IBM fetes its ‘children’ on accelerator Graduation Day

Five start-ups completed the Alpha Zone program, and another six are beginning it

IBM executives and members of the first and second groups in the Alpha Zone Accelerator cut a blue ribbon inaugurating the second accelerator class, January 2015  (Courtesy)
IBM executives and members of the first and second groups in the Alpha Zone Accelerator cut a blue ribbon inaugurating the second accelerator class, January 2015 (Courtesy)

“I’m a good Zionist,” IBM Israel Country General Manager Rick Kaplan said of himself, and as part of that “job,” he promotes Israeli tech around the world. As he told a crowd of over 300 at Tuesday’s Demo Day graduation ceremony for companies enrolled in the first-ever IBM Alpha Zone accelerator for start-ups, Kaplan would like to see more countries adopt the values and creativity of the Start-Up Nation.

But on second thought, what works here might not work elsewhere. “It’s true that there are good start-ups and entrepreneurs elsewhere,” said Kaplan. “But then I realize that to make a real Start-Up Nation, you really need Israeli start-ups.” The creativity and capabilities of Israeli entrepreneurs are what puts Israeli start-ups on a higher plane, and makes Israel the start-up Mecca that it has become, he said.

If that’s the case for run-of-the-mill Israeli start-ups, it’s especially true of the companies that have gone through the Petah Tikva-based IBM Alpha Zone accelerator, said Kaplan. “Alpha Zone fits perfectly with IBM’s way of doing business,” he said. “The start-ups in the Alpha Zone accelerator are using IBM technology in creative ways, building the applications and service of tomorrow that will bring real change to the world.”

IBM was so proud of its start-ups, said Kaplan, that the graduation event was being broadcast live to IBM’s many facilities around the world – an honor usually reserved only for top-level events, such as presentations by IBM CEO Ginni Rometty.

Rick Kaplan (Photo credit: Courtesy)
Rick Kaplan (Photo credit: Courtesy)

The just-completed first round of the 24-week Alpha Zone Accelerator program provided the five start-ups that started the program last July with access to mentors, technology advisers, assistance from IBM research and development pros around the world, and a long-term plan to help companies get funding. The point of the program was to streamline the technology and business acumen of the start-ups, bringing them to the point where they could “go global,” selling their products or services around the world – with help from IBM’s huge worldwide sales force.

And the plan worked, said Nathan Low, whose Ziontech Fund and Sunrise Financial Group are providing the business development component of the program. “Israel is the number one country for active angel investments, and the start-ups in this program are the reason why. The companies here have already gone on to substantial successes, and this is only the beginning.”

Among those companies, said Low, was Israeli energy start-up EGM, which has developed a smart meter that not only checks for transmission problems, but also collects data on electrical use, performs load balancing (essential for the smooth flow of power), and regulates the flow of power through the electric grid to ensure maximum stability and efficiency. IBM was so impressed with the technology, said Low, that the company will begin selling it as part of its Smart Grid solutions, a billion dollar-plus business that serves utilities around the world. The EGM system will be included as an offering in the utility management package, a move that will likely propel EGM from a small start-up to one of Israel’ most important energy infrastructure firms.

OptiBus, another graduate, helps make bus service – and bus companies more efficient, by using big data to set bus scheduling. The system does deep analysis and major number-crunching on anything that could potentially affect the bus schedule — traffic, weather, drivers who call in sick, rock concerts that promise lots of passengers on routes, road closures, and much more.

While big-data analysis is not uncommon these days, OptiBus brings to the table extremely fast algorithms, said Optibus CEO Gady Shlasky. “In order to manage something as complicated as a bus transport plan in real time, you have to have a very fast analysis system. All the other big data analysis systems are far too slow for this kind of work.” Optibus is already being used to schedule over three quarters of the bus service in Israel, and the company is set to begin working in several European markets in the coming months, said Low.

IBM hopes – and expects – to repeat that success with the new crop of companies that are joining the second session of the accelerator, which begins in February, said Dror Pearl, head of IBM’s Global Technology Unit (GTU) in Israel, and “father figure” to the accelerator entrepreneurs – who were besides themselves thanking Pearl and his staff for the efforts on their behalf as they made their pitches and presentations at the event.

“We’re celebrating the successes of the companies that are graduating, and the successes of the six companies that are coming in to the second session – all of which have great technology that is going to change the mobile and cloud space,” said Pearl. “We intend to keep up a long-term relationship with all our ‘children,’ and we are positive they will grow to become hugely important businesses.”

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