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Posted on Tue, Jun 14, 2011 : 2:37 p.m.

Barracuda Networks plans to add up to 500 jobs in major expansion, possibly in downtown Ann Arbor

By Nathan Bomey

Barracuda Networks, fueled by growth in the information technology security industry, is mapping out a major expansion in Ann Arbor with plans to hire up to 500 workers over the next several years — possibly downtown.

The Campbell, Calif.-based firm, which employs 100 workers at its operation on Depot Street, hopes to establish a 100,000-square-foot technology campus, confirmed today.


Quality assurance engineer Nicholas Belluni works at Barracuda Networks' Ann Arbor office at 201 Depot St. in this photo from 2010.

Melanie Maxwell |

Executives told the company would prefer to build a new facility or purchase an existing building, rather than signing a lease. The building would serve as a base for its long-term expansion.

“Our investment has worked in Ann Arbor, so we’re basically looking to, as they would say in gambling terms, ‘double down’ and invest further,” Barracuda CEO Dean Drako said in an interview. “And if we can do that in a more permanent fashion where we have more control over our destiny, I tend to like that.”

Sean Heiney, Barracuda’s director of new product initiatives, said the rapidly growing company wants to “stay as close to downtown as possible.”

Drako and Heiney said Barracuda has run out of space at its rented 12,000-square-foot first-floor office at 201 Depot St., which is owned and leased by Ann Arbor-based First Martin Corp.

Heiney said the company needs to double its office space “immediately” and will need 40,000 square feet within two to three years. The rest of the company's existing building is occupied by planning and landscape architecture firm JJR, which expanded into the five-year-old building earlier this year.

Within about five years, Barracuda wants to own a 100,000-square-foot facility in Ann Arbor with 300 to 500 new workers, executives said. The company expects that it may have to lease new property in the interim while it identifies a permanent solution.


Barracuda employs about 100 workers at its 12,000-square-foot first-floor office on Depot Street, but the company's out of room to grow.

Melanie Maxwell |

Barracuda creates network security devices, provides email and web filtering products and phone system solutions, and monitors network attacks 24 hours a day, 7 days a week from its Ann Arbor office.

The privately owned firm, which has 700 employees globally and does not report sales figures, said in January that it had more than 130,000 customers in more than 80 countries.

If the company expands downtown, it would rank as downtown Ann Arbor’s largest private sector employer. Google employs about 275 workers at its sales office at the McKinley Towne Centre at Liberty and Division streets, though Google has long said it plans to have 1,000 employees eventually.

“We want to create a more Silicon Valley-type campus atmosphere where our employees can hang out with recreational facilities as well as dining,” Heiney said. “We’re very happy with participation in the downtown culture.”

The company has already started its search for land or an existing office. Heiney declined to provide details of what locations the company has considered but said the firm wants to have a plan in place by the end of the year.

Heiney acknowledged "challenges" that could prevent the company from expanding downtown.

There are no existing downtown office properties with 100,000 square feet of space publicly listed for sale or lease. If the company wants to stay downtown, it may have to purchase a plot of land owned by the city of Ann Arbor or Washtenaw County to build a new facility.

Otherwise, the company may be forced to move toward the edge of the city or even to a surrounding municipality, where commercial space is more readily available.

“We like the idea of being downtown because it’s a little more convenient for lunch and activities, and people can walk to work or bike to work,” Drako said. “However, there’s parking issues and finding a building. … So we may end up being a little further out where we can get more space and some of those things are more easily handled. That’s part of the thing we’re trying to figure out.”

Barracuda’s Ann Arbor office operation includes a core of product development engineers who have delivered several of the company’s most important security offerings. But the firm is also expanding its technical support staff and has recently starting adding sales and marketing employees to its local office.

The company plans to hire more employees of all kinds. (Apply for jobs here.)

"Finding people who actually care about taking care of our customers is really what we want," Drako said.

The company in 2008 won a tax credit from the Michigan Economic Development Corp.’s Michigan Economic Growth Authority (MEGA) board with a promise to hire 185 workers over five years. The company will soon have the option of giving up that tax credit in exchange for using the state’s lowered 6 percent corporate income tax, which Gov. Rick Snyder signed into law in May.

Heiney said tax relief from the MEDC won’t be ”a significant factor” in the company’s decision to grow. He said the MEDC tax credit has saved the company only about $100,000 so far.

