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Good News for Ann Arbor Info Tech Businesses

Recently, a copy of the Ann Arbor Business Review got passed along to me. A front-page article, "Information Technology Remains Strong" was suggested to me as a great blog topic to share with our readers. I definitely suggest that you check out this article, which shares that five local IT companies will be adding nearly 1,000 jobs in the next ten years in the Ann Arbor area.

In 2008, five companies have been identified as top market expanders. If you are planning on staying in the Ann Arbor area after graduation or want to do an internship around here, these companies might be a good place to start looking:

ForeSee Results - 275 new jobs
MyBuys - 250 new jobs
Barracuda Networks - 185 new jobs
GDI Infotech - 121 new jobs
ICON Creative Technologies - 63 new jobs
Arbor Networks - 56 new jobs

A total of 950 new jobs!

A few choice quotes...

"The region's biotechnology sector and alternative energy potential have dominated the spotlight in economic development circles, but the IT sector is rapidly expanding, leveraging connections to the University of Michigan and drawing on a pool of talent that they say has been underused. "

"By all accounts, Google's decision nearly three years ago to hire 1,000 workers in a new Ann Arbor operation intensified the national focus on this region's IT strength.

Google co-founder Larry Page's local ties - he's a former U-M student - played an instrumental role in bringing the company here. Google's office on Division Street in downtown Ann Arbor is largely a sales operation, but the Google brand brought national credibility.

Since then, Californian firms like Barracuda and MyBuys have announced plans to expand their companies here. The chief executives of Barracuda and MyBuys are U-M graduates."

Five Ann Arbor IT companies to add nearly 1,000 jobs in 10 years
by Nathan Bomey | Ann Arbor Business Review
Thursday October 09, 2008, 7:00 AM

After a series of expansion announcements this year, Ann Arbor's information technology sector has reasserted its role as the region's top job growth engine.

Five IT companies with existing local offices and one outside firm this year have revealed plans to add nearly 1,000 jobs over the next few years. Together, that would equal almost double the number of employees that Google has today at its AdWords headquarters in Ann Arbor.

"It's probably the strongest of the technology sectors in Ann Arbor, and sometimes we lose sight of that," said Michael Finney, CEO of Ann Arbor SPARK, Washtenaw County's economic development organization.

The region's biotechnology sector and alternative energy potential have dominated the spotlight in economic development circles, but the IT sector is rapidly expanding, leveraging connections to the University of Michigan and drawing on a pool of talent that they say has been underused.

"The environment is really strong," said Larry Freed, CEO of ForeSee Results, which announced plans this summer to add 275 jobs in the next several years. "The challenge in technology on the West Coast is, while there is a great set of resources and talent, there's not the loyalty that you can build here. I think that's an advantage this area has over the West Coast."

Among the region's biggest IT expansions this year:

•Barracuda Networks expects to add 185 employees over the next five years to establish a research-and-development center at 201 Depot St. (See related story, Page 2), where the company will develop IT security solutions.

•ForeSee, which has more than 120 employees in Pittsfield Township, considered out-of-state locations but chose to invest $6.6 million to stay here. The company's online customer satisfaction measurement technology has attracted major corporate clients, including retail and financial companies.

•Redwood City, Calif.-based MyBuys Inc. said the Ann Arbor region's talent pool, cheap housing and quality of life were draws. The company, offers personalized product recommendation software services, is adding 250 workers.

•GDI Infotech, whose IT consultants help companies streamline software and databases, is adding 121 jobs to this area by consolidating existing operations and expanding.

For the most part, the growing IT companies don't compete with each other. Niche software firms, online services companies and consulting organizations are among the sub-sectors of the local IT industry.

Google's influence shows

By all accounts, Google's decision nearly three years ago to hire 1,000 workers in a new Ann Arbor operation intensified the national focus on this region's IT strength.

Google co-founder Larry Page's local ties - he's a former U-M student - played an instrumental role in bringing the company here. Google's office on Division Street in downtown Ann Arbor is largely a sales operation, but the Google brand brought national credibility.

Since then, Californian firms like Barracuda and MyBuys have announced plans to expand their companies here. The chief executives of Barracuda and MyBuys are U-M graduates.

Sean Heiney, director of new product initiatives for Barracuda, said his company realized there was a surplus of U-M graduates looking for jobs in the area - students who often leave for IT jobs in other economies.

"We saw that there is a good amount of talent coming out of the Michigan area while we were sitting in California," Heiney said. "We knew there was a need for great technology jobs because there was a lot of great graduates coming out of the universities that didn't want to leave the state."

Bhushan Kulkarni, CEO of GDI Infotech, said the region offers intangible quality-of-life features.

"Whatever the news and the bad press that's going on, Ann Arbor is still a destination of choice for growing families," he said.

Kulkarni acknowledged that the region sometimes struggles to deliver job opportunities for spouses of talented IT workers considering moving here. It's a similar complaint espoused by local venture capitalists, who say it's difficult to recruit executives concerned about job opportunities after their first one expires.

"We don't have a clear answer for that other than helping to introduce them to our connections," Kulkarni said.

Among the challenges threatening to derail the growth of Ann Arbor's IT sector is the pummeling of the global financial system and the slumping national economy.

But Doug Van Houweling, CEO of Ann Arbor-based not-for-profit Internet2, said he wasn't concerned that the local IT sector would fall prey to the declining economy.

"Most of the companies that are growing in this environment are growing with the help of more conservative financial models, and in the current situation they'll become even more conservative," he said. "I think that things happen a little less rapidly here in the Midwest. But I think they happen in a somewhat more stable fashion."

Contact Nathan Bomey at (734) 302-1725 or nathanb@mbusinessreview.com.

Posted by kkowatch at October 27, 2008 08:59 AM

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