IBM pursues smart location for national technology clients
No stranger to innovation, software development icon IBM is committed to staying at the forefront of growing technologies. In September 2011, IBM sought new opportunities to serve its major domestic clients.
With the growing demand for software development, application management services and related public and financial regulatory services, as well as the use of mobile accessibility and cloud computing, IBM needed to identify a location for a new technology center capable of meeting the demand for these data-intensive applications. To support such an operation, the company sought a partnership with nearby academic institutions to support research opportunities and develop a potential pool of talent.
As the company began the site selection process for its new center, Louisiana emerged as one of more than a dozen potential locations. With targeted incentives that included a best-in-the-nation incentive for software development, Louisiana was emerging as a technology hub by 2012. The state landed major projects for such sector leaders as EA, CenturyLink, Gameloft and GE and was poised for continued growth. IBM viewed Louisiana’s business climate favorably, but company executives required a pipeline of qualified talent to support their new development.
Public-private partnerships address IBM’s unique needs
As Louisiana’s capital, Baton Rouge possessed critical components of IBM’s project needs, including higher education resources, workforce assets and a revitalized downtown. Baton Rouge emerged as a leading candidate, and LED assembled a team of project partners to support a new software technology center and identify solutions to fulfill the company’s objectives.
The strength of this partnership was critical for the success of the project. LED collaborated with Baton Rouge’s consolidated city-parish government, the Baton Rouge Area Foundation, the Baton Rouge Area Chamber and Louisiana State University to make the best case for Louisiana and compile solutions to address IBM’s workforce needs.
All partners were aligned to support IBM’s investment. The comprehensive incentive proposal developed by these partners addressed the company’s long-term needs and also created a presence in downtown Baton Rouge.
“There were a couple of factors in why we chose Baton Rouge. First is, we have some history with…LSU, we’ve hired a number of graduates from the university so we’ve had some experience in terms of the quality of the skill and the capability that’s here,” said Christine Alford, COO IBM Global Consulting Services. “And the second factor is…the very strong partnership that we’ve developed with IBM, the state and the academic institutions, which is just tremendous.”
“Our innovative collaboration with Louisiana is providing us with the talent and support to deliver world-class solutions for our clients.”
To address IBM’s desire to collaborate with higher education campuses, the State of Louisiana will provide $14 million over 10 years. These funds will go toward growing computer science departments and boosting the number of annual computer science graduates. At least 65 percent of those funds will go to LSU’s School of Electrical Engineering and Computer Science, with the university planning to double its computer science faculty and triple the number of annual computer science graduates in five years. The higher education enhancements will support the LSU computer science program’s ascent to the top 10 to 15 in the country in terms of graduates and while facilitating IBM’s hiring needs in the future.
“This public-private partnership with LED, IBM and LSU is a powerful example of the triangulation between industry, government and academia that elevates the state’s role as a national leader in economic development,” said LSU College of Engineering Dean Richard Koubek. “LSU’s College of Engineering is committed to developing a mutually beneficial partnership with IBM and LED that stimulates economic growth and helps to meet the workforce development needs of the state.”
In addition to long-term workforce solutions, LED offered the company a $17 million grant to reimburse relocation, recruitment and internal training costs; a $5.5 million incentive equivalent to the state’s Quality Jobs program for a portion of the IBM center’s employment over 10 years; a $5 million grant to offset facility operating costs over 10 years; and the recruitment, screening and training services of LED FastStart®.
LED offered a $30.5 million performance-based grant consisting of state, local and federal funding to build an eight-floor office building as part of a new, mixed-use urban development on Baton Rouge’s riverfront. In addition to new Class A office space and 600 dedicated parking spaces, the development would include an 11-floor residential tower and a private recreational terrace joining the buildings above a multilevel parking garage. Leveraging resources of the Baton Rouge Area Foundation, Louisiana secured BRAF’s commitment to build and manage the $55 million total project through its affiliates, the Wilbur Marvin Foundation and Commercial Properties Realty Trust.
