IBM Misses on Initial Expectations with Buffalo Tech Hub, but Picture Not So Bleak

When the state invested $55 million to build an innovation hub in Buffalo backed by IBM, hopes were high for a boost to the region’s tech sector. However, the reality has fallen short, with the planned technology hub now unlikely to fully come to fruition. While IBM will continue to have operations in a small portion of the space, the company will occupy just one floor instead of the originally anticipated seven. The remaining floors have been sold to Odoo, a Belgian-based business software company, in a deal that requires them to create 350 new positions in five years.

Unmet Expectations

The state had initially acquired the space in 2015 with the intention of creating a high-paying tech hub, but IBM’s computer information technology center has been unable to meet those expectations. Instead of the highly skilled and higher-paying jobs in programming and software development that were envisioned, the center has focused on call center operations providing technical assistance. This has been a disappointment for the state, which has been attempting to lease out the remaining floors since 2020.

As a result, IBM’s footprint in the building will become significantly smaller, with the company leasing just 15% of the total space compared to the original plans for over 40%. They will be paying $404,028 annually in the first year of the lease, with an increase to $416,148 in the second year, along with utilities. According to Jason Conwall from NY CREATES, the state agency overseeing the property, “the program has ended, and the amount of space they are leasing has been reduced.”

A Different Direction

IBM, however, maintains that it is still providing the higher-end, higher-paying positions that were initially promised. Last year, the company’s Buffalo office transitioned to a Client Innovation Center, focusing on data, analytics, and cloud consulting. While the office is now smaller, it is catering to a more specialized and skilled workforce. IBM claims to be committed to Western New York and looks forward to its future in Buffalo.

Despite falling short of the initial target of creating 500 jobs within five years, IBM reached over 200 jobs in 2018. Unfortunately, they experienced significant job losses at the software development hub in 2021. However, it was expected that the growth would be gradual, and IBM still remains a significant presence in Buffalo.

Related Facts

• The state invested $55 million in building an innovation hub in Buffalo backed by IBM.
• IBM will occupy just one floor instead of the originally anticipated seven.
• The remaining floors have been sold to Odoo, a Belgian-based business software company.
• Odoo is required to create 350 new positions in five years as part of the deal.
• IBM’s Buffalo office transitioned to a Client Innovation Center, focusing on data, analytics, and cloud consulting.
• IBM fell short of the initial target of creating 500 jobs within five years.
• The company experienced significant job losses at the software development hub in 2021.

Key Takeaway

While IBM’s tech hub in Buffalo may not have met its initial expectations, the situation is not all bleak. The company continues to invest in Buffalo, albeit on a smaller scale, and is providing higher-paying positions in specialized fields such as data and analytics. The transition to a Client Innovation Center reflects the evolving needs of the tech industry and may bring valuable opportunities to the region.

Conclusion

Although the IBM-led technology hub in Buffalo did not realize its full potential, it is important to acknowledge the efforts made and the progress achieved. While the expectations may not have been fully met, the presence of IBM and its focus on high-skilled positions in data and analytics is an encouraging sign for the region. As Buffalo’s tech sector continues to grow, there is still a chance for the city to establish itself as a hub for innovation and attract more tech companies in the future.