Going into the new year, technology industry observers here say, positive trends in the sector statewide bode well for companies in the Inland Northwest, which they describe on the whole as coming back slowly.
Tom Simpson, president of the Spokane Angel Alliance and chairman and co-founder of Etailz Inc., says that in the broader market, the technology sector is seeing more mergers and acquisitions, more angel investment, and more initial public offerings, through which tech companies are becoming publicly traded.
While no IPOs are known to be imminent in the Spokane area, Simpson says, “Some of the things you’re seeing on the national level have trickled down into the Spokane market.”
Within the technology industry, he says, cloud computing is one of the largest growth areas. Liberty Lake-based cloud computing company 2nd Watch Inc. reported in November that it had landed $23 million in venture capital.
Kris Bliesner, CEO of 2nd Watch, said in a press release, “This investment will support our rapid growth and strengthen our ability to serve our enterprise customers.”
The company also said it plans to open more offices and hire more employees.
Kim Zentz, Spokane-based CEO of Innovate Washington, the statewide technology-focused economic development agency, says that agency is seeing an increase in the number of small, tech-related businesses forming and an increase in revenue among those business. Also, she says, the agency has a loan program for tech startups, and she sees more businesses repaying loans on time and paying ahead on those loans.
While the trends in Eastern Washington are consistent with the West Side, Zentz says the Inland Northwest tech sector isn’t rebounding as quickly.
In past economic downturns, Zentz says she thinks Spokane’s economy didn’t sink as low as some others and came back more quickly.
“In this case, I see us lagging a little,” she says. “What we’ll work toward is decreasing the difference in that disparity.”
Larger technology manufacturers here posted declines in earnings but are showing optimism about the future of their companies.
Itron Inc., the Liberty Lake-based maker of meter reading technology, reported a third-quarter net loss of $7.3 million, compared with net income of $35.3 million in the year-earlier period.
However, when the earnings were released in October, Philip Mezey, Itron’s president and CEO, said, “Revenues increased sequentially in each business line: electric, gas and water.”
Spokane Valley-based electronic manufacturing services provider Key Tronic Corp. reported net income of $1.7 million in its fiscal 2014 first quarter, which ended Sept. 28. That was down from income of $3.7 million in the year-earlier period.
Craig Gates, Key Tronic’s president and CEO, attributed the earnings decline to an anticipated reduction in business from large customers and said the company is working to diversify its customer base.
“We continue to see a robust pipeline of potential new business and have further diversified our future revenue base,” Gates said at the time.
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