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IBM, the 105 year-old computing giant known for its cloud computing services, Watson analytics platform, and a decision to sell its iconic personal computing division to Lenovo in 2005 – officially opened a startup incubator in the heart of downtown Toronto today.

The newly-launched IBM Innovation Space will be dedicated to helping tech startups take advantage of IBM’s wide range of technology, legal advice, and marketing expertise as they step into the global marketplace.

As IBM Canada president Dino Trevisani was quick to point out during the space’s Sept. 21 dedication, the company has not yet funded a similar space anywhere else in the world.

“This idea was born out of articles I read in the Globe and Mail when I got to Canada about how we’ve got a problem with creating companies that want to stay here,” he said. “The missing part was the private sector… We had to play a role.”

IBM Canada president Dino Trevisani was happy to emphasize the unique nature of the IBM Innovation Space during its Sept. 21 dedication in downtown Toronto.
IBM Canada president Dino Trevisani was happy to emphasize the unique nature of the IBM Innovation Space during its Sept. 21 dedication in downtown Toronto.

The space is the result of a partnership between IBM Corp., which invested $24.75 million into the incubator, and the Ontario government, which invested $22.75 million grant from its Jobs and Prosperity fund. Other partners include the Ontario Centres of Excellence; the Southern Ontario Smart Computing Innovation Platform (SOSCIP) Research Consortium, a group that includes 15 colleges and universities including the University of Toronto, University of Waterloo, and Ryerson; and members of the Ontario Network of Entrepreneurs (ONE).

Though Trevisani expects other IBM divisions to launch similar initiatives in the future, he says Ontario was an ideal starting point because of the unique relationship between the province’s government, postsecondary institutions, and private sector.

A “selfish” act

IBM Canada senior innovation executive Allen Lalonde says that his company founding an incubator is ultimately a "selfish" act.
IBM Canada senior innovation executive Allen Lalonde says that his company founding an incubator is ultimately a “selfish” act.

The incubator’s roots can be traced back back to 2012, when IBM teamed up with the Ontario government, Ontario Centres of Excellence, and several of the province’s postsecondary institutions to create SOSCIP, an initiative that seeks to drive innovation in the province by removing barriers to conducting business.

“I’d love to tell you this was a new, wonderful idea, but the truth is it was an evolution,” Allen Lalonde, a senior executive of innovation at IBM Canada’s Research & Development Centre, tells ITBusiness.ca. “IBM has been in business for 105 years, and we’re a company built on innovation – we want to work with entrepreneurs, to learn from innovators in the marketplace, to accelerate our own research, to identify new markets, because big multinationals like IBM grow when new markets grow.”

“By working with the people who are changing the world and creating new markets, we’re establishing ourselves at the centre of whatever comes next,” he continues. “Selfishly, bridging the innovation gap is as much the smart thing to do as it is the right thing to do.”

As with SOSCIP, IBM is directing its incubator resources to “priority focus” areas such as health care, water, energy, infrastructure, and advanced computing – sectors where Canada has both a need and ideal opportunity to become a game-changing world leader.

And just as SOSCIP has been an enormous success – since its launch, Lalonde estimates that it’s helped create 50 projects and 40 companies, generated $2 billion in revenue, and will save Ontario $2 billion in healthcare costs – the company has high hopes for the incubator.

But the needs are different, Lalonde admits: Startups need a different type of support from government and academic projects. They require access to disruptive technology and must develop projects with an eye on commercialization opportunities, and it was discussing these circumstances with the Ontario government and the OCE that led to the incubator’s development, and ultimately today’s public launch.

Startup base already singing IBM’s praise

Tellingly, while the project was only publicly unveiled today, its initial startup base has been collaborating with IBM for nearly a year on a range of projects, from a support tool for veterinarians to a new two-step security software for businesses.

Orenda founder and CEO Tanya Collier MacDonald is thrilled to be working with IBM; she had been stalking the company since last year.
Orenda founder and CEO Tanya Collier MacDonald is thrilled to be working with IBM, having been “stalking” the company since last year.

Orenda Solutions founder and CEO Tanya Collier MacDonald says she began stalking IBM last year, flying from her native Nova Scotia to the Canadian arm’s Markham, Ont. head office to pitch her idea for a Watson-powered intelligent software solution that tracks a company’s reputation by analyzing online discussions about its activities.

“Watson is known as a leader in the field of cognitive thinking and artificial intelligence, and we wanted to align ourselves with a giant,” she says. “Fortunately, they pulled us into their innovation space and introduced us to the Watson ecosystem right away.”

Big Terminal director of business development and operations Nick Dyment says that access to IBM's cloud tools has been especially helpful for his company.
Big Terminal director of business development and operations Nick Dyment says that access to IBM’s cloud tools has been especially helpful for his company.

Nick Dyment, the director of business development and operations for Toronto-based Big Terminal, which is developing a Watson-powered search engine for the financial services industry, says that having access to IBM’s cloud services has been a particularly welcome boon for his company.

“Because we’re working with so much big data, if we had tried to buy the computers we’re using we would have been bankrupt in the first month,” says Dyment, whose platform analyzes global financial data and presents it in a simple, user-defined way. “Being able to use IBM Cloud has helped us scale as we grow while keeping our costs low, which is really great.”

Equally useful is the networking opportunities, McDonald and Dyment both note.

“IBM has a lot of financial clients across the spectrum, and these guys have been super supportive by getting us introductions to people, leading us to different businesses, helping figure out where gaps are in the market,” he says. “These people are great.”



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