Firms scrap for fewer deals Sharp focus on customer needs lifts sales, profits

When the human resources department at Vermont's Green Mountain Coffee Roasters Inc. decided recently to upgrade its software, executives at Kronos Inc. of Chelmsford saw an opportunity.

Kronos sales executives swooped in and, offering a software package that manages not only human resources functions but also payroll and time card tasks, stole the Green Mountain account from industry giant PeopleSoft (now part of Oracle Corp.). Last year, Kronos also closed sales to travel conglomerate Cendant Corp. and wrested Georgia-Pacific Corp.'s business from SAP.

Like other Massachusetts technology companies that moved up the Globe 100 list from last year, Kronos has been able to grow its revenue and profits, and grab market share, at a time when enterprise customers are spending more cautiously on technology.

''There's fewer dollars available, and there's more vendors vying for the business," said Jim Kizielewicz, the Kronos vice president of corporate strategy. ''We have to be able to provide our customers with a very strong return on their investment."

Pitching products and services as a ''value proposition" to skeptical buyers was a common theme among the state's fastest growing technology companies in 2004. Another was riding a technology wave, as Avid Technology Inc. of Tewksbury did with the continued transition of television broadcasting from tape to digital production, Analog Devices Inc. of Norwood with the rise of new consumer electronics products like large-screen television sets that use Analog components, and EMC Corp. of Hopkinton with the relentless growth of business and government data production and collection.

For Analog, which ranked 10th on the Globe 100, the secret has been investing in signal processing technologies that have broad applications in the marketplace. ''It's so difficult to predict which markets are going to develop and which aren't," said Jerry Fishman, the president and chief executive at Analog. ''Once it becomes clear which ones are going to win, if you don't have the technology ready, it's too late."

Judith S. Hurwitz, president of Hurwitz & Associates, a technology consulting firm in Waltham, said successful high-tech companies in the current environment share a number of traits.

First, they look at the market through their customers' eyes. ''The biggest mistake technology companies make is they get so enamored of their technology and how cool it is that they forget to look at how it is benefiting their customers," Hurwitz said.

Also, they focus on their core expertise and adapt it to changing conditions. Waltham's Raytheon Co., the state's largest technology company by revenue last year, regularly retools radar platforms for different weapons systems and military services. And unlike competitors that sell data storage gear as part of a larger package of computing equipment, EMC has assembled its own combination of hardware, software, and services built around its area of expertise: data storage.

Finally, Hurwitz said, they explain their offerings clearly. When sales representatives from Kronos call on supermarket chains, they talk to managers about how their ''Workforce Central Suite" helps solve real-life problems like assuring the right number of aisles are open at peak traffic hours for shoppers. ''Nobody will buy what they don't understand -- and that's true whether it's hardware or software or tissues," Hurwitz said.

All of these attributes are key in a slow-growth environment, where the real battle is to take market share from competitors. To meet its corporate goal of growing twice as fast as its overall market, EMC increasingly seeks to sell customers not only devices for storing data, but consultant-style services for managing data use. ''If you think of our strategy as information lifestyle management, we help our customers solve their problems," said Bill Teuber, executive vice president and chief financial officer of EMC, which landed at number 15 on the Globe 100.

Kronos, which ranked 20th, has likewise expanded its offerings to meet the changing needs of its customers. Where it once focused on keeping track of employee time and attendance, replacing time clocks with electronic badge readers, its software today provides a broader range of workforce management services -- helping companies hire, schedule, and compensate employees. ''If they call and they've got a problem, we get on it and fix it," Kizielewicz said.

The successful technology companies also have sought to broaden their customer base. Where Analog once sold its technology primarily to manufacturers and the military, its signal processing chips today power a growing number of consumer products, including many -- like cellphones, digital cameras, and DVD players -- that didn't exist a generation ago. Analog technology can account for up to $50 of the value of a $10,000 large-screen plasma television set sold today.

But like EMC and other tech companies, Analog invests heavily in research and development to stay ahead of the technology curve. ''We keep our foot on the R&D accelerator," Fishman said. ''Customers pay us for our innovation."

Robert Weisman can be reached at weisman@globe.com.