Updated: Tuesday, June 5, 2018, 10:03 AM
People familiar with Vanguard Group’s IT operations have told me in recent days that the $5 trillion-asset investment giant, which has 11,000 employees at its Malvern-area headquarters and nearby office sites, plus temps and contract workers, has scouted places in northern Virginia for its next data center.
“There are plans for a new data center, but I cannot confirm its size or location,” Vanguard spokesman John Woerth told me.
“I can say that the new data center offers a purpose-built, state-of-the-art facility that will position the organization for continued global scalability,” he added. “Vanguard’s IT Division will continue to operate our data centers from our Malvern locations. However, we are still determining if a small number of Vanguard crew will be needed on-site at the new location.”
Woerth also referred to remarks in a Vanguard statement earlier this year: “We are investing considerable resources in people, technology, and infrastructure to protect our clients’ assets and data; to enhance fund performance; and to improve the overall investing experience at Vanguard.” He added, “The new data center is part of that effort.”
As customer assets have topped $5 trillion in recent years, ranking Vanguard among the largest U.S. investment managers, and its index funds have made it the largest shareholder for many U.S. companies, Vanguard has grown faster outside its home state. The company says it employs 16,600 people, including 11,000 in Pennsylvania, or almost two-thirds of the total. In the late 2000s, the company said it employed around 12,000 people, including 10,000 in Pennsylvania, or 5 out of 6.
Besides the Malvern location, Vanguard has U.S. office centers in North Carolina and Arizona, and sales offices, trading desks and other facilities in New York, London, Hong Kong, and other financial and investing centers.
Vanguard grew since its 1975 founding by John C. Bogle as a company focused on technology to avoid some of the costs associated with traditional investment sales and services. While rivals such as Fidelity Investments opened a network of local walk-in offices in major markets, Vanguard preferred customers correspond by mail, use its toll-free phone lines, and communicate by email. The company has since the early 2000s automated much of its customer service, and in recent years set up “robo-advisory” services in which customers pay fees for advice that is delivered through largely automated systems.
All that software requires updates, security, and tech-savvy employees and contractors. In a sign the company may be tapping out the Chester County and King of Prussia area tech labor market, last year Vanguard opened an office in central Philadelphia in hopes of attracting a new tech team and other young urban professionals by helping them avoid the hour-long commute out to its Malvern campus.
Vanguard ranks with Merck, Comcast, and Wawa among the largest private, for-profit employers in the Philadelphia area.
State economic development employees and Sen. Andrew Dinniman (D., Chester) said the company had not requested aid lately in exchange for expanding in Pennsylvania.
Last year, Vanguard’s marketing unit said in a public filing that it was trying to get a $6.5 million refund on Pennsylvania state income taxes.
Read full story: Will Vanguard Group put its next data center in Virginia? (Updated)