Service providers flourish

From modest beginnings, a handful of Philadelphia-area companies grew rapidly in the 1980s and 1990s to become the nation's top mass-market service sellers. The region gave birth to dominant players in credit cards and mutual funds, prescription drugs and cable television, cafeterias and financial software.

This collection of service companies spreads across the region to form a diverse elite that does not much resemble the old power center of Philadelphia-based railroads, manufacturers and banks. Their customers are national and global, not primarily regional, and they do not often act as a single group with common goals, though Mayor-elect Michael Nutter and others are trying to get them to work more closely.

If metro Philadelphia has grown more slowly than the world financial and communications center of New York or the government-fueled defense and technology industries surrounding Washington, its service companies have kept the region prosperous while other manufacturing centers such as Pittsburgh and Detroit have stagnated.

Some of the biggest local players clearly have roots in the region's industrial past. Less clear is which of today's big firms contain the seeds for growth in the next generation.

Among the service companies with national reach and local roots:

The Vanguard Group Inc., the largest mutual fund complex, started as an arm of a Philadelphia investment firm in 1973. Founder John Bogle, now retired, won free publicity for his fledgling firm with his folksy, frugal approach to retailing stock and bond funds. His successor, John Brennan, has expanded and diversified the company's product list. Vanguard employs nearly 9,000 people in offices along U.S. 202 near Malvern, making it the largest employer in wealthy Chester County.

Comcast Corp., the largest cable television company, grew out of a 1960s-era investment portfolio assembled by Wharton School graduate Ralph Roberts, a New Yorker who married into a Philadelphia business family. Deal-maker Roberts more than held his own in tough negotiations with media powers in New York and Los Angeles, regulators in Washington, and merger targets and governments in hundreds of local markets. His son and successor, Brian, has made Comcast a power in telephone and Internet service.

Its glass-walled office tower is Philadelphia's tallest building, topping rival Verizon Communications Inc.'s red high-rise next door.

SunGard Data Systems Inc., the largest financial software company, grew out of Philadelphia oil giant Sunoco Inc.'s data-protection unit.

A 20-year acquisition spree made Wayne-based SunGard the transaction-servicer of choice to the world's investment markets; the company went private in 2005 and is now owned by some of the nation's biggest equity funds. While Philadelphia remains under-represented in computer-based industries, the region is also home to big U.S. operations of German tech giants SAP AG and Siemens AG, and remains the headquarters for Unisys Corp., a pioneer computer-maker who became a specialty-software servicer.

Aramark Corp., the largest food-service company, has gone public twice and private three times since chairman Joseph Neubauer took over in 1979, making him a hero to deal-loving Wall Street investment bankers. The Center City company employs more than 300,000 at cafeterias, stadiums and other venues around the world.

AmerisourceBergen Corp., the largest drug distributor, posted $64 billion in sales last year, making it the top Philadelphia-area company on the Fortune 500 list (No. 29). Descended from a Kensington chemical company, Chesterbrook-based AmerisourceBergen packages other companies' drugs for its pharmacy clients, reflecting the region's role as a pharmaceutical development, manufacturing and distribution hub for multinational giants such as Merck & Co. Inc., GlaxoSmithKline P.L.C., Wyeth and AstraZeneca P.L.C., each of which employs thousands of skilled local workers.

MBNA Corp. was the largest independent issuer of credit cards when it was taken over by Bank of America Corp., the largest bank in the United States, in 2005. Now BofA's Wilmington-based credit card unit is the world's largest, closely followed by JPMorgan Chase & Co.'s card arm, also based in Wilmington. Delaware attracted banks from around the United States when a bipartisan coalition backed by DuPont Co. executives and other business leaders persuaded legislators to pass bank-friendly tax and consumer laws in the early 1980s, and cards now employ more Delawareans than chemicals.