Talent, Talent, Talent: Citrix Picks North Carolina Over Georgia and FloridaApril 17, 2017
(Episode 16 of “The Project: Inside Corporate Location Decisions”)
For a multinational software company like Citrix, people are the secret sauce to success. We bring the story of how talent trumped just about every other factor that goes into a location decision to allow Raleigh, North Carolina to win a 400-job expansion, beating out competition in Fort Lauderdale, Florida, Alpharetta, Georgia, Santa Clara, California and Austin, Texas.
We interview Nate Spilker, Citrix Vice President of Product Management and James Sauls, Economic Development Director for the City of Raleigh, to get the full story.
Patience Fairbrother (DCI): For a company like Citrix, a multinational software firm with more than 10,000 employees worldwide, people are the secret sauce to success. Without talented tech workers, skilled customer service, and sales professionals, and savvy security talent, the company goes nowhere. So it’s no surprise that the company chose to set up what is now their fastest-growing tier one facility in the U.S., in Raleigh, North Carolina, part of what’s known as one of the smartest metro areas in the nation.
Andy Levine (DCI): Today, we bring you the story of how talent trumped just about every other factor that goes into a location decision to allow Raleigh to win a \$5 million dollar, 400-job expansion in and out competition in Fort Lauderdale, Florida, Alpharetta, Georgia, Sta. Clara, California, and Austin, Texas. So, welcome to episode 16 of “The Project: Inside Corporate Location Decisions.” I’m Andy Levine of Development Counselors International.
Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s co-host of The Project. This week, we take you inside Citrix’s decision to bring 400 jobs to Raleigh’s Warehouse District. To give you the full story, we have to go back to 2011 when Citrix acquired a North Carolina startup called ShareFile, which resulted in the company setting up shop in Raleigh.
Andy: Nate Spilker, Vice-President at Citrix, has a unique perspective on this decision. Nate went to Duke University and joined ShareFile in the fall of 2007 as the startup’s fifth employee. He was with the company at the time of the acquisition and has since climbed the ranks within Citrix. Today, he oversees product management for the company.
Patience: Nate describes the company’s mission as making the world’s applications and data secure and easy to access anytime, on any device, anywhere. Here’s Nate Spilker.
Nate Spilker (Citrix): I’d say there are three major areas that Citrix focuses on. One is network delivery. We have a very successful business, and the main product there is NetScaler. The second is virtualization, virtually delivering applications and desktops. And then, the third is secured data access and sharing, and the product there is ShareFile.
Andy: So ShareFile accounts for one of Citrix’s three main product areas. At the time of the acquisition about 5 years ago, ShareFile had around 80 employees in Raleigh and has since grown 10-fold to more than 800 Raleigh employees. We asked him about what Citrix looks for in a new location.
Nate: Obviously, there are tons of things that go into that decision process. But at the end of the day, the most important part of that decision was around people. And being in technology, it’s a very competitive space for talent, and people are, by far, our most important asset.
Andy: So, Citrix takes talent very seriously. But when they acquired ShareFile, it wasn’t a given that the company would stay and continue to expand in Raleigh.
Nate: So, when we acquired, you know, we were…the ShareFile team was about 80 people, which, you know, in a company of about 10,000 people, it’s not that significant. I mean, the truth is, you can…a company of Citrix’s size could pick up and move 80 people pretty much anywhere they want. And so, we know that keeping the team together was really important. But then, where is the best place for that team?
And we opened up the world of possibilities and looked at all possibilities, and Georgia was one that we looked at at the time and we still do. We had a pretty major presence just outside of Atlanta and Alpharetta. So, that area was an opportunity for us. Even though it wasn’t a tier one site, it was a place that we already had a footprint. We looked at Austin as well as a possibility, just as a tech hub and some place that we might be able to establish more of a footprint and attract more talent. And then, obviously, Fort Lauderdale and California were two other options.
Patience: When he says tier 1 site, he means any site that has more than 500 employees. So, Citrix looked first at locations where the company already has a strong base of talent, in Fort Lauderdale, Florida, Alpharetta, Georgia, and Santa Clara, California. Austin, Texas was also on the list simply because it’s a well-known tech hub. We asked Nate what made Raleigh standout as a place to continue to grow their operations.\
Nate: There was a whole process, a whole checklist that the team walks through in evaluating all of the sites. I would say some of the major components are, first, going back to people, you know, what area had the ability to attract and retain the top talent, which, to start, you need to be able to have. You have to have a talent pool. Raleigh scored tremendously well in having an educated technical talent pool to draw from. A big contributor there is our density of universities and new grads coming out of our local universities. So, that was the primary, the leader in the checklist.
