“At the time we got our business license, there was no classification at the county office for computer software. The closest thing we could find was a category for microfilm,” states Louis Castle, co-founder and general manager for Westwood Studios in Las Vegas. The company, which develops and markets computer games, was founded in 1985, a time when the term “high-tech” referred mainly to the defense industry and only a few people recognized the dramatic impact computers were about to have on the country.
Those days are over, and if Somer Hollingsworth, president and CEO of Nevada Development Authority (NDA) in Las Vegas, and Michael Thomas, executive director of Tech Alliance in Reno, have anything to say about it, Nevada will soon become synonymous with the high-tech industry. Both NDA and Tech Alliance are focused on bringing in a variety of high-tech businesses and fostering start-up companies in their respective parts of the state.
Their efforts are starting to pay off. Hollingsworth says that in September of 1999, only a handful of high-tech companies called Las Vegas home. A year later, that number had grown to more than 80. According to Thomas, Washoe County has seen a 24 percent increase in the number of local high-tech companies in the past two years.
Both Hollingsworth and Thomas say that bringing high-tech companies into the state is largely a matter of time, and also of putting efforts into developing the state’s educational system to create an available pool of qualified employees. Nevada’s largest draws are definitely the quality-of-life issues such as real estate costs for both commercial and residential properties, a favorable tax structure, and ease of access to both Silicon Valley and Southern California.
Many high-tech companies are finding the cost of office space prohibitive in Silicon Valley and are worried their relatively young work force is not able to purchase homes within reasonable commuting distances. Spokespeople for both iGo and Intuit Payroll Services, companies that have relocated to Reno within the past two years, say those factors contributed to their decisions to move operations to Northern Nevada.
In addition to attracting existing companies, both NDA and Tech Alliance are paying attention to the needs of high-tech start-ups. Tech Alliance has sponsored funding competitions where local entrepreneurs can present their business plans to a panel and the winner receives a substantial grant to put its plan into action. In addition, Thomas is excited about the Sibayan high-tech accelerator project slated for the South Meadows section of Reno. The project will foster as many as 200 new companies in its complex, providing them with resources in areas such as marketing and research and development. Hollingsworth also states that four venture capitalists have headquarters in Las Vegas and are funding local companies.
Challenges still exist. “Attracting technology is in its infancy here,” Hollingsworth stated, adding that although NDA has had some success bringing in new companies and fostering start-ups, the need of high-tech firms for qualified employees is something that needs to be addressed. “We’re not producing the technologically-skilled people we need locally,” he said. “Southern Nevada is not a hotbed for technology. It can be, and the university is working on that, but you can’t expect a university to produce a lot of technology people overnight.”
Although Thomas also echoes concerns about developing a large pool of qualified workers, most of the companies interviewed for this article stated they have had relatively few problems. Larry King, vice-president and general manager of the Intuit Payroll Systems Group, says it recently received more than 700 applications for 125 job openings, and most of the people applying were very well qualified. Chris Holder, director of marketing for Server Technology, Inc., says his company has had similar experiences and faced few problems as its workforce has doubled since moving to Reno. Holder says he currently has a stack of résumés from people in California who are doing the research and finding out about high-tech job opportunities in Nevada.
Who’s Doing What in Nevada
The high-tech industry is alive and flourishing in Nevada. Companies cover all aspects of the marketplace with computer games, Internet security, payroll services, mobile technology, video technology for the Web, and Internet-based vacation services. Below are several companies that currently call Nevada home.
Data Engines (Reno) – “Spam control” and “encrypted tunnels.” Those are a few of the terms that get thrown about in the hallways at Data Engines. The company provides a secure means for businesses to send confidential information via the Internet. Although the Internet is great for quick communication, it is not always the safest means available, due to hackers and the possibility that confidential records will end up in some Web-based black hole. Recognizing the security risks, Data Engines formed in September 1998 to provide companies with firewalls, encrypted tunnels and other secure channels. The company works with a variety of a la carte options to tailor the final product to the client’s needs.
