By Michael Alter
Dec. 16, 2010
Whether you’re talking politics or business, Chicago is a machine that keeps the country running. While its heyday in meatpacking and manufacturing ended in the ‘70s, Chicago has latched on to its next calling: providing the technological solutions businesses rely upon every day.
In the last decade, the city has developed a burgeoning community of B2B online companies, becoming the Silicon Valley of the Midwest. And one day, the Second City may take first place as America’s capital of eCommerce. Why? Because the city is built for it. Chicago’s slaughterhouses and factories of yesteryear required miles and miles of railroad lines to import all the raw materials processed day in and day out. According to Tom Grotenfield’s “Why CIOs Like Chicago Data Centers,” railroad right-of-ways served as the easiest points to lay fiber optic lines necessary for excellent Internet service.
Thanks to some visionary Internet developers and planners, Chicago quickly became a leading city for companies to build data centers—the facilities that can host websites and companies’ internal and external online software. The Chicago Mercantile Exchange relies on a data center in the city rather than the Big Apple; for example, because they measure the transfer of data in milliseconds, and a 17-second lag time between New York and Chicago would kill them on the trading floor.
In late 2009, Microsoft opened a 700,000 square foot data center in the Chicago area. Digital Realty Trust boasts a 1 million square foot operation in addition to another sizable facility in the area. From the suburbs to the Loop, Chicago is packed with cutting-edge data centers.
With all of this technological infrastructure and software engineering talent in place—the first web browser, Mosaic, was invented in Illinois—Chicago entrepreneurs discovered the benefits of battling traffic on Lake Shore Drive during their daily commutes rather than trekking across the Golden Gate bridge.
My company, SurePayroll, settled in the North Shore in 2000. We weathered the dot-com bubble burst and the financial collapse of 2008 by providing a simple online-only payroll product businesses need whether business is good or bad. Ten years and more than 30,000 customers later, we’re still able to find the top talent we need for software development, IT, customer care, sales and marketing in the area. And, of course, we’ve taken advantage of Chicago’s numerous data center options to find the perfect balance between speed and security—this location doesn’t make us sacrifice one for the other.
The comparatively low cost of real estate between Chicagoland and Silicon Valley enables us to charge less for our service. And it means our employees aren’t shelling out $1 million or more for three-bedroom houses close to some of the greatest sports, entertainment and cultural institutions in the world—even if they must trudge through snow and sleet to get there four or five months out of the year.
SurePayroll has found itself in good company with other leading online B2B firms. Authentify has developed technology to ensure businesses are not disclosing sensitive information to hackers by automatically calling customers to verify they’re engaged in an online session. This technology gives banks and other financial institutions the peace of mind they need to conduct business in the most efficient way possible.
Norvax also leads the pack in health care and online insurance sales. If you’ve ever visited a website where you could compare health insurance quotes, odds are Chicago’s own Norvax is the technology that generated that list. With states now required to set up health insurance exchanges by 2014, Chicago has the solutions to help the public sector with simple online insurance quote engines.
With clients ranging from P.F. Chang’s to Popeyes, Arrowstream uses online supply chain management and logistics software to connect restaurants to a network with 32,000 lanes and 7,100 shipping locations. Not bad for a company that started the same year as mine did.
These examples are only a fraction of what Chicago online B2B firms are offering the nation, and the world. With the network, talent, and affordable cost of living, Chicago is poised to take the torch from Silicon Valley.
Michael Alter is the president and CEO of SurePayroll, a Chicago area-based online payroll company with 30,000 customers. Alter has more than 10 years of experience in marketing, sales and strategic planning in the online b2b environment. He holds a bachelor’s from Northwestern University and an MBA from Harvard University.