MTEC SmartZone graduate company, Xeratec, implements new rural outsourcing model

HANCOCK, Michigan (June 10, 2013) – Global information technology (IT) company, Xeratec, is yet another local entrepreneurial success story. Recently graduating from MTEC SmartZone’s Lakeshore Center, Xeratec opened a new office in the FirstMerit Bank building in Hancock.

Xeratec is a Rural Sourcing IT solutions firm that specializes in software development, support and maintenance for critical business applications. Rural sourcing, also known as onshoring or domestic sourcing, involves sending work to service providers in rural locations where the cost of living and operating expenses are lower. This cost-competitive alternative is perfect for companies that want to avoid offshoring or the high price of traditional IT consultants.

“With this new business model we are able to offer 30 to 45 percent savings over our competitors located in metro areas or overseas,” Xeratec President Steve Hillstrom says.

One key to this success is Xeratec’s ability to hire low-cost, high-quality student talent from Michigan Technological University and Finlandia University, while also retaining highly skilled senior staff members in the local area.

“We expect to create more local jobs in the next one to five years,” Hillstrom says.

Originally incorporated in 2003, in Milwaukee, Wisconsin, Xeratec’s headquarter office relocated to MTEC SmartZone in 2006.

Hillstrom credits MTEC SmartZone and Keweenaw Economic Development Alliance support resources and services, which helped Xeratec develop into a global IT solutions leader. In addition to office space, they had access to sales training, intellectual property assistance, financial resources and expertise in developing business marketing plans.

For more information about Xeratec, please visit

To learn more about programs for entrepreneurs at MTEC SmartZone, call (906) 487-7000.