2007 Volume 53 Issue 3 Pages 282-297
This paper examines the location conditions and market regions of Software companies in Seattle, based on the author's survey conducted in 2002, 2003 and 2005, and presents the feature of Seattle as a software companies agglomeration area. Seattle is not top-class city in the software industry, but the headquarter of the largest software corporation, Microsoft, locates in Seattle MSA. Thus, researchers have paid attention to this area as a type of industrial district with large companies and institutions. The present survey reveals the following five points: 1) The most important location factor is personal preference of founders or CEOs, followed by the second condition, availability of technicians or engineers. However, labor cost does not play a critical role as a determinant, unlike some cases in Japanese rural cities. This may be because of the characteristics of the industry (many companies taken as samples are packaged software companies) and of the kind of business they do (most samples are developing their own software products); 2) In 1990s when many software companies started business, more diversified conditions such as availability of proximity to venture capitals' or angels' investment affected the locations of companies; 3) An analysis of market regions shows that the rate income from outside the regions differs depending upon the types of industries; 4) Approximately 80% of the areas where major customers lives (or major sales areas) are located in the United States, and California, Texas, and New York are three major states regarding this point. Other major sales area are outside the U. S., in such developed countries as Canada, Japan and the UK; and 5) Only 8 companies investigated have close relations to Microsoft in terms of location conditions and sales. The points1) to 5) above indicate that many independent software companies in addition to Microsoft, are located in Seattle MSA and they provide their own software products or services for customers who widespread in the U.S. and the whole world. This is another feature of Seattle, "software industrial district."
