ALABAMA S INFORMATION TECHNOLOGY INDUSTRY OVERVIEW HIGHLIGHTS MEDIAN IT HOURLY WAGES
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1 ALABAMA S INFORMATION OVERVIEW Alabama is an emerging hub for the information technology industry. Access to talent, partnerships with higher education, low costs of living and doing business create a rich ecosystem for the industry. Alabama is home to numerous nationally known companies with major IT operations. Robust defense, finance/insurance and healthcare industries were the genesis of many of these companies. Across Alabama, IT exists not only as a support system but as a major stand alone sector of the state s economy. Employing approximately 15,000, Alabama s IT companies generate over $1 billion in annual revenue and serve such distinct industries as banking and finance, government, education, consumer products, GIS, and utilities automation. HIGHLIGHTS Alabama offers several regions for IT talent and industry, including the metro areas of Auburn-Opelika, Birmingham, Huntsville, Mobile, Montgomery, and Tuscaloosa. Throughout Alabama are concentrations of large and small, new and well-established companies offering software development and computer system design services among other IT products and services. Huntsville was ranked 14th on the 2013 Entrepreneur Magazine s 25 Best U.S. Cities for Tech Startups. Huntsville was named "STEM capital of the South" for 2014 by financial site SmartAsset.com. Huntsville MSA was ranked 9th on the 2011/2012 FDI Magazine Top Cities of the Future. (April 2011) MEDIAN IT HOURLY WAGES SOC Description AL SE US Computer and Information Systems Managers $52.35 $55.80 $ Computer Systems Analysts $37.39 $38.12 $ Computer Programmers $35.79 $33.58 $ Software Developers, Applications $40.35 $41.76 $ Software Developers, Systems Software $45.02 $47.08 $ Database Administrators $31.71 $37.24 $ Network and Computer Systems Administrators $31.58 $34.83 $ Computer User Support Specialists $19.72 $21.12 $ Computer Network Support Specialists $24.45 $26.38 $28.42 Innovation Depot in Birmingham was the only Southeast business incubator singled out in CNN Money's "seven hot startup incubators". (Oct 2011) Opelika owns and operates a 100% fiber network in Alabama offering services to both residential and commercial customers. Southeast U.S. includes AL/AR/FL/GA/KY/LA/MS/NC/SC/TN/VA. Source: EMSI 2013 / / 1
2 TALENT PRODUCER GREAT UNIVERSITIES AND COLLEGES Alabama s higher education system offers new and expanding companies access to excellent workforce training, state-of-the-art technology and innovation at the state s leading engineering, and research schools. The Alabama higher education system consists of 31 four-year colleges and universities and 26 two-year community and technical colleges and junior colleges. Source: Alabama Commission on Higher Educa on Computer Science (CIP 11) & Management Informa on Sciences (CIP ) / / 2
3 OUR ENTREPRENEURIAL ECOSYSTEM Business Incubators in Alabama A Robust Ecosystem for Entrepreneurs A network of 20+ incubators, seven research universities and two research institutions are building and mentoring a pipeline of innovative startup companies founded by Alabama entrepreneurs, which is creating jobs and preparing the state for the "new" economy. Alabama Launchpad (ALP) is the public-private partnership platform to ignite high-growth entrepreneurship, innovation and commercialization for Alabama. ALP is the lead organization of the state s innovation and entrepreneurial efforts. A network of investors, business plan competitions, mentoring groups and industry associations, online communities, meetups and educational programs are growing and changing to meet the needs of entrepreneurs. / / 3
4 NEW AND EXPANDING Company County Description 2014 Jobs Created Investment (Millions) Temenos USA Birmingham Software for the financial industry 25 $3.0 (Expansion) DISA (Defense Information Systems Agency, US Dept. of Defense) Montgomery Standardized hosting, cloud and storage services to the Department of Defense NA $17.5 (Expansion Curse, Inc. Madison Web-based gaming and gaming information 50 NA (Expansion) Rural Sourcing, Inc. Mobile Software development 100 $0.7 (New) Computer Technology Solutions Mobile IT consulting, software development, application integration 15 NA( Expansion) PCI Gaming Montgomery Digital printing 1 $0.25 (New) 2013 Everis USA Jefferson Computer facilities management services 30 $0.4 (Expansion) DISA (Defense Information Systems Agency, US Dept. of Defense) Montgomery Standardized hosting, cloud and storage services to the Department of Defense NA $19.8 (Expansion) Hancock Bank Montgomery Data hosting and related services 100 NA Curse, Inc. Madison Web-based gaming and gaming information 22 $0.8 (New) E-Data Solutions Jefferson Systems analysts, information technology, and custom software 3 NA Momentum Telecom Jefferson Personalized cloud PBX solutions 60 $0.75 (Expansion) MotionMobs Jefferson Mobile application and interactive services 5 $0.61 (Expansion) Infomedia Jefferson Custom online media solutions 3 NA (Expansion) nlogic Jefferson Custom computer programming services 26 NA (Expansion) Digium, Inc. Shelby Open source VolP technology 10 $2.0 (Expansion) Hospicelink, Network Medical, Inc. Jefferson On-line DME management solutions 13 (Expansion) Brockwell Technologies, Inc. Madison Custom computer programming services 7 NA (Expansion) Alabama s New Cyber Research Consortium The Alabama Cyber Research Consortium (ALCRC) is a partnership of the seven PhD-granting Universities in Alabama along with additional industrial and research affiliates. Formed in early 2013, after years of informal and formal collaborations, the ALCRC is the culmination of individual and collective commitments to research, advanced development, education, and outreach in all areas of the cyber domain. The ALCRC is an active group of scientists, engineers, and affiliates committed to creating solutions with practical impact on the state, local, regional, and national economy, and to helping consumers, corporations, and the public sector solve real problems and avoid significant harm involving cybercrime and related national security issues. / / 4
