Community leaders looking to reinvent Missoula after the collapse of the timber industry may have found the next big thing – a small but growing network of companies rooted in big data and emerging Internet technologies.
Entrepreneurs behind Missoula’s network of high-tech startups, supported by backers of a new program at the University of Montana and investors looking to sponsor the future, see potential in Missoula as a technology hub of the Northern Rockies.
On a quiet weekday afternoon, employees at TerraEchos sat before their monitors, working to predict cyber-security attacks using proprietary software. Across town, employees at GCS Research kept busy developing next-generation Geographic Information Systems and remote-sensing applications.
Both companies have grown since they were founded in Missoula, and both firms look to expand in the years ahead. But their plans for future growth may hinge upon cultivating a local pool of talented workers educated on the cutting edge of mathematics, computer science and information systems.
“It’s very hard to find people who have the talents we need,” said Whitney Hepp, director of marketing and operations at TerraEchos. “Supporting the university is like creating a pool within our community to attract these students, keep them here and grow this technology center right in Missoula.”
TerraEchos is one of Missoula’s fastest growing tech firms. It processes, correlates and analyzes moving data in real time, and it acts upon that data in the moment. Hepp calls it the “speed of now” and says the need to read large amounts of data, as it passes, is in high demand.
The company moved to its new downtown location on Spruce Street in January and now employs 11 workers. Nine of Terra’s 11 employees are UM graduates, or have ties to the school.
“We had a three- to five-year plan to double our staff every year,” said Misti James, Terra’s chief operating officer. “We hit that target this year, going from five to 11. We plan on going from 11 to 20 next year, and 20 to 40 after that.”
Alex Philp, founder and president of GCS Research, recognized the shortage of skilled workers early on. He urged UM to launch a course on IBM’s InfoSphere Streams software and has been a staunch advocate for growing the program ever since.
Last fall and with funding in place, UM became the first university in the world to offer the IBM course at the undergraduate level. In doing so, it garnered national attention from tech bloggers and data watchdogs. It also laid the groundwork for what supporters see as Missoula’s future as a tech center.
“It’s putting Missoula on an international map as a world leader in information technology,” said Philp. “If we don’t stay ahead, other universities and other communities will catch up. We need to give these resources to students. They’re hungry for this kind of stuff.”
UM expanded the Streams course this spring and opened the class to new disciplines. Three departments are now looking to join forces in launching a new Big Data Program at the university, with some pushing for a full degree program.
Eric Tangedahl, director of information systems technology in the School of Business Administration, is co-teaching the Streams program this semester with Brian Steele, an associate professor of mathematics. The programs are working with other departments at UM to expand the university’s big-data offerings, and they may gear additional courses toward the subject.
“It’s not one person solving these problems – it’s a skill set coming together,” said Tangedahl. “Everyone is saying this is a big area. They tend to say there won’t be enough people to fill these jobs.”
A survey conducted by the Harvard Business Review echoed those concerns. Nearly three out of every four tech firms surveyed planned to hire in the field, but reported that finding qualified employees was “challenging” to “very difficult.”
In its own report, the U.S. Bureau of Labor Statistics now predicts a 24 percent increase over the next eight years in the demand for professionals with data analytics skills. The Harvard survey also found that 85 percent of Fortune 500 companies, and federal tech and business leaders, had funded big-data initiatives on the horizon.
“That’s not surprising given the massive amount of buzz big data has garnered,” wrote Christy Maver, an IBM big-data product marketing manager. “What keeps these leaders up at night is how they’re going to staff these initiatives.”
Maver went on to say that big data was not a fad – it’s not a tech bubble waiting to burst. The big-data world is “the world in which we live now, in which businesses operate.” Developing the talent to fill future jobs may be the biggest challenge facing the industry.
While Missoula entrepreneurs say that while finding workers creates challenges for tech firms looking to grow, it also has created an opportunity local leaders are looking to capitalize on.
The Missoula Economic Partnership recently launched its new Big Data Alliance, and Clyde Neu, chief financial officer of TerraEchos, believes the community – with UM growing its curriculum to meet the needs – is one step ahead of competitors.
Neu, who served as MBA director at UM, refers to Bend, Ore., when promoting Missoula’s potential as a tech hub. Bend recently was featured in Entrepreneur magazine as the next big city for new startups – one that recovered from the crash of the timber industry, its former bread and butter.
The article promoted Bend’s potential by naming its size, diversity and its network of successful entrepreneurs willing to mentor new startups. It lauded the city’s schools, recreation and proximity to large metro areas – namely its nonstop flights to Denver, Seattle and San Francisco – as selling points.
When Neu looks at Missoula, he sees Bend’s sister city: same size, same past and same amenities. But there’s one component missing from Bend that Missoula has, that being the educational infrastructure needed to train employees.
“I looked at Missoula and realized we have that piece that’s missing in Bend,” said Neu. “We have successful startups here that have grown, been acquired or gone public. Now we need to seize the opportunity of having a university in our community.”
In his office last week, Neu spoke of venture capitalists and a growing interest among investors looking for promising new startups located in the Rocky Mountain region, including Missoula.
His own company received startup funding from Flywheel Ventures based in New Mexico. The investors also are backing Submittable, a Missoula firm that became the first tech company in Montana invited to Y Combinator, a Silicon Valley-based incubator program that helps emerging entrepreneurs fast track the development of their business.
“These are the kind of business that scale very quickly,” Neu said. “If they take root, they’ll be hiring people. Their growth is somewhat global – there’s no limitations. They leverage the Internet as they expand.
“That’s what excites me about the Missoula area. We also have an awful lot of small, high-tech information firms bubbling underneath the surface here, and some are rising to the top and attracting substantial funding.”
Leonid Kalachev, chair of the mathematical sciences department at UM, said Missoula’s push to emerge as a tech center gained momentum last month when Valinda Kennedy, a relationship manager with IBM’s Academic Initiative, visited the school.
As Kalachev puts it, big data streams in 24 hours a day, seven days a week. It comes through social media, news media, sensors used by industry and security firms, the Internet, video cameras and more.
“They are constantly streaming through the Internet, cable, phone lines and wireless connections,” Kalachev said. “While the total amount of data is constantly increasing, the actual portion of it that’s analyzed is going down.”
The old way of analyzing data required large amounts of storage and painstaking review days and months later. But the old way, Kalachev said, doesn’t allow businesses to make instantaneous decisions based on data as it streams in real-time feeds.
Making sense of that information presents new algorithmic and computational challenges, and it offers unsurpassed business opportunities. UM program leaders in computer science, information systems and mathematics are now looking at the reality of the new Big Data Program.
“The University of Montana is ahead of the curve compared to any other university in the chase toward the Big Data Program,” Kalachev said. “Many high-tech companies in the U.S., including several in Missoula, are waiting for the students currently taking the Streams course, and they’re looking for students who eventually participate in the Big Data Program to be hired to work in these new complex and exciting problems.”