Move over, Silicon Valley. Here's Utah Valley!
With more than 85 high-technology electronic companies operating in Utah Valley, high-tech industry has become a large contributor to the county's economy. And according to the executive director of the Utah Valley Economic Development Association, the majority of those companies have rocket-like growth potential.Richard Bradford said, "There are a few shooting stars out there, and sure enough some of those companies will take off like a rocket."
Bradford, a California transplant, said, "We hear people saying that this is the next Silicon Valley. I see the signs and same pattern as I saw in California when Silicon Valley was born. It's almost like deja vu."
The "Move over Silicon Valley" slogan, found on a Utah Valley Economic Development Association brochure, was adopted by the county agency several years ago after a number of area businesses experienced tremendous growth.
Annual sales for the 85 companies, half of which are less than five years old, are estimated at $800 million this year. Combined, they employ more than 5,500 workers.
Growing high-tech companies in the valley range from developers of computer software and coal liquefaction to manufacturers of computer cables and switch boxes.
But perhaps most of the growth in Utah County's computer industry should be attributed to WordPerfect Corp., developers of word processing software, and Novell Inc., developers of local area networks for mini-computers. Both companies have been the catalysts for other high-tech companies.
Bradford calls it the ripple effect. Companies that sell products and services to the technical industry have been able to grow in the area because of the success of both Novell and WordPerfect.
"As those companies have developed and become more sophisticated, it increases our ability to attract additional companies because there is a support base of services."
Novell and WordPerfect lead the pack in growth, building as fast as they can to keep their products on the front line.
WordPerfect absorbs 20 to 25 acres of land a year, said R. Duff Thompson, general counsel for WordPerfect. The company just finished three new buildings in the Timpanogos Research and Technology Park in Orem.
A fourth building will be completed in a month, a fifth in three months, a food services and fitness facility next spring and a sixth building in June, bringing total square footage to 250,000. Two more buildings are also in the planning stages.
"We think we are still going to see substantial growth with winning products," said Jeff Acerson, director of corporate communications for WordPerfect. "We have future products coming out and with a very solid base, we think we can take it into the future."
WordPerfect began with two employees in 1979 and no venture capital. Nine years and 1,000 employees later, annual sales are in excess of $100 million.
The company has had a 150 percent growth rate each year as sales continue to double every year. This year is no different. Year-to-date sales have exceeded $124 million, 82 percent ahead of sales by this time last year.
In this year's third quarter, WordPerfect had record-breaking sales of $50 million.
Novell also broke sales records for this year's third quarter. Net sales increased 51 percent for the third quarter, and net sales for the first nine months of 1988 increased 56 percent.
Since Novell was incorporated in 1983, the company has grown into a $182 million company that employs more than 1,500 people. Net sales have doubled each year since the incorporation.
Novell recently announced plans for expansion at the corporate headquarters in Provo's East Bay. Construction on phase three has already begun and will add 78,000 square feet to the facility. Expansions on phase one will give 25,000 more square feet as well, bringing total square footage for Novell in Utah to about 250,000.
Mike Judson, manager of press relations for Novell, said, "Only 15 percent of computers in the country are networked. There is a huge untapped market out there. The outlook for growth is great."
But other high-tech companies are experiencing success as well.
Take ICON International, for example. ICON is the developer of a family of super micros and mini computer software systems marketed under the ICON/Sanyo label.
And ICON is what Bradford calls a shooting star in Utah County.
"I think ICON will blow the lid off the IBM personal computer," he said. "The company will take the micro computer into the next dimension of power."
The ICON machines are unique because they allow a system to run up to four operating systems simultaneously.
ICON, incorporated in 1984, started pushing sales in 1985, and in 1987 sales were at $3 million. For 1988 they are at $10 million, and next year are expected to reach $36 million.
The company has 110 employees and plans to increase that to 250 next year.
ICON first began in a 200-square-foot office, then moved to a 4,000-square-foot facility and is now in a 12,000-square-foot building. The company will move into a 40,000-square-foot facility in November at the Timpanogos Research and Technology Park in Orem.
"I'm confident we will meet our sales objective," said Dennis Fairclough, ICON president and founder. "It's a good market, and we have a good product. Now we are becoming known."
SoftCopy Inc., an Orem software manufacturer for WordPerfect, Novell and a number of other computer companies, has also grown rapidly in the past few years.
"This is an easy service to sell and we have a great work force," said Steve Ashton, SoftCopy president. "We are providing a good living for a lot of people. I've never seen a more intelligent, trustworthy work force."
Other companies agree that Utah's highly educated work force has helped them get where they are.
"The broad base of technical people made it practical to start a business here," Fairclough said. "They are hard-working and have high integrity."
Bradford said with the influx of high-tech businesses, there is "some upward pressure on wages. The rumor that wages are low here is not accurate. Middle management and above earn as much here as other places in the West."