Vredenburg Can Document Its Success in Growing Market

By Nick Wakeman, Staff WriterBy sticking to what it does best ? building document and workflow management systems ? Vredenburg Inc. of Reston, Va., has found a path to rapid growth.The company's revenue increased to about $40 million in 1999, compared with $26 million in 1998. Driving the growth has been Vredenburg's focus on specific applications, such as building systems, and developing products to help federal agencies manage programs, declassify documents and respond to Freedom of Information Act requests.Staying with its niche capabilities has been the key to Vredenburg's success, said Larry Den, vice president of Vredenburg Information Technology Group. "Our distinction comes in life-cycle and document management," he said.About two-thirds of the company's revenue comes from its work providing procurement and program management services to the Navy. Den's unit, which sells document and information management tools to other agencies, accounts for the remaining third and grew from $7 million in 1998 to about $13 million last year.Den's group was created as a separate unit in early 1998 to pull together the IT capabilities the company had developed while working for the Navy. That work relied heavily on document and information management skill, a specialty the company plans to nurture, he said.Sticking to a couple of specific market niches is the best strategy for survival and growth for small companies, said Bob Kipps, a senior vice president at the investment banking firm Houlihan, Lokey, Howard & Zukin in McLean, Va."They've stayed very focused on document management, as opposed to being a garden variety systems integrator or a reseller," he said.Large companies can afford to try many different things, an option not available to small companies, according to Kipps. So they need to focus on what they do well.Vredenburg has followed that strategy and gained a reputation for being the "distinguished provider" of electronic Freedom of Information Act (FOIA) and declassification systems, he said.The company should continue on its strong growth track in those areas, Den said, because all agencies are under pressure from Congress to speed up their FOIA processes, and intelligence agencies are under pressure from Capitol Hill to declassify more documents. Vredenburg is a strong player in both of those markets, he said.In 1996, Congress passed the Electronic Freedom of Information Act that required agencies to allow people to use the Internet to request and receive information. The deadline for compliance was March 1998, but most agencies have been slow to meet all the law's requirements, in part because of work being done to address year 2000 date-code concerns, Den said."Now we are in post Y2K, and you've got congressional scrutiny, and there is the desire to provide better constituent services," he said. "All those forces are meeting at the same place."Vredenburg has improved its FOIA software to help agencies make more documents available on the Web and to create the reports agencies need to supply to Congress, Den said.Other new features include improved request management tools, a payment manager, audit capabilities and letter generation.The software also can be used by small FOIA offices that get few requests and large offices such as the FBI where more than 800 case officers work, Den said.Vredenburg customers include the Drug Enforcement Administration, the FBI, the Justice Department and the National Security Agency.The company also is taking its document management capabilities to other aspects of the law enforcement community, such as case management. In August, the FBI is expected to unveil its Innocent Images Initiative, a case management system being built by Vredenburg to provide case management of child pornography investigations and prosecutions.In June, Vredenburg won a contract with the Pentagon's National Reconnaissance Office for a system to manage its declassification process. Under an executive order, agencies must declassify information that is more than 25 years old and make the documents available on the Web. The documents are to be automatically declassified unless the agency can justify why they shouldn't be.Vredenburg officials declined to state the value of the NRO and FBI contracts.The government likely will spend $3.3 billion on document and information management systems in 2000, and the market is expected to grow 25 percent a year, said Marilyn Wright, vice president of strategic alliances at AIIM International, an association of makers and users of information management systems. And while there is no market leader, "Vredenburg's name comes up a lot," she said."With the mandates and the growth of the e-business model, agencies have to convert their paper-based systems to electronic systems," she said.