IBM acquires Fredericton tech firm

OCT 5- Another New Brunswick technology startup has been acquired through a lucrative deal by a huge multinational firm, signaling the building momentum and growing reputation of the province's knowledge sector.

Q1 Labs, a firm that started as University of New Brunswick student's work project, was acquired by IBM on Tuesday. Details of the deal weren't released.

Q1 Labs joins Radian6 as the second blockbuster deal involving one of the province's tech startups.

Radian6 was sold to Salesforce.com in March for $276 million plus $50 million in stock.

Q1 Labs has two research and development offices in New Brunswick, one in Fredericton and the other in Saint John, as well as one in Ireland.

Q1 Labs CEO Brendan Hannigan, who will head up the newly formed IBM security systems division, said his firm caught IBM's eye because of the hard work done in New Brunswick.

"That engineering team has had to compete with leading Silicon Valley companies that have come out of California," Hannigan said.

"That was done on the back of that engineering group in Canada."

Q1 Labs started as a project Chris Newton took on while working for the University of New Brunswick during his

studies.

He helped manage the school's network and worked in his spare time to design a system that could identify, record and trace down attacks against the network.

The work grew into a startup company, attracted investors and eventually led to the firm's headquarters moving to Boston.

Q1 Labs now has more than 1,700 customers worldwide, including health-care providers, energy firms, retail organizations,

utility companies, financial institutions, government agencies and educational

institutions.

"If you look at the skills that they have in Fredericton, they're world-class," said Robert LeBlanc, senior vice president of IBM Middleware Software.

He said historically, when IBM moves into a new company or sector, it's the beginning of something new."When we acquire, also we invest, and we increase the investment in strategic areas, and we're going to continue that investment," LeBlanc said.

"If you believe that they've got the skills, there's an opportunity to grow all the teams in all of the facilities around Q1 Labs and IBM."

Brian Flood, one of the first to invest in Q1 Labs, said the deal puts New Brunswick on the map.

"To use a baseball analogy, we crushed it out of the park," Flood said. "Hats off to the team." The firm's

success was a team effort, he said, that will benefit New Brunswick.

"It's a terrific day for New Brunswick," Flood said. IBM said the security systems division will target the growing security software and services market, which it estimates to be worth $94

billion.

The Q1 Labs deal comes amid concerns over cyber-security in the wake of high-profile cyber attacks on

targets ranging from Sony Corp. to the International Monetary

Fund.

In five years, IBM has spent more than $14 billion on 25 deals focused on analytics to help its customers deal with the huge volumes of unstructured data from sources such as social media, biometrics and

criminal databases.

Last month, the company acquired Toronto-based

risk analytics software firm Algorithmics for $387 million in

cash.

Recently, IBM has moved away from personal

computing, instead focusing on

services.

Last week, it briefly surpassed Microsoft to become the world's second-most valuable technology company, with a

market capitalization of $214 billion.

Both still trail Apple, though, whose value has soared to $345 billion on the back of massive demand for iPhones, iPads and Mac computers.

http://www.niuzer.com/Business/IBM-acquires-Fredericton-tech-firm-7535085.html