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February 17, 2006

Avanade bares financial details

Posted by Mark Watanabe at 2:10 PM

Minding securities filings, Deputy Business Editor Rami Grunbaum reports this:

It's time to open the kimono, as they say, at Avanade, the large but low-profile IT consulting company co-founded by Microsoft and Accenture.

The Seattle-based venture has filed its first financial report with the Securities and Exchange Commission, giving a rare glimpse into one of the region's least-known technology companies.

Profit: More than doubled last year to $31 million.
Revenues: $422 million, up 41 percent in 2005.
CEO salary and bonus: 47-year-old Mitchell Hill made $766,733, a nice bump from 2004's $536,150.

Companies that aren't publicly traded or preparing an IPO usually do whatever they can to keep such information out of the public domain. After all, it's bound to be examined by business rivals, customers, employees and the management's golfing buddies.

But since its launch in February 2000 -- happy birthday! -- Avanade has granted stock options to more than 1,100 employees. And any business with more than 500 security holders must file with the SEC, so Avanade is now a reporting company. (Like Tully's Coffee, only without the perpetual red ink.)

Avanade helps major businesses deploy Microsoft's .Net technology, mobile applications and "business intelligence solutions," as the document puts it. But larger competitors as well as "the growing use of offshore resources" are putting pressure on its operating margins.

Other interesting tidbits:

Employees: 2,600, plus 1,100 Accenture employees under long-term contracts.
Locations: Offices in 21 countries.
Brothers on the payroll: Just one. Mark Hill -- brother of the CEO and chairman of California's Marin (County) Republican Central Committee -- has a $7,000-per-month contract to assist "in developing business with certain California governmental agencies."

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