Talk about changes: 69 firms dropped from Top 100 since 2003

After my recent Top 100 webcast where I talked about market trends, I got an email from a friend with an intriguing question.

He told me that since 2000, half of the companies had disappeared from the Fortune 500. Did I know how many had left the Washington Technology Top 100?

I didn’t. So I started counting back to 2003, the earliest Top 100 that we have online.

The number shocked me -- 69 companies from the 2003 Top 100 were not on the 2017 Top 100. Each year there is some turnover on the list but it always seemed remarkably stable. This year we identified 14 newcomers but about half had been on the Top 100 before and had dropped off for whatever reason and now had returned.

That is a pattern that repeats itself each year. So while I expected change since 2003, I thought it would be something in the 40s and definitely not 69.

But as I dove a little deeper a couple patterns emerged. The majority of companies disappeared from the list because they had been acquired. Others dropped because they divested their government business. And a very, very few went out of business.

Some disappearances such as Computer Sciences Corp. are very recent. CSC famously merged with Hewlett-Packard’s enterprise services business in April to form DXC Technology.

Prior to that deal, CSC had spun out its government business and merged it with SRA International to create CSRA. But that took out SRA, another Top 100 company in 2003.

I’ll paste the entire list at the bottom of this post. It is an interesting stroll down memory.

You’ll be quick to recognize many of the missing names -- EDS, Qwest Communications, ITT Industries, GTSI and American Management Systems.

WorldCom and BearingPoint were both on the 2003 Top 100 until bankruptcy forced them to sell out.

Oracle is no longer on the Top 100 but they are still very active in the federal market. They’ve largely backed away from selling directly to government customers.

Interestingly, the most active buyer of 2003 Top 100 companies was General Dynamics, which eventually bought four companies from the 2003 Top 100 – Anteon, Veridian, Vangent (Pearson on the 2003 Top 100) and Digital Systems Resources. Lockheed Martin was only involved in two deals among the 69 companies.

There are a few on the list who made an acquisition but later were acquired themselves. Perot Systems acquired QSS Group in 2004. Dell then acquired Perot in 2009. Camber acquired Avaya’s government services business in 2014. Then Huntington Ingalls bought Camber in 2016.

But what does the list below tell us about the market?

In 2003, the market was just at the beginning of the wars in Iraq and Afghanistan. We were only two years into the war on terrorism. The rising tide of government spending had just begun. Many  acquisitions on the list reflect that build up as companies moved quickly to add scale and capabilities to take advantage of the growth in the market. Of the acquisitions on the list, 26 occurred between 2003 and 2006.

Conversely, many of the divestitures represented on the list came after the growth of government spending had peaked. These deals such as the 2011 ITT break up and Honeywell’s divestiture of government services in 2016 reflect strategic choices as companies moved to get out of the services business as the market tightened.

Change is constant in the market so it is difficult to say who on the 2017 Top 100 won’t be on the 2030 Top 100. Will we see 69 changes? Maybe but we’ll see change no matter what, so you best be prepared.

Here is the list of the 2003 Top 100 who are no longer Top 100 companies:

Computer Sciences Corp. -- Split and merged via DXC and CSRA in 2016

WorldCom -- Bankruptcy in 2002, and acquired by Verizon in 2006

Electronic Data Systems Corp. -- Acquired by HP in 2008, then HPE services spin-mergeed with CSC to create DXC.

Anteon -- Acquired by General Dynamics in 2006

Titan -- Acquired by L3 Technologies in 2005

Affiliated Computer Services -- Acquired by Xerox in 2009.

GTSI -- Acquired by Unicom in 2012

ITT Industries -- split to help create Exelis in 2011

Veridian -- Acquired by GD in 2003

ARINC -- Defense group acquired by Booz Allen in 2012

Consolidated Engineering Services -- Acquired by Emcor in 2003

Honeywell -- sold services business to KBR in 2016

SRA -- Merged with CSC U.S. public sector to form CSRA in 2015

DigitalNet -- Acquired by BAE in 2004

BearingPoint -- Bankruptcy then Acquired by Deloitte and some pieces by Keane and Attain in 2009.