Starting Oct. 1, the MEDC’s incentives will be limited to a pool of about $100 million after Snyder cut most of the state’s business tax credits

The company’s expansion comes as network security emerges as a key driver of the Ann Arbor region’s technology sector. Ann Arbor-based Arbor Networks, a University of Michigan spinoff, expects to grow from about 90 to about 120 workers by the end of 2011, after the firm was acquired by Texas-based Tectronix Communications.

Statewide, the network systems and data communication industry is considered Michigan’s fastest growing sector as measured by percentage job growth, according to a report last year by the Michigan Department of Energy, Labor and Economic Growth.

DELEG, which has been renamed Department of Licensing and Regulatory Affairs, estimated that the number of jobs in this industry would increase 38.2 percent a year from 2006 to 2016.

Drako said that the rise in digital attacks against corporations, governments and individuals is fueling a rise in interest and sales for network security products. He said Barracuda is also positioned to benefit from a surge of interest in security technology to protect cloud computing services, in which companies rent off-site server space.

“Security is just getting harder and harder and harder because the networks and the amount of stuff being put into computers and into the cloud is going up and up and up,” Drako said. “More and more money is being spent to try to make sure the data is not stolen.”

Although growth is fast-paced, Barracuda has previously reported some trouble in finding enough talent to keep up with the company’s growth in Ann Arbor, despite U-M’s highly regarded computer science engineering program. The firm was hiring new workers at a pace of 10 per month at one point last year.

Heiney spends much of his time recruiting — even chartering flights to Houghton, Mich. last year, for example — to seek out talent.

Nonetheless, he said he’s confident Ann Arbor can provide the base of talent to make the company’s expansion successful.

“We’ve got some ideas about establishing a more formalized recruiting program in Ann Arbor,” Heiney said. “With the establishment of a formalized program, we’re confident that we can keep this staffed with great smart grads from the region.”

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Thu, Jun 16, 2011 : 7:04 p.m.

Tektronix is spelled with a 'k' not a 'c'.


Thu, Jun 16, 2011 : 12:57 a.m.

My computer geek son says that the picture of the Barracuda employee is "awesome" and he wants to work for them. I hope formalized recruiting involves internships with WCC and UofM students. From my perspective, I am happy that my skilled and educated children will have opportunities for employment near home.

Mike K

Wed, Jun 15, 2011 : 3:52 p.m.

Hey look, King Rick appears to be making MI a decent place to have a business. "The company in 2008 won a tax credit from the Michigan Economic Development Corp.'s Michigan Economic Growth Authority (MEGA) board with a promise to hire 185 workers over five years. The company will soon have the option of giving up that tax credit in exchange for using the state's lowered 6 percent corporate income tax, which Gov. Rick Snyder signed into law in May." I would agree that these jobs might not be the kind for the currently unemployed, but most certainly could lead to those types of jobs as each new employee becomes a consumer of local goods and services. Commerce matters. Thanks for checking in Mr. Heiney. If you need any expertise in the area of plastics, do inquire.

Cheryl Jordan

Wed, Jun 15, 2011 : 2:11 p.m.

Great news .........but where are they all going to park ?


Sat, Jul 16, 2011 : 10:34 p.m.

Good question

Mike D.

Wed, Jun 15, 2011 : 1:36 p.m.

This is great news. Barracuda is a great company that's growing. Google seems to be here only because its founders went to U of M; its Ann Arbor operation was always intended to consist of sales and lower level functions. In contrast, Barracuda is likely to create highly skilled, high paying jobs. I've always assumed I'll have to leave Ann Arbor in the next 5 years because of the profound lack of this sort of opportunity. Maybe not!


Wed, Jun 15, 2011 : 10 a.m.

Is no one else fascinated by the fact that the fellow in the caption is sitting at a desk with no fewer than 10 phones with multiple lines/functions within arms reach? And a headset and a computer? And cable to all that strewn all over? Makes this business look more like a seat-of-the-pants operation, lol.


Wed, Jun 15, 2011 : 12:36 p.m.

Barracuda sells a VoIP phone system called Cudatel. The guy in the picture is a Cudatel developer. Makes sense to me that he would be surrounded by phones.

Lets Get Real

Wed, Jun 15, 2011 : 3:37 a.m.

