IBM looks to Israeli startups for Watson, BlueMix tech boost

Big Blue has opened its first accelerator ever, in Israel, to take advantage of the StartUp Nation's fledgling tech companies.
Written by David Shamah, Contributor

IBM is one of the oldest tech companies in the world, but until Thursday it didn't have what so many other tech multinationals did – an accelerator to develop and integrate new technologies emerging from startups.

Now, though, IBM has the Alpha Zone accelerator, which is already recruiting startups for its first 24-week session, set to begin in July. IBM plans to use the accelerator, which will be located in a suburb of Tel Aviv, to grow technologies in areas like big data, cloud, mobile, security, Internet of Things, and smarter commerce.

And, according to Rick Kaplan, IBM Israel country general manager, the new accelerator could end up playing an important role in IBM's biggest future gambit — the Watson cognitive computing platform. "We've been active in Israel since 1949, and since that time we have developed the Israeli team into a world-class one," he said.

IBM filed about 6,000 patents a year, Kaplan added — more than any other tech company — and the Israel team was the second biggest contributor to that annual number, behind only the US.

Although the main purpose of the event was to announce the accelerator, Watson figured as a major theme. A good portion of the hour event was dedicated to Watson, with Moneshia zu Eltz, managing director of M&A and strategic investments at IBM's Watson Group coming in to make a presentation. Based on her experiences with startups that IBM Israel has put her in touch with, "I can see that Israel is going to be key to our development at Watson," said zu Eltz, as many companies are developing innovative technologies to understand and manipulate data, which will help develop the algorithms that will enable Watson to learn on its own — a radical shift from the programming-based way most companies get their systems to figure out things, she said.

"We are only beginning to explore how algorithms will be able to take big data, analyze it, and come up with something new," zu Eltz said. "Deep natural language processing of the type Watson does is not keyword search."

Watson is not the only technology IBM is looking to Israeli startups for help with. BlueMix, its platform as a service offering, which will allow enterprise to develop, adjust, and administer applications composed from services on its SoftLayer cloud, is another major Big Blue project.

According to Dror Pearl, head of the IBM Israel Global Technology Unit (GTU), which has acted as a sort of accelerator-in-training for the past 13 years by working with startups to some extend, "by 2016 three-quarters of all solutions development will be done in the cloud," so IBM is on the prowl for good cloud tech startups.

"We're also expecting big developments in the mobile space, building on the successes we have had in recent years," Pearl added. Israel, known for its prowess in big data, cloud, and especially mobile, is the right place for IBM to be opening its first accelerator, he said.

IBM waited a long time to open an accelerator, and it plans to do things right. "At 24 weeks, the program is relatively long for an accelerator, but we are concentrating on enterprise applications and technologies, so we need that time for the companies to perfect their products," said Pearl.

The program will include the usual business development and presentation training that startups get at accelerators, but the emphasis will clearly be on tech. "The meat of the program will be the development sprints companies pass through. Companies will go through two weeks of development and a week of testing, and repeat as needed until their product is ready."

The development process, of course, will be mentored by IBM Israel staff, and once the product is ready, companies will be enrolled in IBM's Global Entrepreneur Program, with IBM's salesforce marketing it on behalf of the company, if they so wish. Participants in the program will also be enrolled in IBM's Softlayer Catalyst program, with $24,000 worth of free access to the IBM cloud, said Pearl.

And, IBM, through its business development partner Ziontech Blue (a US-based angel fund that is a heavy investor in Israeli startups), will introduce companies to angels, VCs, and the other monied folks who make the IT world go round.

The program is free, and IBM is not taking a cut of anything — not equity, and not even IP, said Pearl. And while graduates don't have to use IBM's salesforce, the company is betting that they will. "The point of this program is to take new technology and bring it to the world," said Pearl. "We have the resources to open the world to the innovative companies that will be a part of Alpha Zone."

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