September - 2001 - issue > Cover Feature

That’s right — what a great time to come up with 100 companies that show the characteristics of long-term viability, sustained growth, business focus, profitability, and customer, shareholder and employee value, while at the same time display the glamour and the innovation that have always accompanied the high-tech sector. It is a 100 that have traversed the hype, are riding through the present tough environment with integrity, hard work, vision and control. What a great time to test every entrepreneur, professional and investor’s real merit, drive, ideas and commitment, and separate the men from the boys.
The result is 100 companies that have a real chance to: survive and succeed even in the tough market, set new trends in the marketplace and make a difference in the business and technology landscape. Welcome to a new, seasoned, strong and proven si100.

This has been the most difficult and, at the same time, the quietest year for the si100. Difficult because we raised the bar for selection of companies far higher than ever before. Each company included this year has paying customers, or is definitely on the verge of signing them. There are no companies founded in 2000 or later, unless they have been spin offs, or have displayed extraordinary traction with customers. In this list, there are no true startups (Look out for our next issue in which we will profile some of the hottest, most well-funded startups, in the U.S. and in India). Quiet, because there were nearly no chirpy public relations companies (or VCs!) calling us off the hook, trying to make sure we had their clients or portfolio company included.

For us, this has been a really satisfying experience. One of the biggest challenges of covering the high-tech sector is its constantly changing character. We thought last year that companies in the consumer Internet space were eligible to be included in the si100 list. This year we haven’t included even a single one of them. Regardless of the fact that “dot-com” has become a bad word, most Internet and e-commerce technologies have become commodities, and Internet consumer e-commerce companies are as much high-tech companies as your neighborhood convenience store. Their removal from the list is a matter of evolution — of companies, sectors and this listing itself.

We have consolidated last year’s two categories — Internet - Consumer and Internet - Business services, into one — Internet. This category and its 11 companies represent Internet pure plays: their entire business model depends on the Internet, even though they may be serving non-Internet companies. The business outlook is perhaps the most severe for this set of companies, even though they have shown signs of long-term sustainability, and are truly eligible for being in the list.
The software sector this year has looked longingly at tightening corporate IT budget purse strings. The going will be very tough, as customers look for really compelling mission-critical solutions. Commoditization remains rampant and prices are falling amidst hyper-competition. Differentiation, albeit hard to find amongst the hordes of “intelligent-e-business-software-provider-that-will-streamline-your-company’s-workflow-among-employees-customers-and-suppliers,” is nevertheless the key.

The semiconductor sector has been rushing downwards, looking for an elusive bottom. Many companies in this space, though they have enough cash in the bank to tide them over, are experiencing 50-80 percent drops in revenues! Yet, this sector remains a big component of the si100, because it is the prime driver of growth in the high-tech sector. It is required that companies have the financial strength to weather the tough times.

The breath has been sucked out of the high flying telecom/networking/ communications market. Yet, this perhaps remains the sexiest, most competitive of all sectors, based on its sheer potential for transforming the way we live and work, the malaise notwithstanding. Unlimited bandwidth remains a dream, and you will find quite a few companies in this list chasing it as an end goal.

As we have been writing for the past several months, the IT services market is simply not what it was one or two years ago. In the current scenario, it will be difficult to ramp up small companies, let alone start new ones. The existing large companies, headquartered in the U.S., or in India or anywhere else, are all behaving like startups, displaying the nimbleness required to successfully pounce on every available piece of the pie.

With these quick words, dear subscribers, we present, the year 2001, si100.