The new year 2011 is expected to bring a local economy that is marginally better than last year, most economists predict. But what they have not been talking about is that it should be a very good year for particular industries and companies – some you may expect and others may be a bit more surprising. Here, the Business Journal profiles three companies expecting to do well this year. Siamak Farah is a man with his head in a cloud. As chief executive of InfoStreet, a Tarzana information technology provider, Farah is a booster of cloud computing, the concept of a business having no servers on site but instead accessing e-mail, sales and customer relation software and other applications through the Internet. InfoStreet has provided this type of computer outsourcing for a decade but now that the concept has caught on, the company is expected to do “phenomenally” well in 2011, according to Farah. New hires were brought on in 2010 and the new year is expected to bring more, perhaps as much as a 25 percent addition. All this is to meet what will be a cloud explosion. “Everyone will feel lacking if they are not in the cloud,” Farah said. A combination of educating clients about the benefits of accessing business functions via online and people becoming more comfortable with doing daily activities (banking, shopping) online works in InfoStreet’s favor. That cell phones operate on a similar system of shared tenancy yet remain secure shows that there is little danger when using applications stored online. With cloud computing now in the mainstream, the firm has to update what if offers to its small and medium-sized clients. This realignment recognizes that cloud computing cannot just be presented as an IT solution, Farah said. Clients, however, continue to be cautious about entering the cloud. Working in InfoStreet’s favor is the experience and longevity that clients look for. And the more cloud computing gets discussed, the easier it is to understand. The evolution of software is not too different from the evolutions of other necessities to conduct business. There was no reason to use an individual electric motor when there was an entire power grid to tap into and that is much the same with cloud computing in Farah’s eyes. “Why not just turn on the tap, which is the Internet, and get the same service?” Farah asked. Power-One Inc. For decades, Power-One Inc. made a name for itself through its design and manufacturing of converters and power supplies used in transportation, industrial and military applications. But it is with its inverters used in solar panels that is now the biggest revenue generator for this Camarillo company. An inverter is a device that converts direct current into alternating current. For the third quarter of 2010, the most recent figures available, Power-One brought in 73 percent of its overall revenue through its renewable energy sales. In the same period in 2009, renewable energy had brought in only $31 million, or less than half of what the power products division brought in. In August, IMS Research put Power-One in the second position with 11 percent of the worldwide inverter market. That is quite a feat considering that the company only entered the commercial market in 2007. The company came out of nowhere, said Bill Ong, an analyst with Merriman, Curhan, Ford & Co. Starting in Europe, where adoption of photovoltaic installations came earlier than in the U.S., Power-One began to get its inverters used in solar projects. In 2008, for instance, Aurora PVI-Central inverters were chosen for use in a solar installation in Spain that is the second largest in the world. In the near term, Power-One will continue to do well, especially as the U.S., Canadian and Chinese markets grow, Ong said. So how was the company able to make the leap into renewable energy so quickly? “If you look at their history for 30 years they have been in power supply,” Ong said. “They leveraged that knowledge into inverters.” The company has taken steps to meet the demand for its inverters. In September, the company opened a new manufacturing facility in Canada to make power inverters for that country’s residential, commercial and utility-grade markets. The next month a new facility was opened in Arizona with an annual inverter capacity of 1 GW (gigawatt) by mid 2011. These two new facilities plus the expansion of a European manufacturing plant will result in global capacity to annually produce more than 4 GW of inverters by year-end 2010. Illi Commercial Real Estate Working in the niche of high traffic areas and strip malls has been good business for illi Commercial Real Estate. The Encino-based firm started just three years ago by Todd Nathanson has proven itself resilient during the recession. There was a 15 percent increase in business in 2010 from the year before and 2011 is expected to be just as good. December, for example, tends to be a slow month in ritual but was active due to the stock market rallying and a jump in overall confidence by both retailers and consumers, Nathanson said. A big part in illi’s success has been in the type of properties it markets for landlords. These are the storefronts at major intersections and freestanding buildings that will bring a premium in rent. “There will always be a taker before it even hits the market,” Nathanson said. A focus on what Nathanson termed bread-and-butter service oriented tenants has also been a plus for illi. These are businesses such as banks, hair and nail salons, grocery stores and restaurants. With the poor economy opening the door for these businesses to reposition themselves, illi can use its expertise and relationships with landlords and brokers to help. Illi offers both leasing and property management services. In getting vacant space filled, the firm’s brokers follow a strategy of getting to know the demographics of the area and tracking lease expirations to be able to bring in seasoned retailers with existing customer bases. The firm represents properties throughout the Los Angeles region and works with both national and regional chains to fill vacancies. Recently completed deals include a Chipotle in Sherman Oaks, and upscale stationery store Paper Source taking space in Studio City. The retail market in Los Angeles is a good indicator of the national market. “I think the sophistication level of the tenant is higher than in most markets,” Nathanson said. “I think the money they spend in their expansions is a reflection of the overall market.”
Up in the Clouds