helloNetwork.com (Las Vegas) – Imagine being able to personally invite 1,000 people to your next party or watch an entire rock concert on your PC. Those are two things that helloNetwork, a video application service provider, can do. The company, founded in 1997, offers six products that utilize Web-based video in some way. Video mail allows companies to send video e-mail to thousands of people while the HelloLive software provides Web-casting of events for companies to put on their Web sites. helloNetwork also gives companies the ability to archive highlights of events on their Web sites. According to Amy Ellins, vice president for public relations, people will stay longer at sites with video clips because it gives them something to watch. Ellins says the most innovative application of its product so far has been a real estate agent who puts videos of her listings on the Web so potential customers can get a tour of the houses even before they call her.
iGo Corporation (Reno) – iGo provides parts and accessories for laptop computers, cell phones, hand-held devices (PDAs) and other mobile electronic devices. Founded in San Jose in 1993, the company went public in October of last year (NYSE: IGOC). By all accounts, its move to Reno in 1997 has been very successful. According to Miya MacKenzie, senior director of marketing, about three-quarters of the company’s employees made the move from California, and iGo has grown considerably since then, acquiring three other companies in the past year and moving into the Mountaingate facility in southwest Reno. One of the keys to iGo’s success has been its relational database of over 6,500 products from more than 350 suppliers. The database allows its salespeople to give comprehensive information to customers and accurately match equipment from different manufacturers to the correct accessories and power sources.
Intuit Payroll Services (Reno) – After dominating the personal finance software market for almost two decades, Intuit decided to use its expertise to start providing services for customers, in addition to do-it-yourself computer programs. The maker of Quicken, Turbo Tax and Quick Books brought its payroll services division to Reno in 1999 when it purchased the locally-owned Computer Resources, Inc. The company now provides payroll services for over half a million small to medium-sized businesses throughout the country, not only issuing paychecks, but taking care of payroll legalities such as filing hirings and firings with the appropriate state agencies and keeping track of deductions and benefits. It has grown from 275 employees to 450 in Reno and another 110 in Fallon.
Server Technology, Inc. (Reno) – With companies spread across the globe, relying on a computer network to keep everyone connected has become a way of life. Unfortunately, so have breakdowns in the network. That’s where Server Technology comes in. The firm develops and manufactures hardware for communication networks to ensure that the network functions properly and to allow companies to service the network from a central location. Founded 16 years ago in the Bay Area, the company started out developing software and evolved into a hardware manufacturer, with its current line of Sentry Remote Power Managers coming into existence about eight years ago. The firm moved to Reno in July 2000, bringing its research and development, manufacturing, marketing and distribution operations to the northern part of the state.
TravelEscape.com (Las Vegas) – With 35 million annual visitors and more hotel rooms than any other city on the planet, Las Vegas is probably the perfect location for starting a tourist-oriented dot-com company. TravelEscape.com provides hotel reservations and travel packages through its connections with 1,600 hotels around the world. Founded in 1993 with $11,000 in capital, the company originally provided reservation services for Las Vegas only, but quickly grew to serving 250 additional destinations. In March of last year, the company was acquired by Expedia, Inc., a division of Microsoft, and now receives more than 8 million visitors a month to its Web site.
Westwood Studios (Las Vegas) – “Our studios are like a cross between a high-tech R&D facility like you’d see at Intel, and an animation studio, like you might see at Disney,” says Louis Castle. In 1985, Castle and co-founder Brett Sperry started developing software for computer games in Castle’s Las Vegas garage. Fifteen years later, the company has developed more than 100 titles including Dune II: The Building of a Dynasty, Comma Red Alert and its flagship product, Command & Conquer, which has sold over 13 million copies worldwide. Castle says between 25 and 45 people work on each game doing the programming, graphics and sound. The company usually works two to four years developing a new product and currently employs about 200 people.
The success of recruiting efforts seems to be one of synergy, a kind of “if you build it, they will come” philosophy coupled with what Thomas calls “Silicon Valley refugees” returning to California with news of a better way of life. While Nevada may never be able to lure Microsoft out of Washington, Hollingsworth says the state can definitely look forward to helping new high-tech companies grow and flourish here