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Why the Northeast is Best for Enterprise IT Investing

A recent look at 2015 innovations trends by IDC shows significant growth in nearly every area impacting enterprise IT – including cloud, big data and analytics, mobile and internet of things. In fact, cloud services, a hotbed of activity in 2014, will likely accelerate in 2015 with $118 billion in spending on the greater cloud ecosystem. As the topic rises to a new level this year and the industry approaches a massive tipping point born out of necessity and opportunity, investors are continuing to pour money into new startups.  Regionally, the west coast has long had a healthy share of this activity, but recently it seems some believe it is the only place to focus venture dollars as some high profile east coast venture firms have moved to CA.

Yet at Ascent Venture Partners, we remain focused exclusively on helping to build companies in the Northeast. The reason behind our firm-wide commitment is this: while underappreciated by many, the opportunity for enterprise technology investing in the Northeast is substantial. With leading R&D centers, a significant share of the largest technology customers, 82,500 existing technology companies and over a third of the annual angel dollars invested in the US, this geography has a strong eco-system and is ripe with opportunity.

Recently, we took a look at the various elements that construct this rich landscape. These factors include, among others: the talent; the tech innovation; the startup activity; the venture competition; and the overall enterprise IT market. A few highlights from our findings:

    • The talent is here. Of the top 10 U.S. universities, seven are in the Northeast and two are in the West; and of the top 100, 13 are West Coast while 45 are in the Northeast.
    • The startups are here. The Northeast boasts an impressive 158,000 new companies each year, while the West has 87,000, according to U.S. Census Bureau data. The Northeast also attracts 34% of angel investment dollars, compared to 20% in California.
    • The buyers are here. Thirty one percent of Fortune 500 and 30 percent of Inc. 5000 companies are located in the Northeast, while 11 and 14 percent, respectively, are found on the West Coast.

The infographic below details these findings and data sources, along with additional points that we think are significant and speaks to the innovation that is happening here. Northeast-based technology is transforming organizations across the US and around the globe, and we are excited to be a part of it.

ascent_east_west_final_updated_Oct2014

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