S&T System Integration & Technology Distribution

Austria. Rank: 54. Sales: ¬209.3 million

After spending 17 years with Hewlett-Packard Co. (HPQ ) marketing computers and other high-tech gear in Central and Eastern Europe, Austrian-born Karl Tantscher knew the region cold. So in 1993, four years after the fall of the Iron Curtain, he and a partner established a consultancy in Vienna, called S&T System Integration & Technology Distribution, dedicated to selling technology products in the former Communist states. "People in Central and Eastern Europe were happy just to get a PC," Tantscher says. "We knew the whole boom lay ahead."

True enough, but it took several years to materialize. In its first five years, S&T limped along with less than €25 million in annual revenues. It wasn't until after a 1998 initial public offering that raised €22 million on the now-defunct Easdaq exchange that S&T really took off. The company snapped up nine smaller rivals, helping it to expand to 20 countries, from the Baltics to the Black Sea. Revenues have since soared nearly tenfold, to €209 million last year, and the S&T workforce now numbers 1,200. "The reason for our success is that we always focused only on this region," says Tantscher, 57, who serves as chief executive.

S&T's client roster is impressive. The company installed fiber-optic systems for Polish telco Netia, built the real-time database for Russia's leading currency exchange, and outfitted the Slovenian army with a new electronic command and control system. Analyst Ralf Burchert of Erste Bank in Vienna figures revenues will grow 10% this year and that S&T will post a profit after a small loss in 2003 due to expansion costs.

Still, there are plenty of challenges. S&T is trying to shift from reselling and installing equipment -- a low-margin business -- to more profitable services such as outsourcing and consulting. And the growth opportunity in Eastern Europe is attracting competition from information-technology services giants like IBM (IBM ) and Capgemini. Yet, as Tantscher points out, S&T is increasingly being tapped as a subcontractor by these "big boys," thanks to its roots in the region. Looks like his bet on Eastern Europe's future is paying off.

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