By Claudia Fan Munce
IBM has long had a keen interest in tech startups. For nearly two decades, behind the scenes, we forged relationships with venture capitalists to learn about their portfolio companies with an eye to acquiring some of the best of them when the time was right. That strategy served us well. Over the past decade, we have acquired more than 120 companies for a total of more than $34 billion dollars in critically strategic areas such as cloud computing, digital marketing and data analytics.
But oh how our world is changing.
Today, IBM is emerging as a major player in the startup economy. We continue to pursue our acquisition strategy, but now we’re doing much more. We have begun to invest directly in startups, we offer cloud services for thousands of born-on-the-Web companies, and we’re working with startups to help them build services powered by Watson, the cognitive computing system that shook up the world by beating two former grand-champions on the TV quiz show Jeopardy!.
Our latest foray came last week, when IBM CEO Ginni Rometty announced the IBM Watson Mobile Developer Challenge a first-of-its-kind worldwide competition to promote development of mobile consumer and business apps powered by Watson.
For me, this shift is particularly exciting. I started off my career as a scientist in IBM Research and shifted to the company’s venture group 14 years ago. Today, it’s gratifying to see one of the most significant advances ever produced by IBM Research, Watson, beginning to have a huge impact on business and society.
Here’s what we’re doing with startups:
Cloud Infrastructure Services: When IBM acquired SoftLayer back in June last year, it not only gained one of the world’s leading cloud infrastructure providers, but a unique startup “champion” with its Catalyst program. Started in 2011, the Catalyst program empowered more than 1,300 startups globally, providing them with IT infrastructure (servers, storage and networking) credits, executive mentoring, and engineering resources so they can quickly come to market. SoftLayer has worked with some of the most innovative “born on the web” companies including WhatsApp. To learn more about Catalyst, click here.
A Watson Ecosystem: We launched a new business unit, IBM Watson Group, to focus on cognitive technologies. We’re investing $1 billion and quickly ramping up a staff of 2000. We opened the Watson Developer Cloud to third-party developers three months ago, and, already, more than 1700 organizations have asked to participate. We’re going through the process of identifying the companies that can fully leverage the power of Watson. The ones we choose will gain access to tools and technologies that enable them to build applications on top of the Watson platform.
The IBM Watson Mobile Developer Challenge: We have invited mobile developers to submit their best ideas for apps that harness the power of Watson. Winners will receive strong support from IBM including mentoring and the Watson sandbox to play in.
The Watson Venture Capital Fund: We have set aside $100 million to invest in companies that are building apps and services powered by Watson. The first investment was in Welltok, which operates CaféWell, a health optimization platform that enables people to improve their health via a combination of social networking, gaming and personalization technologies. Through Welltok’s customers, primarily large healthcare organizations, the service has the potential to touch the lives of more than 20 million people.
A Development Platform for Cloud Services: We’re building a platform-as-a-service offering, Codename:BlueMix, which will make it easier for startups to quickly build new cloud services, test them and deploy them at massive scale. Startups will get support from our Ecosystem Development Group to leverage a wide range of IBM resources, including co-marketing programs, education, networking events, sales lead assistance, deploying IBM technology, and helping startups go to market.
IBM’s offerings target entrepreneurs who are incredibly ambitious. We cater to pioneers and innovators who create valuable new services for businesses and individuals based on mining the value of big data, augmenting human brain power with computer intelligence, and delivering insights to the palm of your hand via cloud and mobile technologies.
The evolution of our strategy parallels fundamental changes that are happening in the venture capital community. While many venture capitalists were focusing on social networking and mobile apps just a few years ago, some of the boldest among them are pivoting to the tremendous new opportunities offered by big data, predictive analytics and cognitive computing. Manoj Saxena, who formerly ran the Watson business within IBM, recently joined The Entrepreneurs Fund, a Silicon Valley-based venture capital firm. He’s now a close partner to us in the venture community, seeding startups that will apply cognitive computing innovations, along with cloud and B2B technologies. We’re developing an engagement model with him that we hope to use with many other venture capital firms.
Our relationships with venture capitalists will deepen and broaden in the coming years. In partnership with them, we will help the next generation of entrepreneurs bring innovations to market and help transform business and society. Personally, I’m thrilled to be part of the next era of computing.