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October 5, 2010

Where is 3D on the Inc. 5000?

Where is 3D on the Inc - Image 1

Direct Dimensions one of few pure-play 3D firms on list

BALTIMORE—To get on Inc. Magazine ‘s 2010 list of the fastest growing privately-held companies means opening up your books to auditors and documenting your growth from 2006 through 2009. Of course, not every growing company has the inclination or time to play along.

That said, observers of the 3D imaging marketplace can find some good signs among those included on the Inc. 5000 list announced last month.

Topping the list from the 3D field is an engineering firm called Appareo, which grew 1,752 percent since 2006, moving from $295,668 in revenue to $5.5 million, partly on the basis of its proprietary 3D rendering and playback software that allows aircraft operators to replay individual flights in a detailed 3D environment, rendering true, accurate representations of the terrain that was flown over during the recorded flight. The company now employs 57.

There are also a number of other engineering and surveying firms who make use of 3D scanning and modeling, such as Dennis Corporation, which clocks in at #693 on the list, growing at a rate of 443 percent, moving from $1.5 million to $7.9 million in 2009 revenue, and now employing 92. You can see their 3D renderings and animations here.

SPADAC, at #2196 dabbles in 3D with its Signature Analyst, a geospatial predictive analytics tool, which can be a stand-alone client or plug into ESRI’s ArcGIS desktop products, integrating those capabilities in GIS, cartography, and visualization to enable high-quality map production. Signature Analyst extends ArcGIS by providing advanced spatial statistics and modeling.

Serving everything from the insurance to homeland security markets, the company grew 117 percent, from $8.8 million to $19.2 million in 2009.

None of these, however, would be considered a “pure-play” 3D company.

In that realm, there are certainly the stereo 3D players, like RealD, at #347, which licenses 3D technology use by many movie theater chains, and there are 3D animation firms like Understand.com, which is using 3D animation to educate patients with startling clarity about the nature of diseases and injury. Even a 3D TV maker like Vizio.

At #2,633, however, might be the only pure-play 3D imaging firm on the list that truly takes the real world and makes it digital for a living: Digital Dimensions, which grew 89 percent to $3.5 million in 2009 revenues, despite being a 15-year-old firm.

“I don’t know a company that does [3D imaging] as broadly as we do,” said Michael Raphael, the company’s founder. “Most people are smarter than me. They focus.”

Direct Dimensions, rather, is constantly looking for new ways to use 3D scanning technology to solve business problems. “One day I’m scanning Natalie Portman, then doing a nuclear submarine; the next day I’m at Walter Reed helping put soldiers back together,” Raphael said.

But what’s changed to allow 89 percent growth for a company more than a decade in?

“We spent 10 years trying to figure out where the market is going,” Raphael said. “What are the applications? What works for us economically? Believe me that we do thousands of dollars of free work just to prove what’s possible. We still get that. We’re doing so much stuff below market just to convince someone that this can work for them.”

Awareness is growing, though, and as awareness has grown, so has Direct Dimensions. Raphael less and less often hears, “laser scanning? What’s that?”

Education isn’t the only barrier to further growth, though.

“One of the challenges is that the technology moves so fast,” he said. “We spend a great deal of our time keeping up with what’s new and what’s out there. I don’t want to be blind-sided … There’s technology coming out of the woodwork. There are academics buried away in some college campus. There’s a guy doing it with video cameras at Cambridge, just taking video and you see it in real-time on the video screen. Is that going to replace the tools I’m using? When is it commercial? Can I test it? Who’s backing him? Can I invest?”

He laughs. He’s only half-serious about that last bit.

There’s also the problem of hardware and software leap-frogging each other. There’s the difficulty of moving and storing increasingly large blocks of data.

“We just upgraded our server to 56 terabytes,” Raphael said, and he estimates he’s gathered as much data in the last two years as in the 13 years prior put together. And you don’t want to throw any of it away. “The backups and the tape drives, that’s huge money,” he said. “The tapes alone are expensive.”

The investments are worth it, though, because he feels the 3D market remains poised for rapid growth.

“I do believe the web will move into 3D,” Raphael said. “There will be a demand for 3D content, and not just stereo 3D. Advertising will change. People will want to pick up things with their fingers and flip it around. 2D pictures are just going to be boring. There will be more and more 3D, and people will be scanning more and more things.”

And maybe a few more pure-play 3D firms will wind up on the Inc. 5000.

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