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Ann Arbor Spark

August 24, 2018

A Primer on Ann Arbor’s Tech History 

This blog was contributed by Cooper Jenkins, summer 2018 research intern at Ann Arbor SPARK. Cooper is about to start his senior year at the University of Michigan as an economics major and business minor. In his short time at SPARK he demonstrated an affinity for researching and writing about the regional economy.

In recent history, Ann Arbor has emerged as a hub for technology and innovation with the founding and acceleration of cybersecurity companies like Duo Security and Barracuda Networks. While a lot of the headlines suggest Ann Arbor’s sudden appearance on the national stage, there actually exists a solid foundation of innovation — one that has been fostered by the city and the University of Michigan for decades.

In Randy Milgrom’s How the Net Was Won, he describes how the University of Michigan’s Douglas Van Houweling and Eric Aupperle knit together a team that would submit the winning bid to upgrade the National Science Foundation’s NSFNET backbone — the early stages of connected computing which allowed universities and academics to share information. Milgrom explains, “The ARPANET came before [the internet]. And the World Wide Web and browser technology would later make it accessible for the masses. But in between, a small Ann Arbor-based group labored on the NSFNET in relative obscurity to build—and ultimately to save—the internet.”

Having some of the earliest roots of the Internet seeded in Ann Arbor paved the way for strong computer science and cybersecurity curriculum at the University of Michigan. These well-equipped students became highly sought-after talent in the strong startup culture that Ann Arbor nurtures. A natural byproduct of creating an open framework for what would become the Internet we know today was the need to secure it. This problem created the growing demand for cybersecurity solutions, which many Ann Arbor startups have aimed to address. For example, Censys which was first founded at the U-M in 2015, launched its own company in 2017 to better serve growing demand for its Internet-wide scanning services.

Several successful companies have already followed this formula for success. In 2000, Arbor Networks was born when co-founders Farnam Jahanian and Rob Malan spun the company out of the University of Michigan. The company, which sells network security and network monitoring software, now has offices in Massachusetts, London, and Singapore. Additionally, it is where Dug Song, who would go on to found Duo Security, broke into the Ann Arbor tech community. Barracuda Networks, another big name in the Ann Arbor tech community, opened their Ann Arbor office in 2006, founded three years earlier by Dean Drako, Michael Perone, and Zach Lavow. In 2008, the security company acquired BitLeap, whose founders would then move to Ann Arbor and eventually launch NutShell, a CRM application. They then went on to found Trove AI, and have most recently created Cahoots, a tech incubator aiming to continue Ann Arbor’s tech-rich legacy.

Duo Security, Ann Arbor’s biggest startup success story, was one of 23 ‘unicorn’ startups in 2017— those scoring valuations of $1 billion or more. Duo’s came in at $1.17 billion. Less than a year later, the popular cybersecurity company was acquired by Cisco for $2.35 billion —double its valuation. The company was founded in 2010 by Dug Song and Jon Oberheide, years after the pair met through the University of Michigan. The superstar cybersecurity company now has locations across the country, including New York, Seattle, and Austin, and an international office in London.

One might imagine Ann Arbor’s tech scene like an enormous iceberg — while casual onlookers may only see the tip, the massive structure below the surface is most impressive. Which Ann Arbor-based company will be next to emerge into the national spotlight?

Other Ann Arbor cybersecurity companies: Duo Security, Barracuda Networks, Inc., Arbor Networks, ETAS Inc., Online Tech Corp., Quantum Signal LLC, Pinkerton, NetWorks Group, QuadMetrics, Inc., ESCRYPT, Trillium Secure, Inc., ZCorp Technology, Inc., novacoast, Karmaba Security, Blurima, Inc., Templar Integrated Security Solutions, LLC, Security Snares, Inc., Arbor Insight, LLC, Arroyo Networks, LLC, Grove.id, AppCurity, Inc., Neutrino Systems