Congratulations! You've managed to convince Ann Arbor that your are "Job Creaters" - the magic word in Michigan right now. Let me tell you my story about this organization. When they came here, they brought in people from their staff in CA to "ready" the building - security systems,. etc. One of their employees rented my fully furnished home for the month he would be here working so he could "bring his family with him." When she and the child arrived and we chatted, it became apparant that they had family in a neighboring town. She took the invoice, and indicated her husband would write a check when he arrived "later." After waiting until nearly midnight, I went to bed. They stayed the night, and when I went to the grocery store in the morning, they left saying they decided to stay with their relatives. They turned in the invoice for reimbursement, stayed with their relatives for free and turned in the invoice for reimbursement. Me, I suppliment my income helping people in short term housing situations like this and I turned down other prospective tenants because I had made a promise to them. They, skipped out stiffing me. Nice. Can't wait to have more of these so young, so smart, so arrogant folks added to our town. I get the job creation thing, but watch the INTEGRITY FACTOR with this "private company that doesn't report profits." Seems if there is an angle, they will exploit it.


Wed, Jun 15, 2011 : 1:55 p.m.

Good for Mr. Heiney to respond so promptly and positively on behalf of his company. It appears that 'Lets Get Real' wasn't getting real with his own business. 1st of all his story wasn't about the organization, it was about a single family. 2nd, renting a house without a deposit(did you bother to do a background check?) and having a signed contract isn't real smart business. Sounds like he's trying to blame someone else for his lack of diligence.

Mike D.

Wed, Jun 15, 2011 : 1:30 p.m.

Wow, that's service!


Wed, Jun 15, 2011 : 12:01 p.m.

Hi -- if you were never paid on an invoice, please send me the details including a copy of the invoice -- We'll sort this out.


Wed, Jun 15, 2011 : 2:06 a.m.

Sell them the new underground parking garage and the air space above it and let them build the building that they need.


Tue, Jun 14, 2011 : 9:59 p.m.

Where do you find 500 engineers all at once? . They would do better in hiring the right attitude and just training the new hires for the slot that fits them best. Disney and Marriot have been very successful with hiring attitude first and skill sets second.


Thu, Jun 16, 2011 : 7:17 p.m.

Obviously that is why they chartered a plane to Houghton. Hire Tech grads and then train them to do the job. Unfortunately for many this type of work requires a level of education above high school. Whereas Disney and Marriott are service companies with jobs that require people skills more than technical skills. On the other hand bringing in more engineers means more people who can afford to spend money in the community buying food etc. and therefore more people employed. While these jobs don't have as big a scale factor as automotive where I have read that 1 automotive job lost leads to more than 3 jobs lost in the following years, I am sure it is probably at least 1 other job is gained for every 2 or 3 a place like Baracuda hires.


Wed, Jun 15, 2011 : 2:05 a.m.

@mojo It takes more than a good attitude and desire to write computing code. This isn't just about company values; it requires actual technical skills that usually starts with a good background starting in high school. Companies like this do have openings for sales, technical writers, HR, etc. But, even these require skills.


Tue, Jun 14, 2011 : 9:38 p.m.

I will believe this (like the whole Google thing, or Pfizer before it), when I see it. In any case, these jobs will benefit those who don't need to worry about finding a job in the first place, as evidenced by Mr. Heiney's local recruiting difficulties. They are not recruiting many from the ranks of the local unemployed, so much as they are importing them from elsewhere. I'll wager few of the indigenous unemployed will ever be able to attain the specialized knowledge of arcane computer technologies requisite for these positions. However nice to have in the community, jobs like this won't save Michigan from its massive, indigenous, joblessness. Too few of 'em, and not accessible to many!


Tue, Jun 14, 2011 : 8:18 p.m.

Does Ann Arbor really want these kinds of people downtown? Young,smart and wealthy? They might want to eventually wipe out some of the low cost housing to build more upscale lofts and then rents will rise! Taxes will go up, city revenue will go up and force the downtown to be a place where the HOMEless are not welcomed!


Tue, Jun 14, 2011 : 8:14 p.m.

Tell me again exactly what percentage of the 1,000 people Google has hired on a full time, non-contractor basis since it did its tax deal with the State of Michigan and got free parking spaces from the City? Over promise, have a desperate State and City throw money at you, and then under-deliver. Companies like Barracuda can literally take that strategy to the bank.


Tue, Jun 14, 2011 : 8:01 p.m.

Excellent news!


Tue, Jun 14, 2011 : 7:37 p.m.

We have a lot of land in downtown Ypsilanti for sale...a little space called Water Street. And Ypsi sure could use the boost of a large company residing here.


Tue, Jun 14, 2011 : 7:24 p.m.

Give them whatever plot of land they want to keep them downtown.

DaLast word

Tue, Jun 14, 2011 : 7:18 p.m.

How about the Borders headquarters buildng on Varsity drive?

Linda Peck

Tue, Jun 14, 2011 : 7:13 p.m.

Very exciting news!