Tech Shops, Hungry for Brains, Face the Google Factor

"We've had candidates who have even accepted offers," then thrown them over for better salaries elsewhere, Itliong says.

"I can't pinpoint a specific company" that's losing engineers at a higher rate, Itliong said. "But if you can't define a career path for your software developers and can't compete on benefits, you're going to lose your people."

The Web 2.0 software skills in demand include Java, Linux and .NET.

VMware primarily employs systems engineers, while Adobe, Salesforce and NetSuite largely hire applications developers. But VMware is also hiring applications developers.

Google reportedly is paying an engineer with a master's degree and three years' experience up to $150,000, compared with $110,000 plus options at a start-up, according to Chowdhry.

"Google is hiring a lot of people," but candidates often drop from its lengthy process, Christensen says. SearchTech does not work for Google.

Robert Half Technology estimates that software developers in San Jose earn up to $126,000 in 2007, 4.2% more than in 2006.

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