What Fastest growing S/W companies have common today? A Case Study

The statistics keep changing so is market capitalization and hence so is market reality? What trends we see today software industry is following:

There are phases in life of company and market..One day we see the shares of one company rising 30%…but is it  able to sustain momentum? Company which does consistently good over period of time is winner. There is no thumb rule as such but it depends on environment time and technology evolution.

When i see today? % change in valuation fastest growing company i see today?

Authenticate Holding Corp: So What makes its share go on rampage today? what it does? Does its business make it hot? 

Authentidate Holding Corp. (Authentidate) is a provider of secure health information exchange, workflow management services and telehealth solutions. Authentidate and its subsidiaries provide software applications and Web-based services that address a variety of business needs for its customers. The Company’s Web-based services are delivered as software as a service (SaaS) to its customers interfacing seamlessly with billing and document management systems. These solutions incorporate multiple features and security technologies, such as rules based electronic forms, intelligent routing, transaction management, electronic signatures, identity credentialing, content authentication, automated audit trails and remote patient monitoring capabilities. Both Web and fax-based communications are integrated into automated, secure and trusted workflow solutions.

Yes we see good Trends there?Fundamental Analysis: Health reforms makes it good contender for company in demand.Also it has latest good in demand SAAS model. but only today share bounced what has happened over year? Financial indicators down share value down.

But when I see financial indicators :

Key stats and ratios

Q2 (Jun ’11) 2011
Net profit margin -274.01% -242.79%
Operating margin -274.01% -255.85%
EBITD margin -218.03%
Return on average assets -62.81% -43.25%
Return on average equity -153.35% -73.09%
Employees 37
Carbon Disclosure Rating
So we can see though comapany is in good business but still it cannot make up as growing company over period of time.
But is share has risen today due to News that it will grow 9% upto 2020. Is it hot? In my view its not?
What is hot for long term which can grow fast is company with sound business and technology + vision? what vision it brings make it hot? Microsoft beat IBM, Google beat Microsoft, Apple beat everyone all due to vision:
Let see such companies:

Some company grow fast and continue to grow because they have somthing in store for future…there valutations are not dependent on current technology but about future…

see details what concur and Salesforce combination can do..concur has nearly all airline as its customer.. http://www.concur.com/

Though the business in old but why is it hot? 1. latest technology : SAAS/cloud computing  but industry is still old and many players:Expense Management. Recently, Salesforce.com tied up with Concur for expense managment applications. Salesforce.com Cloud based CRM tool which uses its onw proprietory language for customization of force.com CRM ERP) has tied up with .Both company valuation are high as ever … They also provide SAAS..but not packaged one one that is comming with all ground up technology not dependent on any stack..also with all features of Cloud computing. Also solving latest problems like making ERP in terfaces easy to use configure..reducing TCO by use of virtualisation of datacentre and reducing huge ERP update cycle ..(Read my other blog for more details).All big 4 are responding by   acquiring Cloud companies.

Then I see another set of companies which are driven by what Gartner calls “ability to execute“. companies like microsoft which re-engineer product fast put similar looking product like Junit ( unit testing framework in Java and we have Nunit in .NET) not to say otherwise AJAX was first created Microsoft when it started work on ActiveX objects..but it was exploited by hackers to put any install file on client system.

1999: Microsoft created ActiveX objects.XMLHttp ActiveX control.which was later adopted by Mozilla,firefox,safari,opera as XMLHttpRequest.

Response Microsoft adopted XMLHttpRequest Model in Windows 7.

Java: Applet See the competition: Then came applets by Java which were more platform independent and safe…These allow compiled client-side code to load data asynchronously from the web server after a web page is loaded

Microsoft: Iframe element to HTML which also enabled asynchronous loading.utilized its iframe technology to dynamically update the news stories and stock quotes on the default page for Internet Explorer.Microsoft filed a patent on the basic Ajax technology, which was granted in June 2006, related to ASP.

Google was the first to deploy Large scale AJAX implementation in everything from Gmail, Google maps.


Same way know Cloud,virtualisation,SAAS but nothing can beat innovation not even if other company is ready to copy it faster..Apple shown it.Now apple is nearly double size of Microsoft. Even when many things microsoft inherited from Apple.

2. Vmware was the first company actually started revolution silently with bare metal hypervisors ESXi and VSphere for managing all virtualisation.We can just copy paste OS into machine just like files.All due to hypervisors. Althought there were Vmware fusion product for non hypervisors..but We cannot get same fault tolerance of dynamic migration of machine. thus defining What we call it IAAS today..it had record valuation at one time. That was vision..It had astonishing financial ratios never dreamt of.

What happen then today Vmware is there are hot but out to hottest list? Reason not taking it to next level. Redhat took it with KVM Kernal based virtual machine. Solaris LDOM..and so on…Now Vmware released PowerCLI and API for developers but race is too fast to be with it.Amazingly it has become 50 billion dollar company. but other are taking lead..It has Lost its ability to execute.Today KVM is beating ESXi.

Vmware ESXi in Red losing to KVM in blue from Redhat