A new accelerator, the IBM Alpha Zone, is set to begin in July, making it the tech giant’s first accelerator in the world and first attempt to take full advantage of the Start-Up Nation’s start-ups, said Rick Kaplan, country general manager of IBM Israel.
IBM established its first Israeli office in 1949. It may be surprising that it took the company until now to open an accelerator in Israel, as so many other tech companies have. IBM wanted to make sure it executed the plan correctly, Kaplan told a Tel Aviv audience in announcing the new accelerator Thursday.
“For the past 13 years, IBM’s Global Technology Unit [GTU] has worked with start-ups, but the accelerator will let us build deeper, earlier relationships with start-ups. This is a big moment for us, and another chapter in the IBM story in Israel,” Kaplan said.
That story is a long and distinguished one. “We do a lot of work with government ministries, and our technology has been deeply integrated in Israel since the company started operating here, right after the establishment of the state,” said Kaplan. “In 1972, we started the research and development arm of the company in Haifa, and today our developers deliver many hundreds of patents a year.” IBM, he added, is a “serial patenter — we file for about 6,000 patents a year, far more than any other tech company. And IBM Israel delivers the second largest number of patents for the company each year, with only US teams delivering more.”
IBM has acquired 13 Israeli tech firms in the past decade. Among them was last year’s purchase of Trusteer, a deal worth around a billion dollars — one of the biggest buyouts ever of an Israeli tech firm. “Our acquisitions in security, cloud and storage technology, and software development make IBM Israel a world-class location for development of all of today’s leading-edge technologies,” said Kaplan.
All that innovation and acquisition has made IBM appreciate Israel’s start-up culture, and in order to integrate even more with that culture, the company decided to open Alpha Zone, with a special IBM twist, said Dror Pearl, head of the IBM Israel GTU. “We decided we wanted this accelerator to be different. We are not interested in being a start-up factory like the others. We will be there for companies before, during, and after the program.”
Many accelerators in Israel concentrate almost solely on business development, which will be a major part of the program, said Pearl, noting that innovative technology is IBM’s main focus. The program will last 24 weeks, long for an accelerator in Israel, said Pearl. The start-ups accepted in the program have a lot of work to do. “We want companies with good technology that is ready to be developed into a product. Companies in the program will have access to IBM developers, who will help them build the best product possible.” Much of the program will be dedicated to development, “with companies doing work for a few weeks and then taking a week for testing.” That cycle would repeat itself as many times as necessary to perfect the product, said Pearl.
Once the product is developed, it will be displayed on demo days in Israel and abroad, seen by IBM customers the world over, with IBM sales staff there to help the companies market their products. Companies working in areas including big data analytics, cloud, mobile, security, Internet of things and commerce have the best chance of getting accepted, said Pearl.
IBM is not retaining any equity in accelerator companies, and isn’t charging any money. There are no requirements to sell the tech to IBM, and the company is not taking a portion of the intellectual property developed by program members. For IBM, it’s enough to have the opportunity to work with innovative start-ups and help them sell their products for the benefit of all, said Pearl. Candidates for the first accelerator round are being recruited right now.
Providing the business development component is Ziontech Blue, a US-Israel angel investment fund that partnered with IBM to create Alpha Zone. “IBM adopted us,” said Nathan Low, chairman of Ziontech Blue and the Sunrise Financial Group. “Start-ups have the technology, IBM has the sales force to help companies sell their products, and we have the skills companies need to make those products marketable. Together we are going to bring a lot more Israeli technology to the world.”
The idea of an IBM accelerator makes perfect sense because IBM itself is an accelerator of sorts, Low said. “We’ve been discussing this idea for several months, and during that time I got to know IBM very well. This is not your grandfather’s IBM, and it is not your father’s IBM. It’s not even your IBM,” said Low. “It’s your kids’ IBM. This is a company that has completely reinvented itself in the past five years, with new leading-edge technologies in so many areas, all while doing $100 billion in business annually with its ‘traditional’ product lines. This is a younger, more innovative and more aggressive company than most, large or small, and the technology that will be developed in Alpha Zone will enhance that innovation even further.”