Tech City, Indiana: Is Indy the New Spamalot?
Indy has a thriving tech sector, led by cloud-based companies focused on email marketing. Yawn if you must, but that less-than-sexy niche turned out to be extremely profitable.
This article is part of Indianapolis Monthly’s February 2016 Tech City package. For more on this window into the city’s tech world, click here.
Every so often, a single event heralds the arrival of an industry. For Central Indiana’s tech sector, that moment was June 4, 2013, when San Francisco–based Salesforce, one of the largest software companies in the world, bought ExactTarget, an Indy email-marketing firm. At $2.5 billion, the sale was a doozy—ranked fifth among U.S. tech buys that year, ahead of deals by titans like IBM and Cisco.
That feat may have snagged headlines, but it wasn’t the city’s only bullish news. “In the last decade, we’ve had about 20 acquisitions or IPOs around Indianapolis, and those yielded about $5 billion in market value,” says Mike Langellier, CEO of TechPoint, which promotes the local industry. “Not many places have had that kind of success. We’re not faking it. This is real.”
Also real is the upside to the economy. Since 2009, the number of computer and IT jobs in the region—paying salaries roughly twice the local average—has jumped 17 percent. And Forbes dubbed the Indy metro area ninth in the nation for tech-job growth in 2013, the sole Midwest city on the list.
Some of the cash pocketed by stockholders at ExactTarget—renamed Salesforce Marketing Cloud but still located here—has already flowed back into the city, as has its brain trust. CEO Scott Dorsey, for example, signed on as board chairman for TinderBox, another fast-growing digital-marketing firm. And backed by big swinger Hyde Park Venture Partners of Chicago, he helped form High Alpha, a venture-capital firm that might very well seed the ExactTargets of tomorrow.
A casual observer could be excused for assuming Indy became a tech hub overnight, because a lot of the local companies—like the city in which they operate—are pretty low-key. “It’s the land of unsexy tech,” says Shawn Schwegman, a former executive at Overstock .com who cofounded Carmel-based software developer DemandJump last year. Flying under the radar is at least partially a result of where the city’s tech sector has found its niche: digital marketing. “The products that get a lot of hype are consumer applications,” Langellier says. “But our focus here has really been on enterprise software that we’re selling to businesses. They’re playing critical roles in our lives, but we as consumers might not even recognize that they’re there.”
So maybe it’s a bit unfair to nickname Indy “Spamalot.” “Spam” often gets tossed around to mean any email pitch, but most in the industry reserve the slam for ads or promos sent to people who never asked for them in the first place. Salesforce Marketing Cloud and other local startups only help clients tailor emails to customers who have willingly provided their addresses.
Whatever you call it, the enterprise turns out to be very good business. “All the other things that are being heralded right now as the new marketing—Snapchat, Instagram, and Twitter—most of those aren’t going to lead directly to sales,” says Matt Hunckler of Verge, an Indy startup community group. “Email is the way you actually monetize them.”
So even if Indy isn’t San Francisco, and its tech companies aren’t likely ever to have the flash of Instagram or Snapchat, the scene here has at least one thing going for it. “Beauty is in the eye of the beholder,” says Schwegman. “To me, marketing technology that makes money—that’s my definition of sexy.”