5 reasons why SaaS companies scale in Greater Phoenix
By Thomas Maynard, Director of Business Development
What do JDA Software, GoDaddy and Infusionsoft have in common? They’re all headquartered in Greater Phoenix. As one of the fastest-growing and most dynamic regions in the country, Greater Phoenix is an emerging hub of innovative activity with a robust ecosystem of technology and software as a service (SaaS) companies.
Here are the top five reasons why Greater Phoenix is the perfect location for SaaS companies to scale.
The number one issue for scaling companies tends to be finding quality talent. Tier one markets such as San Francisco, Los Angeles and New York are increasingly seeing the war for talent become more competitive, which forces companies to look elsewhere to scale their operations. This is where Greater Phoenix excels! Arizona State University’s enrollment surpassed 100,000 students for the first time in the fall of 2017, including more than 20,000 students enrolled in the engineering school alone. Along with other higher education institutions including the University of Arizona, Grand Canyon University and University of Phoenix, there is a steady pipeline of qualified students looking for entry-level roles. This is very attractive to scaling SaaS companies who are looking to build out their sales, customer support or software development/product teams.
- Concentration of firms
SaaS is not new in Greater Phoenix. Legacy companies like JDA Software, GoDaddy and Infusionsoft are all headquartered in the Phoenix region and employ hundreds of workers. Homegrown companies like WebPT have scaled successfully and are partly fueled by local venture capitalists who specialize in enterprise B2B SaaS companies. Gregslist, a list compiled by local SaaS guru Greg Head, shows that nearly 300 SaaS companies have an operation in Arizona. When companies are looking to expand, they tend to flock to markets where there is a concentration of other similar firms.
- Welcoming culture
Culture is a very important, but at times overlooked, aspect of a successful corporate relocation. The Phoenix region has a very welcoming culture for “newcomers”, especially in the tech industry. Guided under the banner of #yesphx, the local startup ecosystem is proud to be known as the world’s most generous community for entrepreneurs. New companies are easily integrated into the overall ecosystem and the region/state has a strong “pro-growth” mentality. The Census Bureau ranked Maricopa County as the fastest growing county in 2017, so being new is normal. And, as true meritocracy, you don’t need to be entrenched in the social hierarchy of the region to succeed here.
Connectivity back to the “mother ship” is key for growing companies. Not surprisingly, Arizona is home to dozens of California-based companies that have decided to scale their operations in the Phoenix region (Uber, Gainsight, Yelp and DoubleDutch to name a few).
The CEOs and other senior leadership can jump on a quick flight from either the Bay Area (1 hour, 45 minutes) or Los Angeles (1 hour) to touch base with the Arizona office. Sky Harbor International Airport is the 11th busiest airport in the U.S. and is conveniently located in the center of the region, making travel to California, and other major markets seamless.
Cost will always be taken into consideration for relocations. Venture-backed companies are looking for ways to optimize their costs to reduce their burn rate. Greater Phoenix is a unique market and is much more affordable than traditional tech markets like San Francisco, Los Angeles, Seattle and New York. It also has a much deeper software development talent pool than other emerging tech markets like Salt Lake City or Nashville. Check out our free tool on our website to run the numbers first-hand to see how Greater Phoenix compares to other markets.
It’s an exciting time to be a software company in Greater Phoenix. With a large talent pipeline, welcoming culture and lower operating costs, Greater Phoenix is the place for SaaS companies to thrive.