Halliburton -- Moved out of government services after 2012

PlanetGov -- Changed name to Apptis in 2004 and then acquired by URS in 2011.

PEC Solutions -- Acquired by Nortel in 2005

SRI International -- Dropped off after 2016

Telos -- Dropped off after 2014

Force 3 -- Acquired by Sirius in 2016

Oracle -- Strategic changes to move away from direct sales model, eventually dropped off the list in 2012.

QSS Group -- Acquired by Perot in 2007

American Management Systems -- Acquired by CGI Group and CACI International in 2004.

RS Information Systems -- Acquired by Wyle in 2008

Sprint -- Strategy de-emphasized federal, dropped off list after 2011.

Sytex Group -- Acquired by Lockheed Martin in 2005

Datatrac Information Services -- Acquired by CSC in 2006

Dynamics Research Corp. -- Acquired by Engility in 2014

Information Systems Support Inc. -- Acquired by CACI in 2006

Avaya -- Sold its government services business to Camber in 2014

Perot Systems -- Acquired by Dell in 2009

MPC Computers -- Formerly part of Micron Electronics, acquired by Gores Technologies, closed in 2009.

Pearson --Acquired by Veritas Capital, renamed Vangent, sold to GD in 2011

Planning Consultants -- Acquired by Amsec LLC in 2003. Amsec was a SAIC-Northrop Grumman joint venture. In 2007, they divided the JV and the Planning Consultants portion went to SAIC.

PC Connection -- Dropped off list after 2004.

Stanley Associates -- Acquired by CGI Group in 2012

NCR -- Dropped off the list after 2003.

STG -- Dropped off the list after 2016

United Industrial Corp. -- Dropped off the list after 2007

Buhrmann NV -- Dropped off the list after 2003. Eventually became part of Staples.

Integic Corp. -- Acquired by Northrop Grumman in 2005

Tybrin --Acquired by Jacobs Engineering in 2010.

JHM Research and Development Inc. -- Dropped off the list after 2007

Milcom Systems -- Acquired by VT Group Plc in 2007

Siemens AG -- Dropped off list after 2012

Digital Systems Resources -- Acquired by GD in 2003

EDO Corp. -- Acquired by ITT in 2007

Eagan McAllister Associates -- Acquired by Amsec in 2003

Science & Engineering Associates -- Acquired by Apogen Technologies in 2004, which was eventually acquired by QinetiQ North America, which later sold its services arm to Vencore.

Government Micro Resources -- Acquired by PC Mall Gov in 2006

Resource Consultants -- Acquired by Serco in 2005

SI International -- Acquired by Serco in 2008

ITS Services -- Acquired by Arlington Capital in 2003, name changed to Acentia, then acquired by Maximus in 2015.

Aspen Systems -- Acquired by Lockheed Martin in 2005

EMC Corp. -- Acquired by Dell in 2015 and now part of Dell Technologies.

Advanced Technology Systems -- Acquired by Federal Services Acquisition Corp. in 2007

SBC Communications -- Acquired AT&T in 2005, kept AT&T name

Qwest Communications -- Acquired by CenturyLink in 2010.

Computer Associates -- Fell off list after 2006 due to strategic changes

Intergraph -- Acquired by private equity in 2006, then acquired by Hexagon AB in 2010, rebranded Hexagon Safety & Infrastructure.

Camber -- Acquired by Huntington Ingalls in 2016

Megapulse -- Only appearance on the Top 100 at No. 93

Computer & Hitech Management Inc. -- Acquired by FCBS Inc. in 2005.

MTC Technologies -- Acquired by BAE Systems in 2007

Northeast Energy Services -- Only appearance on Top 100 at 97.

SMF Systems -- Only appearance on Top 100 at 98

MicroAge -- Only appearance on the top 100 at 99

Orkand -- Acquired by Harris Corp. in 2004