DiamondCluster adds government facets

DiamondCluster International, a management consulting firm that started life in the commercial sector, is now targeting the government market.

The Chicago-based company was founded in 1994 as Diamond Technology Partners and went public in 1997 during the Internet frenzy. The company weathered the dot-com bust and the technology downturn. DiamondCluster has expanded margins in recent quarters and looks set to achieve an annual revenue growth rate of 25 percent.

The company's executives, however, have decided to build a buffer of sorts against future economic upheavals. "We are emphasizing big, new growth opportunities in industries that aren’t as cyclical," said Mel Bergstein, DiamondCluster's chairman and chief executive officer, during a recent analyst conference.

Those industries include utilities, health care and government. The company's first piece of federal business is a project with the Justice Department. Overall, the company’s public-sector business is small -- about 3 percent of the company’s revenue -- but growing. For example, public-sector revenue grew 47 percent in the company’s third quarter, which ended in December, compared with the previous year’s third quarter.

DiamondCluster's long-term goal is to derive one-third to one-half of the company's revenue from less-cyclical industries, said Jay Norman, managing director of DiamondCluster's North American practice, speaking earlier this year during an analyst teleconference.


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