Full Service
Carol Pickering and Kim Girard
"The consulting companies that do it all, or at least say they can."
Jerry Greenberg, Sapient's co-CEO, has a reputation in the services industry as paranoid. That paranoia has served him well. He and his business partner, Stuart Moore, both veterans of the once red-hot consultancy Cambridge Technology Partners, started Sapient nine years ago, building it into one of the most-respected services companies in the industry.
With roots as a computer systems integrator, Sapient is known for delivering top-notch, complex Net work to an impressive list of Fortune 1000 clients, including United Airlines (redesigned Website) Nordstrom Shoes (built a Website that offers more than 20 million pairs of shoes) and Hallmark (built Hallmark.com).
Founded in 1991, the firm is a grandparent among newbies such as Scient and Zefer. Sapient's average deal runs larger than these companies as well, typically totaling about $5 million and climbing to about $15 million. Sapient is bridged between behemoths such as IBM Global Services, which reported $3 billion in Internet services revenues alone in 1999, and scores of smaller companies.
"We're not one of the hype companies," says Greenberg, noting the company's recent addition to the Standard & Poor's blue-chip index. "We've been around for nine years and to be considered a blue-chip is a validation."
Analysts say the company differs from most in the industry because of the quality of its employees, its low turnover rate, the size of its contracts, and the length of its relationships with clients, some of which have lasted seven years. The company doesn't outsource contracted work, as many do when they commit to bigger deals than they can handle. Unlike larger players, such as Andersen Consulting, Sapient offers strong creative services, added through its 1998 acquisition of Studio Archetype. Sapient does 83 percent of its work for Fortune 1000 companies; the rest for dot-coms. About 60 percent of Sapient's work is done for existing customers.
"They're the most buttoned-up of any firm we've ever worked with," says Kevin Farnham, CEO of Method, a San Francisco-based boutique. "They've done what the small companies haven't been able to prove yet," adds Greg Gould, a Goldman Sachs analyst who follows the services industry. While some analysts note Sapient's lack of penetration in new markets abroad (the company has offices in Sydney, London, and Milan) Gould argues that overseas expansion, when not carefully planned, adds a layer of risk for companies that don't understand new local markets. Greenberg says the company decided in 1996 to postpone international expansion to concentrate on the Web.
Greenberg only need look at his former company, Cambridge Technology Partners, with its high executive turnover rate and fall from Wall Street grace, for an example of what can happen when a good company loses momentum.
"That could happen to anyone," he says. But Greenberg is confident that the company's culture, which he describes as open, direct, and energetic, along with a strategy of always looking over its shoulder, should help Sapient prevail. "We're paranoid about plenty of things," Greenberg says. "It pays to be skeptical and paranoid. Just because the past is great, if you assume the future will be, you'll be toast."
