IBM Pursues Smart Location For Serving Major National 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 regulator 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 Capital, 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 Partnership Addresses 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 project partnership to support a new software 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.”
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 facilitate 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.”
Riverfront Office Development And State Incentives Complete IBM’s Custom Solutions
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. The Baton Rouge Area Foundation committed 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 the end of 2013 and growing to 800 jobs by 2016, a year after occupying its new office building in downtown Baton Rouge. IBM’s new technology center 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. 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,” said Colleen Arnold, IBM senior vice president for application management services. “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.”