If you looked at a map of IBM’s local operations and software acquisitions—17 in Massachusetts since 2003, out of a total of 60 worldwide—you might think the company’s headquarters was in Massachusetts, not New York. Between its recently opened Mass Lab in Littleton and Westford, MA (the firm’s biggest software development lab in North America), its research center in Cambridge, and its innovation center in Waltham, IBM certainly has been on the move in New England. And just last week, the company said it is acquiring Waltham-based OpenPages for an undisclosed sum.
So why is Massachusetts such a big deal for Big Blue? And what is the impact of all these local acquisitions on the firm’s growth and business? To get some answers, I spoke with IBM vice president of business development, Mike Loria, who’s now based in Westford after previously working out of Lexington, MA.
Loria is a former Lotus veteran who joined IBM in 2001. He has been part of the firm’s Rational software division, which sells products to software developers, since 2006. He leads the team’s mergers and acquisition strategy, which in recent years has led to IBM’s purchase of security software companies Watchfire and Ounce Labs in Massachusetts, as well as Sweden-based Telelogic, a large business process software firm.
In recent years, IBM has been held up as a model of how to achieve company growth through acquisitions, how to do the tough work of integrating new companies after mergers, and how to formalize that whole process. Loria is in charge of all that for his division, and he has a unique perspective on Big Blue’s acquisition strategy in his own backyard.
Loria says he puts a “four-legged stool” around why Massachusetts is “such a great place” for IBM acquisitions. One reason is the sheer number and quality of universities that produce smart, young developers. “That’s our natural resource,” he says. Two is the presence of a large and active venture capital community to support startups. Three is the proximity to lots of IBM customers, such as financial services firms. “Companies tend to resemble their customers in the area,” he says. And four is IBM’s existing footprint in the area—and the distinguished history of the state’s tech industry. “It’s a software-friendly environment,” he says.
None of those is particularly surprising. Perhaps the last one is most telling: once a big company makes a number of investments in a given geography, it gets more
