Why Technology calls the Midwest Home
Location, Location, Location — as in real estate, so it is with tech companies.
And, increasingly, technology companies are moving to the Omaha, Nebraska, region when they consider the best location for their business. Omaha, the state’s largest metropolitan area, and Lincoln, the state’s capital, are attracting more and more technology and internet / web solutions companies.
This new corridor of internet-savvy businesses extends East-West from Lincoln and Omaha, across the Missouri River, to Council Bluffs, Iowa, and even on to Des Moines, Iowa; North-South it goes down into Kansas (Hello, Google Fiber) and into Missouri, as well — with Omaha serving as a “central hub” for the tech region.
There’s even a name for this growing technology sector: Silicon Prairie.
The Silicon Prairie
“Right, right,” you say, “I’ve heard about this. Sure. It sounds like a nice little place for some small developer to have a tiny office, or a couple of guys doing website design work. But it wouldn’t work for a big company.” And … you’d be wrong.
Omaha is a great place for start-ups, but it’s not just “the little guys” who are seeing gold in those amber fields of grain. The big guys are here, too. And in increasing numbers.
Names like Google, PayPal, Amazon, Microsoft, and Facebook. Other fast-growing Internet companies that have headquartered in Omaha include GiftCertificates.com, Hayneedle, Bloom, several venture capital groups, and a field of others.
And you can’t talk about business in Nebraska without mentioning our own “Oracle of Omaha,” Warren Buffett, and his Berkshire Hathaway group. Buffett’s annual Berkshire Hathaway shareholders meeting brings more investors and millionaires to Omaha on a per-capita basis than just about any other meeting in the world. Nearly 30,000 investors visit Omaha each year to attend what is often called “Woodstock for Capitalists.”
Omaha is the technology sweet spot.
If you’re not from Nebraska, I’m sure your immediate thought is, “Why?”
‘Under the Radar’
Nebraskans have had hard work honed into them for generations. Farmers, ranchers, cattlemen, and businessmen — Nebraskans are taught to get up at the crack of dawn and work long after dusk. That sense of dedication and pride in one’s work has carried through shifts in the times and technology; couple that with an increase in the number of people attaining degrees and post-secondary education, and you have a natural workforce with strong technical skills backed by a solid work ethic.
The state is also extremely hard to beat when considering utilities for a major datacenter or large company headquarters. We have a high level of power reliability and some of the lowest utility costs in the nation. Electricity rates are way below the national average in price, but way above the national average for reliability and stability.
The Wall Street Journal points out that Omaha isn’t “… quite as saturated with competition like New York City or Silicon Valley. That makes new businesses strong magnets for talent who are looking for fresh opportunities.”
While other areas rise and fall with booms and busts, Omaha marches along at an even and steady pace. In an article for Fast Company titled “Why you should start a company in Omaha,” investor Mark Hasebroock sums up his reasons for the city’s technological growth.
“Omaha has got a really exciting young dynamic culture that’s starting to embrace starting their own businesses. It’s a laid back lifestyle. It’s really easy to live here. The cost of living is super low. We don’t have great big booms. We don’t have many busts. It just kind of floats along under the radar.”
Back to location...
Located in the Central Time Zone, Omaha is strategically positioned within the continent to do business during the middle of the work day. The east coast is only +1 hour, and the west coast is only two hours behind: it’s called “Central” for a reason.
When considering setting up shop in Silicon Prairie versus Silicon Valley, real estate prices can’t be beat in the Midwest. CNBC reports prices range from $7 to $10 per square foot in Omaha, to $25 to $40 per square foot in the San Francisco area.
But for technology and Internet-based companies, one of the most important lures to Omaha is indirectly tied to Offutt Air Force Base. Offutt’s aviation history may have begun 1918, but the locating of US Strategic Air Command (SAC) in Omaha in March of 1946 brings one incredibly important feature to the area: Connectivity.
For more than 40 years, SAC has served as a center for communications for the United States military. That’s why some of the strongest telecommunication lines were laid in the area to connect SAC to Washington D.C. and cities beyond. That history has served the area well, and as technology and Internet connectivity have expanded, SAC has helped to bring some of the strongest and best Internet connectivity to the area. Omaha quite literally sits on a confluence of some of the most important Internet backbone pipes in the world.
Having some of the fastest ping rates in the country makes housing your data here lucrative and cost-efficient. It’s attracted tech giants and newly formed start-ups in equal measures.
Technology Oasis on the Prairie
Consider: The secretive “Project Oasis” was recently revealed to be a massive $200 million datacenter for Traveler’s Insurance that will be built in the Omaha area. To put that in perspective, check out the profile Ars Technica wrote up on the new high-tech datacenter General Motors just constructed in Michigan for $150 million.
There’s no question about it, Omaha and the Silicon Prairie are subtly growing by leaps and bounds in the technology sector. The question shouldn’t be, “Why are tech companies betting on Omaha”; maybe the question you need to ask is, “Why aren’t you?”
These are some of the best reasons we are here. It’s no accident that Managed.com has its main offices in Omaha. The city is extremely welcoming, and your data is welcome here, too.
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Berkshire Hathaway is a registered trademark of Berkshire Hathaway, Inc. [BRKA].
Amazon is owned by Amazon.com, Inc. [AMZN].
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Travelers Insurance is owned by The Travelers Companies [TRV].
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General Motors and the GM logo are owned by The General Motors Company [GM].