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Although rankings are based on gross government revenue, success is often measured by rate of growth. Several companies are growing at rapid-fire clips.
L-3's growth is impressive, but comparatively small compared with the fastest-growing solution provider, ITT Defense Electronics & Services (No. 20), whose revenue skyrocketed 218 percent. In 2005, the company reported $411 million in public-sector sales. In 2006, the company kicked into overdrive and propelled sales to $1.3 billion, achieving growth of 218 percent. ITT is one of three GovernmentVAR 100 companies with triple-digit growth.
Carahsoft Technology (No. 76) grew its public-sector channel business an astounding 150 percent, increasing income from $36.4 million in 2005 to $91 million in 2006. And MTM Technologies (No. 90) more than doubled its government business; its income grew 137 percent to $48 million.
Government consulting firm Booz Allen Hamilton (No. 18) was the fourth fastest-growing integrator; its revenue of $1.6 billion was an increase of 81 percent over 2005. Fujitsu Consulting (No. 87) rounds out the top five on the fast-growth list with 79 percent revenue growth--from $31 million in 2005 to $55 million in 2006.
Breaking Down the Silos
As much as there's a distinct difference between the public-sector and commercial channels, there are significant differences between the four pillars of the government channel.
The federal market--marked by massive contracts and complicated procurement processes--is vastly different from the state and local markets, each of which has its own rules of engagement. And the education market is fractured between the public secondary schools that must submit to federal, state and local regulations--depending on the source of IT funding--and higher education (colleges and universities), which act like private companies but are subject to government regulations as well.
Winning in each of these government silos is complicated. While not all solution providers and integrators break out their public-sector revenue into subcategories, the GovernmentVAR 100 is replete with solution providers and integrators that clearly have mastered the intricacies of each submarket.
Capgemini (No. 11), for instance, is one of only two GovernmentVAR 100 companies to make it into the top 5 list for each of the submarkets. The integrator is No. 5 on the federal list, with $1.9 billion in revenue; No. 1 on the state and local lists, with $417 million and $277 million, respectively; and No. 3 on the education list, with $55.5 million.
The other company to make all four lists is Federal Technology Solutions (No. 12). Its federal revenue ranked fourth, at $2.1 billion. Its sales were $125 million in the state, local and education markets.
Software House International (No. 28) demonstrated strength in the state, local and education markets. It earned a fourth-place state ranking, with $189 million in revenue; fourth place in the local market, with $115 million; and first place in education, with $138 million.
While Northrop is the top overall company on the GovernmentVAR 100, rival Lockheed snuck by on the top federal solution providers list. Lockheed reported earning $10.7 billion of its public-sector revenue through federal sales. Northrop reported that 4 percent of its revenue came from state and local sales; at $10.6 billion, its federal sales fell just behind Lockheed Martin's.
Next: Who will make next year's list?
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