IBM officials announce major investment in Baton Rouge
With strategic partnerships and funding in place, IBM found the right business environment and comprehensive project solutions the company needed in Louisiana. The company committed to creating more than 100 new jobs by mid-2014 and growing to 800 jobs by 2016, a year after occupying its new office building in downtown Baton Rouge. The IBM Technology Center: Baton Rouge will not only develop and maintain enterprise software for major U.S. corporate customers, but spur new economic activity in downtown Baton Rouge as well. The partnership with LSU will continue to evolve, as IBM works with the university to develop its computer science program and other technology curriculum. IBM will also identify opportunities to partner with the computer science programs at additional universities throughout the state.
“Our clients have asked us to deliver business solutions, to be able to deliver the innovation that’s necessary and to have the talent to deliver that for them. We are confident Louisiana, particularly Baton Rouge, particularly LSU is going to be able to help us, in a partnership, develop that talent and have those employees that join our consortium, our IBM company, stay in Louisiana and do work on behalf of clients all around the United States and, frankly, on the global stage.”
As new facility is built, Louisiana workforce shines
At the official groundbreaking ceremony in September 2013, Arnold announced that IBM surpassed the 100-employee milestone, beating the target by eight months. A year later, as construction crews completed the top of the IBM Technology Center in downtown Baton Rouge, the company announced that its total number of employees at a temporary location in Baton Rouge exceeded 200 professionals.
In May 2015, the company moved into the new downtown office and expects to reach 800 employees by the end of 2016.
“These employees are working on some of the most complex projects. This was all done in a temporary location. Imagine what will happen after…we have a beautiful site in Louisiana,” Arnold said. “There is no reason that those (employee totals) wouldn’t just grow and grow and grow. I don’t know why we didn’t start earlier.”
The customized partnership with IBM and LSU is also producing results. LSU’s Computer Science enrollment has doubled since 2012 to further meet the state’s growing IT workforce demands. To support the increasing enrollment, the Computer Science program hired two new faculty members and opened searches to hire additional faculty by the start of the 2015 fall semester. IBM and LSU have also partnered to launch two new study concentrations: Data Analytics and Cloud Computing.
IBM expands Louisiana operations to Monroe
Only two months after the topping-off ceremony for the Baton Rouge technology center, Colleen Arnold again joined with state and local leaders, as well as CenturyLink CEO and President Glen Post, to announce that IBM would establish a new 400-job Application Development and Innovation Center in Monroe, Louisiana.
The rapid adoption of mobile and social technologies in recent years is changing the way customers and companies interact with one another, leading to major changes to business processes and applications. IBM plans for its new center in Monroe to provide clients with services that address the increasing demand for flexible software services to keep up with big data, cloud computing and the new requirements for mobile accessibility.
In addition to the services it will provide clients, the IBM center in Monroe will anchor a new 88-acre, mixed-use development that will include a complementary mix of residential, commercial and recreational uses. The site is located directly across from the corporate headquarters for CenturyLink, and IBM and CenturyLink will partner on research, development and product innovation initiatives.
Building off the success of the public-private partnership that led to the creation of IBM’s technology center in Baton Rouge, the state again worked with higher education institutions to support computer science programs in the state and strengthen the pipeline of talent in Louisiana. As part of the Monroe project, Louisiana is providing $4.5 million in funding over 10 years to expand higher-education programs designed to increase the number of annual computer science graduates. With this support, the University of Louisiana at Monroe will expand its computer science and computer information systems programs, while Louisiana Tech University and Grambling State University will expand their technology programs in related areas, such as cyber engineering and data analytics.
“We’re proud to be part of this innovative public-private partnership with the State of Louisiana and CenturyLink to further develop highly valued skills and solutions expertise in security, analytics and mobility applications,” Arnold said. “Louisiana is the right place for high-tech job growth with an exceptional education system, business environment and workforce to serve the needs of our clients.”
To support IBM’s continued investment in Louisiana, the state is providing $12 million for the construction of a new mixed-use office complex, which will be owned by University of Louisiana at Monroe foundation and leased to IBM, which will serve as an anchor tenant for the facility. Additionally, the state provided a customized package that included $7.7 million in grants to reimburse relocation, recruitment, training and operating costs for the Monroe center. IBM will receive the services of LED FastStart for the Monroe center and use of the state’s Quality Jobs program.