Cloud Technology Nourishes Washington State ICT Sector
Washington state generates an estimated $25 billion in information and communication technology revenue annually from more than 3,000 software and mobile technology companies and 300 digital game companies, which employ more than 267,500 workers.
Northern California's Silicon Valley may get the hype, but with its low cost of living, high quality of life, affordable clean energy sources and lack of an individual state and corporate income tax, Washington state is quickly becoming an information and communications technology epicenter.
Washington state generates an estimated $25 billion in ICT revenue annually from more than 3,000 software and mobile technology companies and 300 digital game companies, which employ more than 267,500 workers.
"We have a thriving ecosystem here," says Susan Sigl, CEO of the Washington Technology Industry Association (WTIA). "Numerous studies consistently cite Washington as one of the leading technology centers in the United States."
The gaming software industry has a major impact in the state. The Electronic Software Association says Washington has the nation's third-largest number of video game personnel, with 11,225 direct and indirect employees.
The Tech America Foundation, in its Cyberstate 2013 report, ranks Washington No. 1 among states for the largest tech cluster in software publishing and also ranks it high in computer systems design and related services.
Embrace the Cloud
Once considered a hidden gem in the high-tech world, Washington state has positioned itself at the forefront of emerging technology such as cloud computing, mobile application development and social media. Washington-based revolutionaries Amazon.com and Microsoft both placed big bets on the cloud and not surprisingly, have become leaders in the field.
Launched in 2006, Amazon Web Services (AWS), a subsidiary of Amazon.com, has grown to offer more than 30 different services to thousands of customers in more than 190 countries. Notable clients include reddit.com, Active.com, Ericsson, Netflix and Pinterest, not to mention the U.S. government. The cloud pioneer experienced rapid growth particularly with the launch of Amazon Elastic Compute Cloud in 2009.
"That was a huge shift for us," says Mark Ryland, senior manager, global public sector at AWS. "Customers could essentially run their own virtual machine with EC2."
Microsoft's Windows Azure includes Media, Mobile and Cloud Services, as well as Virtual Machines, Websites and Big Data. Companies ranging from NBC Sports Group to about half of Fortune 500 companies use Windows Azure. Mobile apps - a key ICT market in Washington - can store data and reach millions of users via the Azure cloud without the expense of a large technology infrastructure.
The state's prowess in e-commerce and cloud services meets at the intersection of companies such as Avalara. The Bainbridge-based company develops cloud-based solutions that manage sales tax reporting, collection and remittance across multiple jurisdictions for 25,000 sites and other customers. The company projects it will deliver more than two billion tax calculation transactions in more than 85 countries and file and remit more than $10 billion in sales, use and other tax collections in 2013.
Now that Congress is taking action that could compel online retailers to collect state sales taxes, the company, founded in 2004, could see even more growth. JMP Securities named Avalara to its Hot 100: Best Privately Held Software Companies list in 2013.
Seattle-based Revenue Management Systems develops sophisticated software that lets airlines track and analyze their revenue. The company's forecast and optimization technology is used by dozens of air carriers around the world. Its signature airRM solution is used by more than 30 airlines including Westjet in Canada, AirAsia in Malaysia and Ryanair in Ireland.
An App a Day
That Washington leads in mobile application development ties with its telecommunications history. Globally known companies such as T-Mobile, HTC America and Clearwire have headquarters in Washington and anchor the thriving wireless sector.
"Washington is grounded in mobile expertise," Sigl says. "We have a strong foundation in mobile tech and because of that, will continue to generate new companies like Glympse and BYNDL that are the current evolution of mobile innovation."
Around these anchors, companies large and small develop everything from iPhone apps to more expansive products. Founded by former members of Microsoft, Seattle-based Glympse allows users to share their location via GPS or Google Maps. For the chronically late or the new teenage driver, Glympse serves as a real-time answer to the question of "Where are you?"
Glympse thrives from a diverse labor force that ranges from recent college graduates to highly experienced workers. While quality tech talent is always hustling to catch up to a rapidly expanding ICT sector, efforts to meet the demand can be found throughout Washington. From K-12 to the college level, efforts from organizations such as the WTIA and the tech education-focused The Technology Access Foundation promote skills development that meet the needs of the state's tech companies.
"Washington offers highly competitive wages for tech talent," Sigl says. "Of course we want these juicy jobs to go to people that live and are educated here."
The Tech America Cyberstates 2013 report found tech workers in Washington state earned an average annual wage of $110,200, third-highest in the nation.
AWS' training and certification program adds another skill level.
"This is a great way for the local tech community to demonstrate that they've achieved a certain level of mastery with cloud and cloud computing," says Steve Halliwell, AWS' global director of education and state/local government.
With numbers on the rise for both employers and employees, Washington state's ICT future looks bright.
"The environment is strong and getting stronger," Trussel says. "We have important "˜anchor tenants' such as Amazon and Microsoft, and a nice network on both the investment and creative sides, plus we're only an hour and a half flight from Silicon Valley, all of which are important for doing business."