Q1 Labs Exit Still Paying Dividends
April 25th, 2017
If any exit can demonstrate how the economy benefits when a young company is bought by a larger company, it was IBM’s purchase of Q1 Labs of Fredericton in early 2012.
That purchase, reportedly worth more than $600 million, did more than just reward investors and staff at the cybersecurity company. It has led to hundreds of jobs in cybersecurity R&D in the New Brunswick capital, and made New Brunswick a genuine leader in research in cybersecurity, one of hottest segments of the IT world.
When the deal was announced in October 2011, Q1 Labs was officially headquartered in Waltham, Mass. But its 200 employees included a massive development team in Fredericton, where the company had started a decade earlier. What has been under-appreciated in Atlantic Canada is that IBM has invested heavily in its cybersecurity team in Fredericton, doubling its staff there, and Sandy Bird, the Q1 Labs Chief Technology Officer, is now the CTO for IBM’s global cybersecurity unit. From his base in Fredericton, he oversees 20 major R&D labs around the world.
“Cybersecurity over the last 15 years has gone through several cycles,” Bird said in an interview last week. “At the time of the acquisition, we were just entering this era of the cybersecurity world having an impact in the physical world. . . . All of a sudden, the rest of the world woke up to the impact of these of financial crimes. Big organizations were becoming the target for criminals.”
Bird said that since then there have been several waves of new threats entering the cybersphere, and cybersecurity professionals coming up with solutions. IBM’s QRadar platform — the heir of the Q1 Labs’ product — is a platform that allows the user to integrate more than 200 cybersecurity tools on a single interface. Five years after IBM closed the Q1 deal, QRadar still rates among the best in the world in Gartner’s assessment of the security field.
“You always reinvent yourself in security every few years, and one of the things we were really good at at Q1 Labs was keeping abreast of what was happening,” Bird said.
IBM’s growth in the Fredericton area has underpinned the provincial government’s efforts to make New Brunswick a centre of excellence in cybersecurity. Big Blue became the first research partner at the Canadian Institute for Cybersecurity, which opened earlier this year at University of New Brunswick with more than $4.5 million in funding. Fredericton-based Bulletproof opened a Security Operation Centre in February, immediately leading to the creation of 15 jobs. Other New Brunswick startups specializing in cybersecurity are coming along, such as Fredericton-based Sentrant Security Inc. and Saint John-based EhEye.
Not many people in the region realize there are Q1 Labs veterans who now sit on global cybersecurity standards boards, determining the standards for crime prevention around the world, Bird said.
He said the next phase of growth in the field will be to ensure the region can continue to train people to work in cybersecurity, starting with curricula at schools, colleges and universities. There are estimates there will be a global shortfall of 1.5 million cybersecurity professionals by 2019, which presents a huge opportunity for New Brunswick. Bird said the skills should be multi-disciplinary, like bringing in psychologists who can understand the thinking of cyber-criminals.
“There’s a huge, massive shortfall in cybersecurity skills in the workforce today,” he said. “We just need to grow more cybersecurity skill. We should be driving our world-class leadership and doing research that is relevant in the rest of the world.”