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Hitting Utah’s Silicon Slopes

Why Technology Companies Love Utah

By Dan Sorensen

Utah is well known for having the Greatest Snow on Earth®. Each year, millions of tourists visit the state in search of the world-renowned powder found across the Wasatch Front during the winter season. Utah’s so-called “Silicon Slopes” are also growing in popularity, as technology companies of all sizes set up shop in the Beehive State.

Slope Alex Nabaum

In recent years, the state’s technology industry has grown exponentially. Tech giants like Adobe, EMC and Twitter, as well as emerging innovators like Workday, have started moving operations to Utah, taking advantage of the state’s skilled workforce and business-friendly practices.
In every way possible, Utah has built an environment where businesses of all types can thrive. Technology leaders who come to Utah quickly realize the environment can help them grow their businesses in ways that are good for investors, employees and the company itself. This symbiotic relationship is beneficial for all parties involved and is likely the reason many of the fastest-growing tech companies keep coming to Utah.

An Entrepreneurial Ecosystem

Over the past decade, Utah has earned a number of national accolades for its business-friendly practices. Forbes magazine and other thought leaders have ranked Utah and its cities as some of the top locations in the country for business and careers. Whether it is an award for tax-friendly policies, cities that are driving the future, or best states to start a business, Utah is a regular contender for top spots on the charts.
While awards don’t necessarily create success, they are telling of environments where businesses can flourish.
“Utah provides an environment that makes it easy to do business here,” says Brad Hatch, communications manager at eBay, which employs 2,000 Utah residents in its Draper facility. “Through tax incentives and lower taxes in general, the state has partnered with high-tech companies to bring them here, and it’s attractive because there is a highly educated workforce and the state and local governments remove a lot of the red tape.”
These types of incentives make it easy to migrate a business to Utah or open an office in the state. The impressive talent found in Utah also makes it easy to find skilled employees.
With schools like University of Utah, Brigham Young University and Utah State University—and their strong computer science programs—Utah’s talent pool of engineers is ever-growing. By working side-by-side with local universities, many of the state’s innovators prepare programmers and developers to enter the workforce by collaborating with students on real-world projects.
“eBay has worked with the U of U to build programs that develop talent to feed right into our business needs,” says Hatch. “BYU also has fantastic technical programs in software development, engineering and leadership through MBA programs that help supply talent to eBay.”

Location, Location, Location!

While Utah may seem like an off-the-beaten-path place to build a business, its location is actually enticing to many technology corporations. Just a 90-minute flight away from the Bay Area, Salt Lake International Airport services more than 600 flights each day to places around the world.
The accessibility to the state, combined with its many amenities, is a huge draw that attracts both businesses and employees.
Fortune magazine profiled one of Utah’s serial entrepreneurs, Josh James, founder and CEO of Domo, and former CEO and co-founder of Omniture describes Utah this way: “Utah is a place people want to live. Everyone knows about our snow and winter sports, but we have four seasons of outdoor recreation. Our arts community is incredibly vibrant—the Utah Symphony, Ballet West, the Sundance Institute, just to name a few.”
In addition to skiing and snowboarding, outdoor enthusiasts can also enjoy a number of Utah’s amenities during the warmer parts of the year, like watersports on Lake Powell, hiking one of the state’s five national parks, ascending one of the hundreds of rock-climbing routes or downhill mountain biking a ski slope in the summer.
Also, Utah’s lower cost of living means it is more affordable for both businesses and employees. Salt Lake City homes cost less than half of what they do in San Francisco and nearly one-third compared to prices in San Jose, Calif. Commercial real estate is also much more affordable in Utah. Managing a large office or campus for hundreds or thousands of employees often leads to millions of dollars of savings over the long term when compared to operating costs outside the state.

