked third this year. The average revenue figures for the 2008 Deloitte Fast 50 are £17.3m.
David Halstead, Partner TMT practice and Fast 50 Chairman, Deloitte said: "The 2008 Deloitte Fast 50 provides a fascinating view of the evolving structure of the UK's tech sector, with software and internet businesses making up the bulk of the fastest growing companies. While their products and services are at the extreme cutting edge of global technology, it is important to note that it is not just technology that makes these companies leaders in their sectors - it is about the quality of the people and their Intellectual Property that makes these businesses the success stories they are."
To qualify for the Deloitte Technology Fast 50 award, companies must have met stringent criteria: to have been in business for over five years, be UK-owned, to have operating revenues of at least £34,000, to own proprietary technology or proprietary intellectual property that contributes to a significant portion of the company's operating revenues; or to devote a significant proportion of revenues to the research and development of technology.
Winning streak
The Deloitte Fast 50 winner for 2008 is Thunderhead Ltd, a London-based enterprise communications software house, with an astounding growth rate of 28,558 per cent. Its communications platform, Thunderhead NOW has been designed to replace a company's current in-house built communications tools with a single solution that integrates with enterprise CRM systems, allowing stored customer information to be utilised in communications. This allows accurate segmentation and targeting for b2c communications, and transparency and high speed for b2b communications such as investment bank trade confirmations.
Software developers are the most represented industry segment in the Deloitte Fast 50, with fourteen of the placed companies operating in this sector.
Glen Manchester, Thunderhead CEO said: "It's been an exciting year for us, and to win the 2008 Deloitte Fast 50 competition is the icing on the cake. We've been expanding extremely rapidly, and look forward to the additional national profile that this prestigious award brings."
It's been an exciting year for us, and to win the 2008 Deloitte Fast 50 competition is the icing on the cake
Wireless wonders
The Deloitte Fast 50 second and third-placed winners are Ubisense, an active radio data tag seller, and picoChip, a silicon design house. Growth rates were again phenomenal, at 15,324 per cent and 4,483 per cent respectively. While both businesses are founded on wireless technology and believe their growth is due to global market demand, their strengths are very different. Ubisense grew out of a Cambridge University research project, and has found niches for its accurate indoor and outdoor tracking in automotive production and aerospace, where locating tools is time critical, but search areas are vast. Bath-based picoChip has exploited a far bigger and ferociously competitive sector, in designing bleeding-edge wireless chipsets for global carriers. It has become the dominant WiMAX chip provider, and is currently working on building the next generation of LTE chips which will hit the market in 2010-2012.
Growth rates were phenomenal
Digital comes of age
The rise of digital continues apace, bringing a slew of household-name digital marketing agencies to the 2008 Deloitte Fast 50 rankings. Regional winners Bigmouthmedia (Scotland) and TH_NK (North) place great emphasis on overall strategy, and both stated that digital spend will increase in spite of challenging market conditions. The transparency and precision of digital campaigns will ensure that they are the best choice for budget-conscious clients, they believe.
David Halstead, Partner TMT practice and Fast 50 Chairman, Deloitte said: "The large number of software and digital marketing companies in the 2008 Deloitte Fast 50 reflects the growing maturity of online enterprises. The web is approaching the next stage of its evolution, and successful business models are becoming entrenched."
Outside the top rankings, the presence of digital agencies such as Greenlight, Digital Window, Coast Digital and Bluhalo are hot on the tail of their rivals, proving that digital marketing is a sector to watch in coming years.
An increasing number of Fast 50 contenders operate in the digitally-complementary IT and hosting space, leading examples being RapidSwitch, Comtec Enterprises, Daisy Communications, Rocela Limited and Xtreme Business Solutions.
Supply chain savings
The unifying theme is unquestionably cost reductions
The unifying theme is unquestionably cost reductions. Deloitte Fast 50 regional winners Thunderhead, Ubisense and Bybox, all believe this is their USP, and the reason that - in the words of the Bybox CEO: "the downturn is good news for us". All believe that sales are due to accelerate rather than slow due to the global credit squeeze, as businesses seek to cut bottom line costs. Thunderhead claims ROI in one financial year from deployment of their platform, and has installed in nine out of the top ten investment banks.
Ubisense's revenue expansion is directly due to the need to maximise efficiencies in automotive and aerospace industries, and the CEO believes that other vertical markets are ripe for the picking.
Midlands regional winner Bybox has enjoyed a year of expansion due to assuming more of their b2b clients'supply chain responsibilities, cutting costs by lowering stock levels and removing warehousing requirements. This Christmas the company will launch a direct competitor to Royal Mail and other incumbent consumer delivery propositions based on their national drop box network.
People power
The other key unifying theme identified by the 2008 Deloitte Fast 50 winners was recruitment. For companies such as picoChip, simply locating the specialist silicon architectural talent in a global market is the central ongoing challenge for the business. Others such as Xtreme face a similar more localised issue - internationally accredited cable engineers are rare in Aberdeen. Managing the operational issues raised by such fast growth was also a key concern among the winners, with key importance attached to increasingly onerous compliance requirements. Xtreme were particularly concerned by staffing issues: "my worst nightmare is accepting business, and then finding I can't fulfil it" said the CEO.
Geographical split
The 2008 Deloitte Fast 50 shows a strong bias towards the capital, with eighteen of the Fast50 headquartered in London, a further nine companies are from the south-east England area. Cambridge has proved to be a hotspot for technology growth, with three Fast 50 businesses in the area. The majority of successful online businesses were based in London, while Northern Ireland's sole Fast 50 constituent was a software firm. There are also four companies from the Midlands, seven from the North, three from the South West and five from Scotland.