High Techs Southern Shift

California vendors head south as PC market transitions.

Is Southern California the new Northern California?

I had a lot of time last week to think about the shift of Californias high-tech industry southward. During a week of rain, as mudslides moved the ground from Los Angeles South, I had a chance to talk to a number of companies about the tech shift South.

The PC industry has moved south for sure. Hewlett-Packard (which always seems to have the adjective "troubled" in front of it in news stories lately) handed off its PC business to Vyomesh Joshi, who lives and maintains an office in San Diego. Joshi won all the accolades for the successful printer business—which probably qualifies as the most profitable tech company in California—and now has all the problems associated with competing against Dell.

In addition to HP, there are three other big PC vendors in Southern California. Toshiba last week was reported in Tokyo to have promoted the head of its PC division, Atsutoshi Nishida, to be its next president. That promotion is good news for the Irvine, Calif., notebook division. Gateway acquired eMachines last year, and computer veteran Wayne Inouye is now the president and CEO of Gateway, working to get the company refocused on PCs and on a profitable track.

The other company Id put in the PC category is Linspire, in San Diego. Linspire is the company that is furthest along in building out a Linux ecosystem for PCs, from operating systems to applications to support. The companys CEO, Michael Robertson, also does a great job at being vocal about Linuxs advantages over Windows. With the PC business in transition and turmoil as another round of corporate laptop replacement is starting, this is a good time for the PC vendors to reassert themselves.

So Southern California is the current stop for companies trying to challenge Dell and Microsoft. How does that make the area a tech up-and-comer? Northern California has Google, eBay and more biotech companies than you can count. And the Northern California region has always had a tight tie-in among established companies, venture capitalists and entrepreneurs, which the tech companies to the south seemed to lack.

Of course, Southern California has always had the glamor of Hollywood and the style consciousness of Orange County, both of which bypassed anything north of San Jose. (Southern California also usually has real nice weather, but I could attest to the contrary last week.)


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Id also argue that Southern California vendors are ahead of the curve in the new technologies of digital communications and Web-based applications and the ability to market their products. Broadcom, in Irvine, and QualComm, in San Diego, are two key telecom drivers. Quest Software is big in trying to create a large integrated development tools business; Major League Baseball bought Tickets.com (in Costa Mesa); and WebSideStory, in San Diego, is a leading company in Web analytics. A company that is essentially a database and marketing operation, ditech.com, is changing how mortgages are marketed and financed throughout the country.

And then there are the television shows. "We have The OC," said Quest Softwares communications manager, Eileen Algaze, when I asked her why tech is on the rebound in Southern California. "The OC" and the "Laguna Beach" show on MTV have created a buzz about Southern California that the folks in the Northern part of the state cant hope to achieve, she said.


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Algaze also noted the lessening of reliance on the big military and aerospace companies and an increase in startups as a reason why "tech is on the upswing." She felt the best high-tech companies in the region meld the "California outdoor feeling with a seriousness about business" that is new and appealing to employees.

And then there is the weather, which is often very nice but last week was not. I will say that the continuous downpour created a seriousness about driving that was welcome to see in an area where talking on the phone while whipping along at about 80 mph always seems like part of the lifestyle.

Editor in Chief Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.

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