Andy: Many of the key players at Citrix are products of North Carolina’s educational institution. Nate Spilker and ShareFile and founder and CEO, Jesse Lipton, are both graduates of Duke University. Mark Templeton, the CEO of Citrix at the time of ShareFile’s acquisition, actually went to North Carolina State University.
Now, our other interview subject this week is James Sauls, Economic Development Director for the City of Raleigh, and he also went to North Carolina State. James has been with the city for about six and a half years and he describes himself as about as local as you can get. James’ involvement with the Citrix project dates back to 2012 when the company was in the process of purchasing ShareFile.
James Sauls (City of Raleigh): Citrix was, at the time ShareFile, was located in what you’d consider suburban Raleigh, so not in downtown city center. When we met with them, we were doing a typical existing industry visit, which is to, you know, go out and meet with an existing company to find out how things were going, is there anything we can help them with with their growth, with their workforce needs.
Patience: But what started as a typical industry visit turned into a massive opportunity for the City of Raleigh to pitch Citrix on the idea of relocating out of the suburbs and expanding into a warehouse in downtown Raleigh.
James: One of our council members was actually walking through the Warehouse District, looking at one of the old Dillon Supply buildings, which was a steel company that was doing distribution and welding of steel in the Warehouse District, which is where it gets its name from. And she was aware of the project, because we had a very high level community meeting which included this particular council member, the mayor, myself, our planning director, just to talk about what things could be. And we threw the idea out about going into that Warehouse District building.
Everyone thought that it was crazy, thought it would never work. Lo and behold, about two years later, we’ve got a brand new 110,000-square foot renovated building that really is one of the shining stars in our city. Everyone that comes here wants to take a tour of it, wants to see an open environment, a lot of amenities for employees.
So, what turned out to be more of, I would say “traditional” project of looking at real estate taxes incentives, really, we pitched this idea about doing this really massive redevelopment in the Warehouse District. Citrix saw the vision. A development team was put together. They were able to make the numbers work and, voila, here we are, what, four and half later.
Patience: Citrix has since transformed a formally abandoned warehouse into a state-of-the-art building with unique design features, such as conference rooms made out of old shipping containers, tables made out of railroad ties, and even an indoor racquetball court and a rooftop bocce court. The company has been instrumental in transforming what’s known as the Warehouse District into a hub for creatives and tech talent.
Andy: But on to the most recent investment decision, the company’s footprint was obviously a factor in this decision, but it really came down to, once again, the issue of talent. According to both Nate and James, the company’s looked at all the same locations. They looked at Florida, Georgia, California, Texas, as possibilities for this 400-job expansion. Here’s what James had to say on why he thinks Raleigh’s greatest value proposition for Citrix was talent.
James: We pride ourselves on what we feel is the trifecta of talent, which not a lot of places can say the trifecta, which is that we can grow it, we can retain it, and we can recruit it. And when you’re a company, that’s what’s very important. So, to elaborate on that, Citrix, one of the first things we do is we tell them, you know, and we can make the introductions, but you’ve got to get engaged with the local universities, because you can start to groom your future talent through those relationships. So again, my elevator speech, talent, talent, talent. The ability to, you know, grow it, retain it, and recruit it is really what sets us apart.
Patience: So, as always, we wanted to know what role incentives played in the decision. As part of the project, Citrix is eligible to receive up to 5.7 million in total reimbursements in the form of a job development investment grant from the state. James used what was one of my favorite analogies for the relative importance of incentives in a location decision. He also guesses that the incentive offer from Georgia was probably a bit higher, but Raleigh had all the other pieces of the puzzle that Citrix was looking for.
James: Well, I think incentives are…the best analogy is just the chocolate syrup and the cherry on top, right? You know, the first phases of any project like this that I’ve ever worked are always gonna be quality of life evaluation, tax evaluation, how can I run my business, and then, certainly, talent. And in real estate, is there available real estate that we can get in today and then, you know, look five years out that we have the room to grow what this kind of…that environment look like?
