Information Technology is a well-established and dynamic business sector in Kansas City. Many factors contribute to Kansas City’s appeal to technology companies, including our geo-central location, robust telecommunications infrastructure, superior energy capability, and deep IT talent pool.
Kansas City, Missouri, can lay claim to a number of innovative software companies of all sizes – many of them homegrown. Local software success stories include:
- Cerner Corporation, founded in Kansas City in 1979 and now headquartered in North Kansas City, specializes in healthcare information technology. Cerner has 7,500 employees worldwide (4,500 in Kansas City), and serves more than 8,000 clients.
- DST Systems was founded in 1969 as a subsidiary of Kansas City Southern to develop an automated recordkeeping system for the mutual fund industry. Today, DST has 11,000 employees worldwide (4,500 in Kansas City) and provides information processing, software services and business solutions to the financial services, communications, and healthcare industries.
- Tradebot Systems, founded in 1999, uses computer algorithms to analyze the potential of stock market trades. In 2008, Tradebot began trading in markets outside of the United States.
- Yoodle, founded in 2007, is a software development and services company serving clients regionally and branching out nationally, offering a range of services, including enterprise application development, web content management, and e-commerce.
Where there is software there will be data, and Kansas City offers an ideal location for secure data storage. In addition to the data centers associated with software giants like Cerner and DST, major companies in many industries operate data centers in Kansas City, including American Century, Bank of America, Hallmark, Honeywell, H&R Block, Liberty Mutual, MasterCard International, and State Street.
Why is Kansas City, Missouri, a great location for IT businesses and data centers?
Infrastructure
Kansas City has a world-class telecommunications infrastructure and is a point of convergence for transcontinental fiber and related communications networks. The Kansas City metro is home to Sprint’s world headquarters, and Sprint has deployed a set of four MAN (Major Area Network) rings throughout the Kansas City area, an architecture designed to provide self-healing capabilities during fiber cuts and electronic outages.
The city’s state-of-the-art technology landscape also includes 1102 GRAND, a carrier hotel located in a 26-story landmark building in the heart of downtown.1102 GRAND is the largest carrier neutral facility in the Kansas City Metro area and one of the fastest growing of its kind in the Midwest, and its success is a testament to Kansas City’s robust telecommunications infrastructure and reputation for reliability.
IT talent pool
Kansas City, Missouri, is at the center of a metro area with a labor force of more than 1 million, and 32% of the metro area population has a four-year degree – 5% higher than the national average. In addition, Kansas City has a solid base of employees with IT experience and training:
- The IT workforce in the Kansas City area numbers more than 34,000, with a high concentration of IT professionals working in financial services, telecommunications, data processing, software and engineering.
- Kansas City area universities and community colleges produce more than 1,000 IT graduates each year.
- Fifteen institutions in the area offer bachelor’s degrees in computer and information sciences (about 430 graduates each year), and the University of Missouri-Kansas City and the University of Kansas also offer graduate degrees.
- Computing-related engineering programs in the Kansas City area award about 130 bachelor’s degrees each year and twice that many associate’s degrees.
- The IT recruitment pool also includes recent graduates from major universities in a multi-state region.
Reliable, affordable energy
The Kansas City region boasts one of the most robust energy delivery networks in the world. Transmission systems serving Kansas City are designed and built on “first contingency” basis, so the loss of any particular generator or transmission line has no effect on supplies across the region. In general, systems here are less interconnected and less densely populated than those on the East and West Coasts, and Kansas City is a very unlikely candidate for an energy blackout.
KCP&L (Kansas City Power & Light), which serves more than 80% of the region’s customers, consistently ranks among the best at providing constant, uninterrupted electric service. The company annually invests in improvements that contribute to power quality and delivery throughout its own system and the successful Southwest Power Pool, the area’s regional transmission coordinator.
Not only is energy here reliable, but it is also very affordable. Operational efficiencies have allowed KCP&L to actually reduce prices four times since 1987, making Kansas City one of the most competitively priced energy markets in the country. In its Winter 2007 report, Edison Electric Institute, which tracks average retail rates for investor-owned utilities, reported average rates per kWh of 5.74¢ in Missouri, compared to average rates in New York of 14.99¢/kWh in New York and 13.69¢/kWh in California.
Cost savings and incentives
Kansas City offers lower costs than most major metro areas and is consistently ranked among most affordable major markets in which to live and operate a business. In 2009, the Kansas City metro area scored 95.7 on the cost of living index from the Council for Community and Economic Research (C2ER). According to the U.S. Bureau of Labor Statistics, the 2009 average hourly wage for computer and mathematical occupations in Greater Kansas City was 92% of the national average.
IT businesses in Kansas City, Missouri, can qualify for several available incentives:
- Five-year decreasing utilities discount equivalent to one year of free electricity
- Tax credits based on job creation and capital investment
- Real property tax abatement in some locations (discretionary program)
- Personal property tax exemption to reduce property tax on machinery and equipment (discretionary program)
Low natural disaster area
Kansas City’s central location in the U.S. reduces the likelihood that KC-based operations will become a target for disruption. In the case that recovery is required, Kansas City is within a day’s driving distance of a number of metropolitan areas.
- Earthquakes: Historically, strong earthquakes have not occurred in the region and the Kansas City area is in relatively little threat of significant seismic activity. Greater Kansas City is located in Zone I, minor damage, with anticipated intensity of V-VI on the Modified Mercalli Scale. This seismicity is directly related to the New Madrid Rift Zone to the southeast and the Nemaha Uplift to the west; both features represent weak zones in the crust.
- Tornadoes: Tornadoes can strike in any city in the U.S., and an average of five tornadoes touch down each year within a 50-mile radius of Kansas City (approximately 10,000 square miles), according to the National Weather Service. In the Midwest, tornado frequency is highest from early spring through the summer.
- Kansas City’s abundance of underground commercial space provides unique advantages to businesses with seismic and/or extreme weather concerns.
Driving distance to other metro areas
Seismic activity
Tornado activity
Source: NOAA, Storm Prediction Center Statistics.
Selected IT businesses in Kansas City, Missouri:
1102 Grand – carrier facility
Ajilon Consulting – IT outsourcing
BalancePoint, Inc. – IT consulting
Cerner Corporation (HQ in North Kansas City) – healthcare information technology
Cytek Corp. – Network design and support, security, IP telephony
DST Systems, Inc. (HQ) – information processing, software services and business solutions
ECCO Select (HQ) – IT outsourcing
Gray Swan Software (HQ) – medical office management software
Greensoft Solutions – regulated hosting and colocation
OpenMethods (HQ) – VoIP consulting, voice apps, user interface design
Tradebot (HQ) – stock exchange software
Versent (HQ) – computer and network support for small businesses
Yoodle, Inc. (HQ) – software development and services
