IBM Woos Startups With $120,000 of Cloud Credit

Big Blue wants to earn some credibility with young entrepreneurs by giving them free cloud services, business mentorship, and help with making connections.

Jason Verge

November 11, 2014

3 Min Read
IBM Watson HQ in New York City
IBM Watson headquarters in New York CityIBM

IBM has rolled out a program aimed at wooing startups with up to $120,000 worth of credit for its cloud services, mentorship, business connections, and go-to-market assistance. Through Global Entrepreneur Program IBM will connect early-stage businesses into its network of enterprises, consultants, and innovation centers.

IBM competitors in the cloud services space, such as Google, Amazon, and Microsoft, have similar programs. Cloud providers entice startups with cloud credits and access to their ecosystems help in growing their businesses in hopes that some of them will succeed and grow on their platforms. Most startups never reach their first major funding round, let alone become profitable, but these programs play the long game, betting on many, hoping to win a few.

Beyond a future revenue opportunity, customer success stories are also important for providers. Who's on the cloud can be a compelling aspect for potential customers.

IBM's program offers $20,000 more in credit than the recently announced Google program. Microsoft offers up to $60,000 worth of its Azure cloud services, and Amazon Web Services offers up to $15,000 in cloud credit.

Working with startups isn't new for IBM. SoftLayer, the cloud services business it bought in 2013, has a history of working with very early stage startups through various programs.

For IBM as a brand of its own, however, the new effort is yet another attempt to get win some credibility with young tech entrepreneurs. "It gives IBM a reach into the early stage startups," said Joshua Krammes, vice president of community development at SoftLayer. "This gives them some legitimacy in the startup world that they don’t have currently."

Mentorship more important than cloud credits

While cloud credit is the headline, the mentorship piece is key. Teaching entrepreneurs how to run a better business is more important than simply paying the hosting bill.

"[Mentorship] is way more valuable than credits," said Krammes. "It's about sales, business development, and teaching customers how to use SoftLayer."

Ecosystem helps "mitigate the low days"

Another important piece is the opportunity to make connections. Those selected will attend IBM-facilitated networking dinners with venture capitalists, CIO and entrepreneur meet-ups, and other events around the world.

"By providing a global path to the enterprise, this program can help accelerate the rate at which cloud startups can get to market and scale," said Promod Haque, senior managing partner at Norwest Venture Partners.

They'll have access to technical support and consulting through IBM's global network of innovation centers, the new incubator space at its Watson headquarters in New York City, and the future network of Bluemix Garages, first of which the company recently launched in San Francisco. Bluemix is IBM's Platform-as-a-Service built on the open source Cloud Foundry PaaS led by EMC's Pivotal.

"You’ll have high days and low days," said Mark Gorenberg, managing director at Zetta Venture Partners. "The best thing about having an ecosystem is it mitigates the low days.”

Credits are available for the full cloud portfolio, including Bluemix. Participants can also leverage IBM's new partnership with Twitter to capture and analyze social data, Aspera's high-speed data transfer services, and Cloudant's Database-as-a-Service.

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