High Peaks, Low Overhead

Home prices are not the only thing that is more affordable in Utah. Employee salaries are competitive to national benchmarks when cost of living is factored into an offer. Overall, the lower operating costs can save companies significant overhead when compared to operating an office elsewhere. Companies in Utah’s strategic industry clusters of IT/software, aerospace, and life sciences still provide some of the highest salaries for employees in the state.
“The industry has tons of six-figure jobs and when private companies go public or get sold, there’s often a great upside for employees,” says James, whose previous venture, Omniture, was purchased by Adobe for $1.8 billion. “Most of the 100 individuals who became millionaires through the Omniture experience were employees.”
The lower overhead means technology companies can afford to provide employees with much better amenities and benefits while still saving money when compared to opening offices in other states. These savings allow many Utah technology companies to provide 100 percent healthcare coverage, free or subsidized lunch, public transportation reimbursements, tuition assistance, retirement programs and stock incentives. By reinvesting these savings into their team members, these businesses have found a recipe for long-term success.
The Utah workforce is also known for having a good balance of work and personal life. By building a work-life balance within an organization, many Utah companies find they can improve productivity and employee retention in the long run while also reducing turnover rates.
Utah employees are often viewed as some of the most productive in the country. During the recession, a study found that Utah employees’ productivity increased by 8.3 percent, which was first in the nation, far surpassing the national average of 0.9 percent.
“The workforce here in Utah is a willing workforce that’s ready to dig in and support these large tech companies,” says Josh Coates, CEO of Instructure and founder of Mozy, which was acquired by EMC for $76 million. “Companies, as they are looking to expand, they consider overseas or they look in their own backyard, and they are finding that the reliability, stability and work ethic of people that live in Utah is a great investment to help build out their companies.”
Many businesses that acquire Utah tech companies ultimately decide to double down on their investment and bring additional operations to Utah. Adobe, after acquiring Omniture, moved many of its operations to Utah and recently invested more than $100 million in its new Lehi, Utah campus, where it employs approximately 1,000 workers. After EMC acquired Mozy and its 300 employees, the company decided to increase its Utah-based office by an additional 500 positions.
As more technology companies decide to call Utah home, or move portions of their business to the state, it adds to the growing talent pool of technical employees like engineers and programmers. This ultimately draws more technology companies to the state, as the workforce continually expands and becomes more qualified.
“We have a legacy for strong technology companies in Utah and with every cycle, we get more innovation coming from that,” says Coates. “You can look all the way back to the days of Novell and WordPerfect, and from those companies people spin out and continue to innovate. What we’re finding now is that there are three or four companies on the cusp of going public, which is unprecedented in Utah’s history, so this is compounding the ecosystem in Utah in respect to the tech venture community.”

Meet the Neighbors

Whether they began their journey in Utah, moved here after an acquisition, or simply decided to expand their offices into the state, some of the largest tech companies in the world have a presence in Utah.
Twitter built its first custom data center in the south end of Salt Lake Valley around 2011. The data center was specifically architected for Twitter’s unique power and cooling needs. While details have never been disclosed publically, the data center currently serves customers 140 characters at a time. Oracle also chose Utah to host one of its major data centers. In 2006, the company consolidated its 40 data centers into two major locations, one of which is located in Utah. The state’s low energy costs and centralized location in the Western states are just a few of the drivers that bring companies to build data centers in the region.
In addition to eBay’s offices, the company’s e-commerce subsidiary PayPal also has a Utah presence. PayPal recently architected an energy efficient data center in Utah that is partially powered by special fuel cells that operate on natural gas to generate low-emissions energy.
In 2012, software-as-a-service provider Workday opened its Salt Lake City office, where it employs project managers, engineers and financial specialists to develop its human resources software. The rapidly growing company plans to add hundreds of positions over the next 10 years after receiving tax incentives to help grow its business.
Fusion-io develops flash memory products for data centers and was founded in Utah in 2007. The company’s ioMemory solutions accelerate applications for its customers, which include Apple, Facebook, Salesforce and many others.
The solar energy, home automation and security company Vivint is headquartered in Provo, Utah. The business was recently purchased by Blackstone Group, an investment firm, for approximately $2 billion. The acquisition is one of the largest in Utah’s history.
Even government agencies see the value in Utah’s technology industry. The National Security Agency built a state-of-the-art data center in Bluffdale, Utah. The project will store exabytes of surveillance data. While there has been some debate around the project, it is, without a doubt, one of the largest data centers in the country with a price tag of nearly $2 billion.
Success stories are easy to find in Utah. From startups to Fortune 500 companies, Utah is helping companies of all shapes, sizes and industries grow their business. Even technology companies, which demand a highly educated and exceptional workforce, are finding Utah is the place for growth, profit and success.

 

eBay’s Commuter Friendly Campus

 

Since the opening of its Utah offices 14 years ago, eBay has continued to make significant investments in the Beehive State’s technology industry. The company now employs more than 2,000 Utahns with plans to add more team members in the coming years, largely made possible through the opening of its 40-acre, transit-oriented campus.
The new LEED (Leadership in Energy and Environmental Design) gold certified facility sits in the southern part of vthe Salt Lake Valley with direct access to many thoroughfares and public transportation routes. This creates a workplace that is easy for employees to access, including those who commute from surrounding areas like Ogden and Provo. By building the new campus next to a FrontRunner commuter rail station, employees who live far away can easily commute to the office, allowing eBay to draw on a much larger number of potential employees. To encourage commuters to cut their carbon footprint, eBay provides reimbursement for public transportation costs.
Inside the facility, employees enjoy amenities like a fitness room, a café and communal areas that encourage team members to work together by boosting camaraderie. These types of benefits are becoming more common for Utah tech companies, as businesses are eager to enhance the work life of their employees through unique perks.