Know the problem, plan accordingly

ESCgov Inc. makes its debut on the
Fast 50 list in the No.1 spot, having
recorded $46.5 million in revenue
in 2007, for a five-year annual growth rate
of 275.59 percent.

Raj Mittu, chief executive officer, and
Guy Speers, president, were Northrop
Grumman Corp. employees
involved in the leasing
and financing of hardware
and software at a
time when federal agencies
were experiencing
soaring costs for such
services. That's when they
hit on the business plan for ESCgov.

"Agencies want to be able to account for
the value received for every dollar they
spend," Speers said.

In 2003, Mittu and Speers founded
McLean, Va.-based ESCgov, which stood
for Enterprise Solutions Corp. To meet the
government's growing demand for greater
accountability, the company replaced
the traditional time ? and materials ?
billing model with what they call a nextgeneration
method that permits agencies
to pay only for the information technology
services they use ? as much or as little as
needed. It is akin to the homeowners'
electric usage charges, Speers said.

ESCgov used that model as a computer
services subcontractor for the Defense
Information Systems Agency, which did
not want to own mainframe computers or
be charged flat fees for contractors' time
on site, Speers said.

Under the contract, DISA pays ESCgov
according to its monthly use. "The processing
capacity that they are acquiring
through the products and services can be
measured in MIPS, or millions of iterations
per second," Speers said. "We've created
a level of accountability within our
structure that allows government to actually
map the value received for every dollar
spent."

ESCgov began as a vendor specializing
in software as a service and hardware as a
service primarily to intelligence community
and Defense Department customers,
including DISA, the
Defense Intelligence Agency, and
the Treasury and Homeland
Security departments.

Although the company had
numerous opportunities early to go
into the services business, "we intentionally
stayed away from that until we
had a real strong core capability to deliver
our mission, and that is the on-demand
and utility-based models," Mittu said.

"Now that we've established ourselves
in the industry, the opportunity to continue
to grow in areas where we offer
tremendous value to our government customers
is really starting to take place," he
added.

"The risk that we run is growing a little
too quickly," Mittu said. "Opportunity is
always there to do that. We want to move
forward as it makes sense and when it's
the right thing to do."

Mittu said that in the next five years, he
wants the company to expand its core
capabilities and services offerings. "The
upcoming years are looking extremely
promising for us. And 2008 is looking
like it's going to be substantially greater
and larger than any of the five years that
we've had previously."

Mittu said he would advise any
company just starting out in business to
understand what the problem the company
is organized to solve. He said that
knowledge has opened doors for ESCgov
to work with many of its government customers.

"It comes down to knowing what
we do and knowing what we don't do.
And that's the clarity."

As for ESCgov's competition, Speers
said he is not aware of another company
that offers both software as a service and
hardware as a service in a secure federal
environment. "So we feel pretty good
about that ? for now."

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