News & Observer | newsobserver.com | NetApp to create 646 high-paying jobs

Published: May 08, 2007 12:00 AM
Modified: May 08, 2007 03:06 AM

NetApp to create 646 high-paying jobs

The data storage company could qualify for incentives worth $15.3 million or more

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A California company that helps businesses manage the avalanche of digital data is expected to hire nearly 650 employees in Research Triangle Park, doubling its local work force.

A state committee voted Monday to offer Network Appliance an incentive grant worth as much as $15.3 million in exchange for creating 646 jobs and investing $41.5 million on its RTP campus.

NetApp, which has 633 employees in the Triangle, will probably accept the offer at a news conference with Gov. Mike Easley this morning. The jobs would have average annual salaries of more than $94,000. NetApp must create them over the next four years and sustain its payroll for six more to receive the full financial aid.

"These are very attractive, highly technical jobs with rather substantial salaries," Commerce Secretary Jim Fain said on a conference call with committee members Monday morning.

There's reason to think NetApp won't stop at 646 new workers. In 2004, state officials promised NetApp up to $8.9 million to create 361 jobs over five years. The company exceeded its own expectations, creating about 480 jobs in half that time.

NetApp credits the region's talented workers and cheap electricity with spurring much of its expansion in the Triangle, where its growth outpaces its other sites'. But the company's overall business also is growing like gangbusters. With simple-to-use data-storage devices that help customers reduce their overhead, NetApp's sales are increasing at least 30 percent a year.

The publicly traded company is the third to receive more than one job development investment grant from the state, joining Credit Suisse and General Electric. NetApp could receive up to $1.94 million from two other tax credit programs.

The Wake County commissioners considered incentives for NetApp in a closed session Monday. County Manager David Cooke said the county wouldn't make the amount of its potential incentives package public until today's news conference.

Commissioners planned to discuss offering the county's standard package, which would be worth 2.25 percent of the total invested in new construction, Cooke said. That would be about $933,750 for an investment of $41.5 million.

It's not clear whether the investment and new jobs would include expanding in an existing building on NetApp's campus. The company has an option to buy a 100-acre parcel across the street from its Kit Creek Road site.

Ken Hibbard, NetApp's vice president of East Coast operations, declined to comment on the possible expansion until today.

NetApp also considered expanding in Pittsburgh, Fain said on the conference call.

NetApp's employment ramp-up comes as other large high-tech employers in the Triangle are cutting their work forces. Lenovo is laying off 350 of its 1,700 employees in Morrisville, and IBM is laying off 50 workers in RTP.

There's a good chance some of those 400 employees would have skills useful to NetApp. A certain level of engineering expertise is based on experience, but a large part of it is grounded in concepts, said Robert Fornaro, a computer science professor at N.C. State University. "If you understand the ideas, you can pick up new things pretty well," he said.

Demand for NetApp's hardware and software is surging because doing business today means creating data -- and lots of it. Consider e-mail, inventory records, customer information and renderings.

In 2006, the amount of digital information created, captured and replicated was 161 billion gigabytes, or 3 million times the information in all the books ever written, research firm IDC reported in March. The authors expect the amount of digital information created annually to increase six-fold by 2010.

NetApp's devices employ a single operating system that masks much of the technology's complexity, making them easy to use and reducing the number of people needed to manage a company's storage, said Daniel Renouard, managing director for technology research at Robert W. Baird & Co.

"That's been something they've been very laser-focused on for the last 15 years," he said.

As demand for its products has grown, so has NetApp's payroll. The company has expanded from 265 employees worldwide to more than 6,000 over the past decade.

Renouard's biggest concern is how the company will handle that expansion. "They've got a great culture there and they're hiring a lot of people," he said. "Will they be able to manage the growth and keep the culture together?"

(Staff writer Michael Biesecker contributed to this report.)

Staff writer Anne Krishnan can be reached at 829-4884 or anne.krishnan@newsobserver.com.
Staff writer Michael Biesecker contributed to this report.
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