Austin has long been hailed for its vibrant nightlife, thriving live music scene, and eclectic cuisines. But there is more to the city’s charm than abundant leisure attractions, music venues, and bustling waterfront commerce. In recent years, Austin has counted itself among the fastest-growing major tech hubs in the United States—rivaling even the world’s capital of innovation and technology, Silicon Valley.
Tesla’s announcement to relocate its headquarters to the city, following the construction of its new Gigafactory nearby, has added to the latest string of tech giants to call Austin their new home. Among those companies are Hewlett-Packard Enterprise, Oracle, and Sydney-based Canva. Several other companies with a long-standing presence in the area have also been vying for further developments, including Apple’s ambitious $1 billion campus, Google’s $50 million office investments across Austin and Texas, and Facebook’s downtown real-estate expansion.
This spate of high-profile strategic developments has not only brought an influx of skilled tech workers and capital into the area but also created new economic opportunities for small and midsize tech companies.
In this highly competitive environment, Austin entrepreneurs need more than just business acumen and strong leadership to succeed. Ramping up their digital capabilities has become ever more pertinent.
So what makes the City of Violet Crown a prime real-estate for the tech industry in the first place? And how would it impact the local businesses?
The Great Tech Migration
High tax rates, myriad industry red tapes, and stifling property prices have made Silicon Valley’s business climate increasingly inhospitable over the years. In search of better opportunities, many investors and executives turn their gaze to Austin as the next viable tech destination.
The West Coast’s waning investment appeal, however, isn’t solely the catalyst for Austin’s enviable tech boom. High affordability, quality education, and the absence of corporate and individual income taxes have become the primary drivers for this industry demand.
As compared to other tech hubs in the country, the city enjoys relatively affordable costs of living. A comparative analysis by NerdWallet has shown that, on average, the living expenses in Austin are 49% lower than those of San Francisco—with housing seeing a 71% sharp decline in costs. Consequently, with better job prospects and quality of life, the Greater Austin population grew almost 30% by 2019—topping the list as the country’s fastest-growing metropolitan area.
Lower median property values and rental prices also mean Austin tech companies have much lower operating costs than their Bay Area counterparts. Naturally, this has led to an 8.1% increase in the number of local tech firms last year. The presence of prestigious schools in the area, including Texas Tech University, has also underpinned much of Austin’s growing tech workforce, which accounts for 17.1% of all the total jobs.
What does this mean for Austin entrepreneurs?
Austin has boasted unparalleled market stability to many local entrepreneurs. This became even more evident during the tumultuous height of Covid-19 last year. While the rest of the nation was still grappling with the devastating economic fallout, by May 2021, Austin managed to clamp its unemployment down to 4.6%—much quicker than even San Francisco. New data from the Austin Chamber of Commerce further reported that over four months since August, 44 companies had established their presence in the Greater Austin this year alone—bringing in about 7,164 new jobs to the area. In 2019, the city also successfully secured $1.9 billion investments in startups with a salubrious 3% growth in the labor force.
But this exponential sector growth does not come without a caveat. The incursions of tech firms to the area have saturated the market—forcing many to desperately ramp up their strategies to find breakthroughs even amidst the Covid-19 recession. And despite regaining 96% of all pandemic-related job losses from last year’s spring, the city has still seen a steady number of companies cutting off their office leases in favor of a remote workforce.
With workplace digitalization gaining currency, Austin’s future workforce is now at a crossroads. The growing favorability for telecommuting has encouraged more entrepreneurs to rethink business solutions from digital-driven perspectives. How businesses interact with customers, which third-party vendors they can partner with, and where they find skilled professionals to hire, for example, are no longer confined to manual and tangible processes. This shift towards digital—largely virtual—operations, thus, gives rise to proprietary software development.
Building a robust application
If there’s one thing that we can learn from Austin’s burgeoning tech market is that you can never be overprepared. Having the ability to timely adapt to unprecedented threats and bring disruptive ideas to life is just one of many advantages to developing your own bespoke software. This proprietary software doesn’t just help differentiate your value proposition from other competitors. But it also gives you the chance to customize broad-based functionalities as needed since it is designed with operatioFor example, to help Unilever enhance its procurement process with more incisive decision-making, we designed a proprietary application that would automate digital data aggregation. The application not only cut down overheads and processing time, but it also presented the market analysis in a clear, readable dashboard format.
Finding the right software development agency
Amidst the presence of mighty tech juggernauts battling for dominance, building digital capabilities in the right market niche is incredibly crucial. In some cases, however, assigning an internal team of developers to undertake such a task isn’t always feasible, nor is it affordable. For faster time-to-market and deployment, outsourcing, thus, becomes a much more lucrative option.
But how to know which software development agency is the right one? Here are four criteria you can use to assess your candidates:
- Company structure
Every software development company can be classified into four broad categories: onshore, offshore, nearshore, and hybrid. Each category has its benefits, so pick whichever fits your requirements the best.
- Onshore refers to an engagement model where a team of software developers is outsourced domestically. The benefits of onshore developers include smoother communication, shared cultural norms, and better compliance and accountability thanks to similar tax policies and laws. On the flip side, the costs for their services are generally steeper than other types.
- Offshore means outsourcing product development to a company outside your own country. Offshore development allows you to find professionals with the right expertise at a much cheaper price. However, different time zones, tax regulations, and laws can make communication much more challenging.
- Nearshore is a happy middle ground between onshore and offshore in that you can find the right talents at a competitive rate from a neighboring country without experiencing communication issues due to extreme time and geographical differences.
- Hybrid combines onshore management with offshore developers. This eccentric engagement model allows you to tap into global talents at an affordable price while still maintaining close contact with the outsourced company. This heightened flexibility enables you to supervise projects better.
- A credible track record
A software development company with a credible track record is always proud of its portfolio and the relationships it has forged with past clients. In addition, a portfolio is a useful benchmark to gauge the skills and services the company offers. So make sure to check out all the curated past projects on the company’s website before taking your pick.
- The scope of expertise
Every software development company has developed particular preferences for tech stacks to work with, ranging from the types of programming languages to write the codes down to the servers to store the files. Therefore, find a company with expertise and tools that are compatible with your needs.
- Quality assurance and safety measures
Always enquire beforehand what measures the company would take to ensure the software’s quality and safety throughout product development. This is because companies with a contingency plan are better prepared to avert risks and adapt to changing circumstances.
Austin’s booming popularity as the country’s hottest tech haven has fundamentally transformed how local businesses embrace technology. Digital proficiency—for instance—is no longer an added value to boost profitability. Rather, it has become a necessity for the industry players in the locale to maintain competitiveness. Outsourcing software development, nonetheless, remains tricky despite the abundance of tech firms in the area. This is primarily because there are certain criteria that tech companies must meet to ensure their suitability with a given project.
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