IBM, Israeli ministry to back open source start-ups

By Reuters
San Francisco, 25 Apr 2005

IBM and the chief scientist of Israel`s Ministry of Industry, Trade and Labour on Friday said they have agreed to a pact to foster development of open-standards technology by Israeli start-ups.

The pact calls for IBM to provide hardware, technology expertise and sales and marketing support, while the Israeli Ministry of Industry, Trade and Labour will supply funding to Israeli start-ups. No financial terms were disclosed.

IBM officials said individual companies might stand to receive government grants of up to $100 000 or more. IBM is the biggest, but not the exclusive, technology vendor taking part in the Israeli industrial research and development programme.

IBM is the world`s largest computer company. In recent years it has sought to pick up the pace of its partnerships with hundreds of software companies as well as venture capitalists and start-up firms to increase the level of innovation in its own mix of hardware, software and services.

"It is not money [that] we are providing," said Meir Nissensohn, IBM Israel GM. "We are providing access to technology, experts, [research] centres and access to global markets." IBM seeks to combine such innovations into its own broader lines of hardware and software, he added.

Israel is home to 4 000 technology companies, second only to California`s Silicon Valley in its concentration of technological innovation.

IBM is working with more than 700 software vendors in Israel, and has active marketing or sales relationships with 150 firms, the company said.

Israeli companies that Armonk, New York-based IBM is already working with include start-ups like Actimize, CashU and ItemField, along with established companies such as Nice Systems and Retalix.

Gabriel Tal, an executive with an arm of IBM`s sales and distribution in Israel, is looking to support software developers in the area of computer security systems and storage management, for example.

The goal of the agreement is to help accelerate the adoption of open standards in Israel, while at the same time helping Israeli start-ups expand in Israel and globally.

Open standards is an approach to technology development in which inventors make the underlying programming code publicly available for other developers to build on and extend. It contrasts with the proprietary, or closed development approach most major technology companies, led by Microsoft, have used to maximise their control over products they build.

IBM, the world`s second largest software vendor behind Microsoft, has sought to promote technology based on open standards as a way to compete with Microsoft.

IBM and the ministry`s chief scientist, Dr Eli Opper, plan to jointly select independent software vendors working in emerging technology areas in which IBM specialises such as radio-frequency identification, pervasive computing "grids" and Linux, the leading open source software alternative.

In a related push, IBM is working with 40 venture capital firms in Israel, including early stage funders Israel Seed Partners, with 40 portfolio companies, and Genesis Partners, with more than 20 portfolio companies, to identify start-ups that fit into IBM`s business strategy.