Merger brings tech jobs to New Orleans

New Orleans CityBusiness, May 6, 2002 by Keith Brannon

New Orleans is about to become home to the computer programming division of a company that handles all the on-line escrow services for Internet auction site eBay. Escrow.com of Santa Ana, Calif., is moving an estimated 10 information technology support and programming jobs to the city as part of a recent merger with iLumin Corp.

of Reston, Va. The move is a cost-cutting measure. The programming staff will join iLumin's 35-person IT development team downtown in its Poydras Street office. ILumin Corp., which was formed through a merger with locally-founded company Certia Inc., provides encryption software and infrastructure that enables companies to complete secure financial transactions on-line through digital signatures. Local IT entrepreneur Greg Meffert founded Certia and, as iLumin's chief technology officer, has been instrumental in keeping the programming and development team in New Orleans. "It's a high-profile deal for the city," Meffert says. The companies finalized the merger April 25 and officials would not disclose the estimated value of the new company. Escrow.com had raised approximately $40 million in venture capital prior to merger; iLumin has raised more than $50 million, Meffert says. Executives do not know how many employees will move to New Orleans from California. Officials are making offers to existing programmers and do not have a final count on how many will accept. "None of that has been determined yet," says iLumin spokesman Brian Maughan. Escrow.com management will stay in California. The company employs approximately 30 people. After the merger, iLumin employs approximately 85, Meffert says. Escrow.com provides transaction and payment solutions, including licensed escrow services, for e-commerce. The company's secure software automates all on-line transaction components. The merger gives iLumin a software solution that allows customers to automate different types of paper-based transactions while providing better on-line security and control, Maughan says. The two companies share a key investor, Micro General Corp. of Santa Ana, which helped the merger go through, Meffert says. But the decision to move the IT division to New Orleans had more to do with keeping expenses down. Meffert says the company chose New Orleans because it can maintain a strong development staff cheaper here than in California or Virginia. Salaries and turnover rates are much lower here than other places with higher concentrations of information technology companies. The median wage for programmers in New Orleans is approximately $53,000, according to a 2002 staffing survey by local IT recruiting firm Ascent Consulting Group. The median salary for programmers in the West Coast is approximately $67,600, according to DataMasters, a North Carolina professional services firm specializing in information technology. Meffert says that even though New Orleans never really benefited from the tech boom of the late '90s, it may be able to take advantage of the bust. Cash- strapped start-ups that were flying high two years ago are trying to stay lean to survive. The biggest expense for technology companies is the cost of skilled workers. New Orleans can recruit other technology companies by showing that they can do business at lower cost here without sacrificing a high quality of life, Meffert says. "(Escrow.com) serves as an iconic example of what could happen here," Meffert says. Last year, iLumin moved to Virginia from Utah and later acquired Certia, which opened in New Orleans four years ago, but moved its corporate headquarters to Herndon, Va., in April 2000 to be closer to investors. Both companies significantly reduced staff during the last 12 months to stay competitive at a time when many companies are scaling back information technology expenditures. Certia laid off almost 43% of its staff when it eliminated 30 sales and management positions in Virginia last May. ILumin cut loose most of its information technology staff when it laid off 40 employees in Utah last year. *