Four takeaways from Indy's newsy tech week

May 5, 2017

A lot happened in Indy's tech scene this past week. On Saturday, the Mira Awards shined a spotlight on notable individuals and promising companies, and Gov. Eric Holcomb was among the guests at the sold-out event. On Monday evening, internet giant IAC said it had reached a deal to buy Angie's List, a storied Indianapolis firm widely recognized as a local technology pillar. Then, on Tuesday morning, India-based Infosys, an IT-services and consulting firm, said it planned to add 2,000 jobs by 2021, Indiana's largest tech jobs announcement ever.

Here are a few takeaways for the newsy week, based on numerous conversations with local tech leaders and observers:

Angie's List confronts new kind of uncertainty

Uncertainty has been hovering over Angie's List for much of the past two years.

The period has been marked by the abrupt exit of its longtime CEO, activist investor pressure to sell the company, and a new CEO who set out to reinvigorate a two-decades-old business.

The clouds began to darken last November, when the company effectively announced it was up for sale and, almost immediately, initiated a round of layoffs. When asked to describe the mood inside the company following the job cuts, an Angie's List intern told IBJ: "I think the best word is uncertain."

Many of those clouds dissipated this week. Angie's List and IAC's home services marketplace, HomeAdvisor, are merging later this year to form a new public company, ANGI Homeservices Inc. Its eventual leaders said both brands will operate independently and suggested that they plan to invest in growing both.

It's nearly certain that some layoffs will follow to reduce redundancies. But, as IBJ Editor Greg Andrews notes in an upcoming column this weekend, comments from IAC executives about the deal "underscore that they have zero interest in a slash-and-burn strategy."

What's not so clear is the fate of Angie's List CEO Scott Durchslag, as well as his multi-phase initiative to reignite declining revenue. The company's performance in the long run likely likely influence whether the head honchos decide to keep it independent.

Also to be determined: whether Angie's List will be as big a corporate benefactor going forward as it's been as a locally based business.

Angie's List is widely credited with helping revitalize the city's near-east side with its sprawling, multi-building campus. It's also been a significant force in the local tech community, hiring student and post-graduate fellows who are part of popular tech programs in the city. In addition, it pumps money into sponsorships for tech-related events and has been the first enterprise client for a number of local tech startups.

Tech companies mostly exuberant about Infosys plans ...

Infosys is unlikely to come in and fill all its 2,000 planned jobs by poaching. So, it's going to have to bring in experienced talent from other markets and train unexperienced talent fresh out of school.

And that has some emerging tech companies upbeat.

"Startups and scale-ups don't have huge training departments," said Lessonly CEO Max Yoder. "Those big companies can take recent college graduates, get them up to speed in so many different areas, and they can do so at a scale that Lessonly cannot. And Lessonly can benefit from that when those people decide ... that their tour of duty has ended."

John McDonald, CEO of ClearObject, has for months been vocal about the region's need to lure a large tech enterprise that has a formidable training engine.

He calls it a "puppy mill" that can help expand the overall tech talent pool.

"It's a way to hire 50 to 100 graduates a year and give them their first job that we can use to fuel the tech skills pool."

Infosys officials would not detail the mix of experienced versus inexperienced talent it plans to target. But the company said it has a world-class training mechanism that can convert graduates into technical experts in a matter of months.

"Infosys has a strength of bringing education and learning to create world class talent pools of the future," Infosys President Ravi Kumar S told IBJ.

... but job competition could intensify

As IBJ points out in upcoming Infosys story this weekend, there were about 6,000 tech job postings in Indiana in the first quarter this year—and a bevy of large tech-jobs announcements over the past 12 months.

Tech labor always has been a seller's market, but it might soon become more so.

"The pool is definitely shallower than in larger markets, so it certainly doesn't help," said Jon Gilman, CEO of Zionsville-based Clear Software. "What is unique about Infosys' expansion is that consulting salaries tend to be much higher than typical tech salaries, which means they could potentially lure away talent from Indy's tech firms."

Several tech leaders claim that startups and established companies attract different kinds of job candidates because of differences in culture, nimbleness, and more.

But a rock-star developer is a rock-star developer no matter where he or she works, and startups may have a tougher time competing with tech giants for them.

"Companies that could be the next Interactive Intelligence, the next ExactTarget, it's going to be harder and harder for them to compete on a higher playing field of salary offerings," said Nick Birch, CEO of tech-mentoring company PropelUp.

Not all big job announcements come to pass

It wasn't an earth-shattering news story, but IBJ reported Monday that Indianapolis city officials planned to rescind tax breaks granted to Interactive Intelligence and a partner real estate company for expansion plans announced in the spring of 2014.

Back then, Interactive had 970 employees and said it would add 430 by the end of 2016. When Interactive was purchased by California-based Genesys in December, it only had about 1,000 employees.

Today, Genesys said it has 935 employees in Indianapolis with 40 job openings.

Angie's List is another example of a company that floated lofty hiring plans that didn't pan out. In the fall of 2014, it said it would add 1,000 jobs by 2019 to the roughly 1,900 it had.

Then-CEO Bill Oesterle pulled the plug on that $40 million expansion as a corporate protest of sorts against Indiana's Religious Freedom Restoration Act, which was widely perceived as anti-gay.

Besides Infosys, the biggest tech job announcements in play today include Salesforce's plans to add 800 jobs by 2021 and Mobi Wireless Management's plans to add 521 by 2020.


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