Case Studies

Unique partnership with state universities drives creation of IBM Services Center in downtown Baton Rouge


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 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 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 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 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 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 curriculm. 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."

Louisiana workforce shines in advance of IBM groundbreaking

At the official groundbreaking ceremony in September 2013, Arnold announced that IBM had already surpassed the 100-employee milestone, beating their estimate by eight months.

“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.

The customized partnership with IBM and LSU is also producing results. The number of first-year computer science students at the university has jumped 55 percent in the fall semester. Additionally, the engineering department has formed a search committee for new members of the computer science facility. IBM and LSU are partnering to craft a computer science curriculum to meet the demands and goals of IBM and its clients.

Louisiana’s dedicated workforce is also driving IBM’s new efforts, as 60 percent of the 100-plus recently hired employees are graduates from Louisiana universities: LSU, Southern University, Northwestern State University, the University of Louisiana at Lafayette and Southeastern Louisiana University.

“There is no reason that those wouldn’t just grow and grow and grow,” said Arnold, referring to the expected 800 employees. “From what I’ve seen, from the 100 that are here, I don’t know why we didn’t start earlier.”

Related Incentive

LED FastStart®

Provides workforce recruitment, screening and training to new and expanding Louisiana companies at no cost.

Key Industry

Software Development

Software companies are taking notice of Louisiana courtesy of the strongest incentives in the U.S.

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