Many companies, by virtue of the business-to-business services they offer, remain out of the public eye. That was the experience of Winxnet, a Portland-based provider of information technology services founded in 1999. Until recently.
Driven by organic growth and mostly word of mouth advertising, the company has increased its revenue by 189 percent from 2009 to 2013, a performance that got it named twice to Inc. magazine’s fastest growing company list. Now the company is embarking on its next growth strategy — acquisitions.
Winxnet: Crunching the numbers
15: Years in business
75: Employees
3: Offices, Portland and satellite offices in Massachusetts and Tennessee
80: Percentage of customers in Maine
2: Number of times it has appeared on Inc. magazine’s 5,000 list of fastest-growing companies
$3.7 million: 2009 revenue
$15 million: Projected 2014 revenue
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In April, Winxnet acquired InfoSecurus, a Portland-based information security firm, for an undisclosed price. Winxnet currently has three additional acquisitions in various stages of completion, according to Winxnet CEO Chris Claudio. If they all reach the finish line, the acquisitions could double the number of employees to 150 and drive annual revenue to as much as $40 million by 2016. The acquisitions under way are all for companies in New England, including one based in Maine. The purchase of InfoSecurus was Winxnet’s first acquisition in its 15-year history.
The acquisitions may seem sudden, but Claudio said they’ve been part of the company’s strategic plan for a while. They serve three purposes: High-level talent is hard to find and sometimes it’s easier to gain that talent through acquisition; it allows the company to strengthen service areas; and it will aid in the company’s desired expansion into southern New England, according to Claudio.
Winxnet’s name may be familiar to drivers on I-295. Its sign has graced two buildings on Marginal Way alongside the highway. Its headquarters is currently in the AAA building at the intersection of Marginal Way and Preble Street. It is also expanding into the nearby office building that contains Gorham Savings Bank.
Claudio and Michael Williams, one of his business partners, founded the company after working together at Computer Science Corp., a Falls Church, Virginia-based company that contracted with General Dynamics to handle IT services for its companies, including Bath Iron Works.
They applied their experience implementing and managing large, complex computer systems to smaller businesses. The business landscape in 1999 was much different when it came to technology, Claudio said.
“It was like the Wild West,” he said. “It was a new era in technology. Today you couldn’t imagine having Internet without a firewall, but back then people were so excited to get Internet they didn’t really think about the impact of having it. So we brought our enterprise expertise down to small- and medium-sized businesses.”
A BROADER VISION
The company built its customer base through word of mouth. In fact, up until two years ago, Claudio was the lone salesperson. In the early days, Claudio and Williams, who is now president, added two more owners: Jason Lenardson, chief operating officer, and Curtis Henderson, chief technology officer.
In 2006, the company began taking a long-term strategic planning approach and asked the question: “How can we make this a great company and not just a fix-a-computer company?” Claudio said.
He credits the company’s success with its culture of “absolutely doing the right thing,” high ethical standards, admitting mistakes when they happen and a commitment to customer service. Claudio said that culture begins at the top with him and his three business partners.
“We all think and operate the same way,” Claudio said. “You know what, we’re going to make mistakes, but we’re going to own up to it and we’re going to admit we did it and try not to do it again, but we’re going to be honest about everything we do as a company.”
In 2013, Inc. magazine placed Winxnet on its Inc. 5,000 list of the fastest-growing private companies in America, ranking it No. 3,055 with 2012 revenue of $7.7 million, a 109 percent increase from its 2009 revenue of $3.7 million. The year before, it ranked No. 3,347.
Winxnet is now one of the largest IT services provider in the area. Its main competitor is Systems Engineering, also based in Portland.
Winxnet’s growth tracks that of the national IT industry. From 2001 to 2011, more than 500,000 IT-related jobs were created in the United States, an increase of 22 percent, according to analysis from the Information Technology and Innovation Foundation. IT jobs grew more than 95 times faster than employment as a whole, which only grew during that period by 0.2 percent, according to a 2013 report from the foundation.
“Winxnet has really progressed well,” said Joe Kumiszcza, executive director of TechMaine, a group that supports the state’s IT industry. “They’ve done well and are responsive to customers. The fact they’re scoring some gigs outside the state is big plus.”
Kumiszcza said there’s been talk about a so-called skills gap in Maine’s IT industry, but he’s skeptical. In general, Maine’s IT industry workers get paid 22 percent less than those in Massachusetts, according to data compiled by Kumiszcza.
“My big question to the industry is: Is there a skills gap or a compensation gap?” he said. “I think Winxnet has been able to pay their folks competitively so they’re able to gain market share and keep their employees happy.”
One market Winxnet has built a reputation for serving well is health care. As government regulations concerning electronic medical records and health insurance have increased, so have the IT complexities that health care organizations need to manage. For Intermed, a medical practice with 75 physicians and 500 employees in the Portland area, the increasing complexity became too much for the company’s internal five-person IT staff, according to CEO Dan McCormack. Four years ago, Intermed outsourced all its IT functions to Winxnet — everything from offering 24/7 technical support to employees to providing consulting services about needed capital investments in IT infrastructure. Winxnet offered each of Intermed’s five IT staffers a position if they wanted to stay on.
Winxnet had provided Intermed with some small-scale consulting in the past, so there was an existing relationship, which McCormack said was important as the company considered outsourcing.
“It was a big leap to outsource and we had to look at it a number of times to make sure we were comfortable, especially with something like IT where once the staff is gone it’s hard to re-create,” McCormack said. “So we looked carefully and thought long and hard before making the decision to outsource, and so that’s where the relationship was important because we felt that helped mitigate some of the risk.”
McCormack said Winxnet has excelled at its “ability to translate IT to business speak and for us to know where we have any sort of a risk from a business perspective and IT security perspective.”
“One of the best things is when, as a CEO, you don’t have to think about it,” McCormack said. “That’s the state we’re in. They’ve positioned us well so that IT is not one of my worries or concerns, to make sure we succeed in taking care of our patients. It’s probably the biggest compliment you could pay on the IT side.”
Now that Winxnet has reached a certain level of success, Claudio has begun encouraging entrepreneurship and exploring how the company can be more involved with the local business community. On May 6, Claudio spoke to about 100 people at PubHub, a monthly event attended by entrepreneurs and other like-minded individuals held at the Casco Bay Technology Hub on Danforth Street in Portland. After talking a bit about himself and Winxnet, he turned to the challenge of being an entrepreneur and growing a business. One thing he’s noticed, he said, is that Maine business owners tend to think too small. Later, Claudio expanded on that thought.
“There’s always a lot of bad news around business in Maine. I want Mainers to be proud. There’s some really great companies here — and I think we’re one of those companies — that are looking to build a brand and a reputation for the state of Maine beyond its borders, and looking to consult and help other organizations do the same thing,” he said. “I don’t know what it is, but we tend to just compare ourselves to the person down the road, when really we should be comparing ourselves in what we do to the best, no matter where they are. They may be down the road, but they could also be in Chicago, Illinois.”
Whit Richardson can be contacted at 791-6463 or at: wrichardson@pressherald.comTwitter: @whit_richardson
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