Apple and Amazon are looking outside the Bay Area for expansion. What does this say about Silicon Valley?
Yes, Silicon Valley remains the hub of technology innovation. But as Apple's and Amazon's latest real estate developments suggest, it may no longer be the growth center for tech.
SEE: The future of IT jobs: A business leader's guide (Tech Pro Research)
Amazon, of course, never has been centered in Silicon Valley. While the company has employees there, just as Microsoft has, it has grown its presence in Seattle. When its footprint in Seattle grew to overflowing, the company doesn't appear to have considered adding capacity in California. Why would it? The state as a whole is expensive for businesses and the people they employ, and the Bay Area, in particular, is ridiculous in the trade-offs it forces people to accept.
And so Amazon decided that even New York City (!!) and the Washington D.C. area were better and more cost effective than Silicon Valley. That's saying something.
More interestingly, however, is Apple's less publicized decision to significantly expand its workforce in Austin (from roughly 6,000 employees to as many as 21,000 over the next few years), as well as Culver City, San Diego, and Seattle. In each case, Apple is investing in areas that can fill out strategic fits for the company: Austin gives it access to semiconductor talent; Culver City keeps it close to Hollywood talent; San Diego lets it pilfer from Broadcom talent and build around its patent minefield; and Seattle offers Apple a deep reservoir of machine learning expertise.
Could Apple have found this talent (with the exception, perhaps, of the Hollywood DNA) in Silicon Valley? Sure. Would it cost dramatically more? Absolutely.
SEE: Apple plans new $1bn campus plus big US job growth (ZDNet)
Because people live elsewhere
The other way to read this is that (gasp!) the best talent doesn't necessarily live within a 50-mile radius of Palo Alto. Apple might be able to find good modem chip developers close to Cupertino, but the best such engineers are in San Diego. And so Apple is going where the talent is, which isn't always going to be Silicon Valley.
In fact, with the rise of open source software and cloud computing, the best talent will increasingly be wherever smart people have access to a broadband connection and a penchant to experiment with open code. Companies like Amazon Web Services are accelerating this trend toward "talent everywhere" by opening up its Machine Learning University so that "the same machine learning courses used to train engineers at Amazon are now available to all developers through AWS." In theory (and AWS clearly expects this to prove true in practice), great machine learning engineers will no longer be residents in Seattle or Silicon Valley. They'll grow up everywhere.
And so, if you're trying to hire great engineers, why keep competing for the same limited pool of engineers who live in the Bay Area? Rather than overpay lesser talent just because they have the right zip code, why not track that talent through GitHub, wherever she may live, to hire the best engineers and probably for less?
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