5 THRIVING BUSINESS CLIMATE Alabama is at the heart of the fastest growing and most populous region of the United States the Southeast. Low Tax Burden Capital Investment Tax Credit - Income tax credit of up to five percent annually for twenty years of initial capital costs of qualifying projects to new and expanding companies. Property Tax Abatements - Abatement of up to 10 years from property taxes levied for non-educational purposes. Sales and Use Tax Abatements Taxes on construction-related transactions and pollution control devices are exempt from sales and use taxes. Mortgage and recording taxes can be abated. AL Data Processing Center Economic Incentive Act of 2012 Creation of 20 new jobs paying at least $40,000: The threshold to qualify for incentive is a minimum of 20 new jobs. Average annual total compensation for these new jobs must be at least $40,000 (including benefits). Capital costs: Once job requirements are met, abatements vary depending on the level of capital investment. Abatements Meeting job requirements and spending less than $200 million in capital costs: Abatement of all state sales and use taxes, and local sales and use taxes (not earmarked for education) for construction material. Abatement for maximum of 10 years for all state sales and use taxes, and all local sales and use taxes (not earmarked for education) for most capitalized materials acquired after completion ( refresh costs). Abatement for maximum of 10 years of all state and local property taxes (not earmarked for education) for materials acquired to build the data center and capitalized refreshed cost materials acquired for post-construction activities. Spending more than $200 million in capital costs: Abatement extended from 10 to 20 years if aggregate capital investment is more than $200 million during the 10 years from the date construction begins. Abatement extended to 30 years if aggregate capital investment is more than $400 million during the 20 years from the date construction begins. Capital Tax Credits: A data center fulfilling the job requirements with no less than $2 million in capital investment can receive an annual Alabama income tax credit of up to 5 percent of the capital costs of the project for a period of 20 years after the project is completed. ACCRA Cost of Living 2014 City 100% Composite Index Memphis, TN 85.6 Birmingham, AL 91.5 Nashville, TN 90.2 Mobile, AL 92.6 Dayton, OH 92.5 Huntsville, AL 94.4 Raleigh, NC 93.3 Jacksonville, FL 98.3 Columbia, SC 95.2 Montgomery, AL 94.7 Source: ACCRA COL, 2014 Alabama offers affordable housing, taxes, utility costs and an overall cost of living among the most competitive in the nation. The cost of housing in Alabama is quite low, with median sale prices for homes some 44 percent less than the national median price. Source: Alabama Center for Real Estate, Alabama Housing Affordability Index, 1st Qtr 2014 Notes: Alabama: Actual rate is 6.5%. Because Alabama allows for the deduction of federal income tax (one of the only states in the United States to do so), the net effective rate is 4.5% / / 5
6 COMPANY HIGHLIGHTS Alabama s Top Technology Employers Rank Company Employees Sales (Mil) 1 EBSCO Industries Inc. 5,762 $2, Intergraph Corporation 4,000 $ Cobalt Holding Company 3,450 $ Avocent Corporation 1,971 $ Integrated Medical Systems Inc. 650 $ Camber Corporation 597 $ Radiance Technologies 421 $ Sungard Business Systems 400 $ Madison Research Corporation 400 $ The SSI Group 385 $23.70 BBVA Compass Investing Millions on its Infrastructure One of the biggest financial industry computer upgrades in the world is happening right now at BBVA Compass in Birmingham. The centric project is a state-of-the-art technology upgrade to the BBVA Compass platform. More than 650 people have put in more than 2 million hours on a project representing an investment of some $400 million. Additionally, companies such as Accenture, Hildebrando, and Indra have located/expanded in Alabama due to this project. The three phases of the project include an upgrade to BBVA Compass commercial lending platform and the automation of its branch platform. The largest of the three phases is the upgrade to a new core banking system, which will: 1. streamline deposit account origination and maintenance for more efficient customer service; 2. provide a single-customer database for consistent customer information across applications; 3. reduce the paperwork needed for standard processes. Cummings Research Park Home to the 2nd largest research park in the U.S. Rural Sourcing Inc. Software Development $700,000 investment/100 jobs The Atlanta-based firm opened a new software development center in downtown Mobile. CPSI, located in Mobile, Al, is one of leading provider of electronic health record (EHR) systems to the healthcare industry. Additionally, the new system will post many transactions throughout the day, or in real time, enhancing customers banking experiences by giving them more timely information about their accounts. The project requires functional architects, designers, developers and programmers, as well as testing and quality control, change control, data warehouse, project management, communications, legal, compliance and change management professionals. Teams work collaboratively with the various lines of business and support units throughout the bank to ensure the new platform addresses their needs and those of their customers. BBVA Compass is committed to Birmingham as our base of operations. Birmingham boasts a strong talent pool of professionals, including those with finance experience. The city provides a favorable environment in which to do business and the quality of life for employees is excellent. We are pleased to live, work and play in Birmingham. - Lee Smith, East Regional Executive Huntsville based Adtran Inc., a leader among U.S. suppliers of high speed internet network switching equipment, is Alabama s largest publicly traded technology company. / / 6
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