In 2013, the typical Fast50 company was based in New South Wales or Victoria, grew at more than 44 percent and made more money than ever from cloud computing and less than ever from hardware. There were most likely to have been in business for less than 10 years; the really fast growers had been in business for under five. There was a better-than-average chance that they made money from the finance and insurance sector.
Jarrod Bloomfield and his company, NGage Technology Group, tick almost all the boxes. This year, the Melbourne-based reseller hit the number one spot on the CRN Fast50 by growing the business at a stunning 264 percent from less than a million in revenue in 2012 to well over $2 million in the last year. Where NGage differs from many in the channel is the importance it has assigned to hardware. The company made a lot of money this past year moving tin.
NGage heads up the 2013 CRN Fast50, the list of Australia’s fastest-growing channel companies. The company is one of many new names on the list: in fact, 29 of this year’s Fast50 are new since last year. Growth is a fickle mistress, especially in an industry where it is often important to consolidate gains. Many of last year’s Fast50 companies told CRN that they missed the list in 2013 because it was their “consolidation year” following the major leaps forward in 2012. Backing up this anecdotal evidence of peaks and troughs is the fact only five of the 10 fastest-growing companies from 2012 made it back into the list in 2013. None of last year’s leaders made the top 10 again. In fact, the best back-to-back performer from last year’s top 10 was the 2012 winner, LeetGeek, which this year checked in at 27th.
Collectively, the 2013 Fast50 this year generated revenues in excess of $250 million. Last year, the figure was $585 million. Why? The absence of a few major players made all the difference: missing from this year’s list were five of the biggest companies from last year, including the two biggest firms, UXC Connect and Bridge Point Communications. Between them, these two powerhouses were worth $222 million in 2012.
Both of these companies have since been admitted to the CRN Fast50 Channel Elite (see page 35). The alumni group recognises past Fast50 participants who have surpassed $30 million in revenues. It is a way of recognising that the growth engines of today’s small and nimble operators drive them into the upper echelons of the business world. Today’s Fast50 companies are tomorrow’s industry leaders.
While the overall size of the pie is smaller, the speed of business among the Fast50 has picked up. On a like-for-like comparison, this year’s Fast50 fraternity has set a cracking pace. Their collective revenues are up 44 percent year-on-year. The average growth came in at 55 percent.
Six companies achieved triple-digit growth and three broke the double century. While NGage was the swiftest of the growth centurions, new Fast50 entrant Katana1 (2nd) was the biggest. The Sydney-based integrator finished the 2012-13 period with revenues in excess of $8 million. It was evident that high growth is not simply a matter of starting from a small base. The other companies to grow more than 100 percent were Outware Mobile (3rd) at 201 percent, Cloud Plus (4th) at 191.5 percent, CTO Group (5th) at 173 percent and SecureWare (6th) at almost 105 percent.
At the other end of the speedometer, there were nine companies that grew at less than 20 percent. But even here the achievements should not be undersold. One of those companies, Advent One (44th), is now selling more than $20 million a year. If it can keep its run rate going, it could well be a future candidate for the Channel Elite.
The top 15 of the 2013 Fast50 companies delivered annual growth in excess of 50 percent, the 20 companies in the mid tier grew at between 25.46 and 46 percent, while the bottom third still delivered a healthy clip of between 15.65 and 25.08 percent growth. Lucky last, Applaud, notched up 15.7 percent growth, trumping last year’s 50th-placed company, which delivered 8.29 percent.
Next: Staffing and state by state
Super staffing
Revenue per headcount is one of the best indicators of business strength. This year’s CRN Fast50 companies delivered average revenue per employee of $256,472, but there were some huge variances within the list.
PCS Australia (14th), for instance, generated more than $6 million per employee, largely due to a newly established structure (see box overleaf). Most companies were clustered between $150,000 and $260,000, and there were three companies who generated less than $100,000 per employee.
The majority of Fast50 companies had between 11 and 50 employees, although – as one might guess from the lower overall revenue – this year saw a larger percentage of smaller υ companies with one to 10 employees. There were no companies with more 100 staff.
State by state
Around the country, NSW provided the most Fast50 companies at 21. Victoria grew from 11 in 2012 to 14 entrants this year, at the expense of Queensland, which dropped three. The ACT has the fastest growing companies on average, but sometimes averages are the enemy of analysis.
There were only two entrants from the Capital Territory and one of them – CTO Group (5th) – achieved growth in excess of 170 percent.
Taking that into account, Victoria once again stood out. Its 14 Fast50 companies grew at an average of 69 percent and the state also punched above its weight in dollar terms, capturing 34 percent of Fast50 revenues with only 28 percent of the companies.
Victoria is the home of first- and third-fastest growing companies. NGage grew at 264 percent and Outware Mobile clocked over at 201 percent. This year’s smallest company, Paradyne (8th), also hailed from the state and came within half a point of being Victoria’s third centurion on the list.
The average age of Fast50 leaders was 39 and the youngest was Richard Stafford from last year’s first-placed company, LeetGeek, at 27. This is also reflected in the age of the companies in the Fast50. Two-thirds were less than 10 years old and four of the companies were founded only two years ago. Only six companies had personal experience of the Y2K bug.
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