I think, once they’ve checked all those boxes, then it’s down to looking at incentive packages. But, again, I don’t know what it was, you know, public records request, you get that pretty quickly, but what the package was from the state of Georgia, but if my gut told me what I’ve seen in other projects that I’ve worked against the state of Georgia was probably substantially more. But, you know, they’re gonna run out over time, right? And Citrix has been nothing more than a…or nothing less than an outstanding corporate citizen.
And I really think that once they were able to check the boxes around tax structure, quality of life, talent, then they made a decision of where they were gonna live for the foreseeable future and where they wanted to grow their footprint. And at the end of the day, the incentives was that chocolate and cherry on top of that. But the other things, I would say, outweighed the incentives by far.
Andy: To wrap things up, we wanted to get a sense for how Citrix’s presence in Raleigh has helped shape the city and, in particular, the Warehouse District.
Nate: I think that the most important thing that we’ve been able to do as an organization here, we’ve built a great product and we’ve serviced Citrix customers very, very well. But one of the most important things that we’ve done is we’ve created jobs and livelihood for 800 people here locally, and that magnifies itself in the community.
And so, since we’ve established our site in downtown Raleigh, nearby we’ve seen apartment complexes go up and condos go up, and we can look out our window right now and see Union Station construction happening, and another massive multi…or mixed-use development project going on.
Patience: Thanks to the presence of companies like Citrix, Raleigh’s Warehouse District will soon see another catalyst for growth, Union Station, which is a multimodal transportation hub worth about \$80 million that’s set to open later this year. Citrix will continue to contribute to this growth, adding 400 jobs over the next 5 years. According to Nate, Citrix’s Raleigh office is the company’s fastest-growing presence in the U.S.
Andy: So, here we are at the takeaways portion of this episode. Patience, you did most of the interviews associated with this episode. What stood out to you as the most memorable portion of the Citrix story?
Patience: I think, number one has to be the fact that the initial industry visit that the city of Raleigh did is actually what led to this entire expansion in the first place.
Andy: So they were just calling on a company that was a current employer and just trying to see how they were doing essentially?
Patience: Exactly. And they had this idea, basically, that, you know, this tech company is out in the suburbs, could we bring them into downtown, into one of these warehouses that’s currently abandoned as a way to kind of revitalize that area and also just because it’s an interesting space that the tech company might like? And, you know, you see pictures of it today, and it’s just this gorgeous state-of-the-art building, and they’ve really done a lot to revitalize that area. So…
Andy: And they would have like 800 people that work there now.
Patience: Exactly, exactly. Pretty incredible.
Andy: So, I’m gonna pick up, and this is a familiar theme, it’s what we title this episode, but it’s on the importance of talent, you know. We have done now 16 of these episodes. Increasingly we hear over and over again that talent is the driver of where a company chooses to locate. I think it’s probably…this is probably, of the 16 episodes we’ve done, the strongest example of that. And we do see with tech companies, they want to know where is the talent today, but also where is it gonna be tomorrow. And there is this feeling that its gonna be in the downtown area, and that’s why Citrix decision makes total sense here.
Patience: Definitely agree. I think I’ll just wrap up by mentioning that I always love talking to companies and economic developers about incentives. I feel like that’s the hot button issue and I like to hear, you k now, what they think about them in general. And James’ response is one of my favorite I’ve ever heard, which is that he views incentives as the chocolate syrup and the cherry on top of the deal. I just thought that was a great image.
Andy: Okay, and I like all images that have to do with food. So, it works for me, too, so good. So that is a wrap on episode 16 of “The Project: Inside Corporate Location Decisions.”
Patience: Huge thank you to both Nate Spilker at Citrix and James Sauls at the City of Raleigh for sharing their stories. I really enjoyed speaking with both of them.
Andy: We also need to thank Morgan High of Wake County Economic Development for helping us set up both of these interviews.
Patience: “The Project” is sponsored by DCI. We are the leader in marketing places and observed over 450 cities, states, regions, and countries. You can learn more about us at aboutdci.com.
Andy: We are always looking for new and interesting projects to profile. If you’d like to see your company or location featured on “The Project,” we’re always open to your ideas.
Patience: We hope you will keep listening. There are many more projects to come.