Evolve IP rides the cloud to a third year on the Inc. 5000

When Evolve IP formed in 2007, the cloud was not a familiar technology term. To many, it was the stuff of Joni Mitchell's "ice cream castles in the air."

But tech veterans Thomas Gravina and Michael Peterson sensed the coming industry shift to software and services running on the Internet instead of computers. They and a group of co-founders launched their company with $25 million in capital, since refinanced with $44 million in bank loans.

Potential, indeed.

Expecting to end 2015 with close to $70 million in revenue, Evolve has scored its third inclusion in as many years on Inc. magazine's list of the nation's fastest-growing private companies, with three-year growth of 176 percent. The full Inc. 5000 list - Evolve is No. 2,219 - is in the September issue.

"Validation" is what Gravina calls the Inc. recognition, and the cloud-services competition that Evolve now faces from industry giants such as IBM, Cisco, and Microsoft.

"It makes it easier for us to succeed," Gravina, Evolve's chairman and CEO, said in an interview this week. "We're no longer telling a story that nobody else is talking about."

Evolve has more than 1,300 commercial business accounts and 80,000 users in 15 countries of its services, including virtual data centers/servers and desktops, unified communications (Internet, phone and data), and disaster recovery.

In addition to executive offices in Center City, the company has a national operations center in Wayne, where it recently expanded into 27,000 square feet and plans more in anticipation of adding 60 to 80 employees over the next two years, Gravina said. They will join a current workforce of 185.

"We knew it was an enormous opportunity when we started," said Gravina, 53, of Haverford. "Frankly, we could have grown a lot more, but our goal is to build a pristine brand."

Evolve's evolution has occurred under the stewardship of a management team that has been together since Gravina and Peterson, 45, vice chairman of Evolve and president of its parent company, GPX Enterprises, started ATX Communications in King of Prussia in the late 1980s. About 10 years later, it merged with two publicly traded companies. It was sold in 2006, a year after returning to private ownership.

Evolve was launched in December 2007, according to an article in The Inquirer at the time, touting the company's bundling of Internet, voice and data communications through the Internet as more efficient, cost-effective and secure, as well as faster, than standard technology of the time.

The article made no mention of the cloud.

"The challenge back then was twofold: Nobody knew what the cloud was, and we were headed into a recession," Gravina said.

He credits proper capitalization, an experienced management team, and not taking unnecessary risks - "We didn't build it and expect them to come" - for not only surviving such a daunting environment, but growing at an 80 percent compounded annual rate since that first year.

"Open architecture" has provided the flexibility to create products as customers request and new technology emerges - and as businesses come "to the realization of what the cloud can do for them," Gravina said.

For starters, it eliminates the need to spend capital on hardware, such as servers and computers, and on staffing to maintain it, said Ti Pham, assistant IT director at Singer Equipment Co.

Singer, a food-service distribution and kitchen contract-design company near Morgantown, Berks County, replaced an antiquated phone system with a voice-over-Internet protocol (VoIP) hosted by Evolve. Singer now is also using Evolve's backup data and disaster-recovery services.

Evolve has been Firstrust Bank's telephone provider for about two years, after the 81-year-old family-owned bank replaced its nearly 15-year-old phone system with VoIP, chief operating officer Peggy Leimkuhler said.

"We wanted a technology partner who could bring some of the innovation and nimbleness necessary for our business," Leimkuhler said.

Like most banks, if not all, Firstrust has rejected the cloud for storing customer information.

"The innovation in technology around making access more convenient and/or cheaper through cloud computing can be broken down into so many parts," she said. "Organizations need to know what parts they are comfortable with for their business."

215-854-2466 @dmastrull