Sixty-five years after IBM Corp. first came to the Boulder Valley with the purchase of 640 acres east of Boulder Reservoir — eventually constructing a plant that employed up to 5,000 workers — Big Blue’s presence here has dwindled to represent a tiny fraction of its former self.
Exact employee counts are unavailable — IBM will not release local employment numbers — but the company now is believed to occupy only a small part of the sprawling, 2.5-million-square-foot campus, with operations that include “a cross section of IBM technology (software, sales), consulting (services), marketing and finance personnel,” according to Carrie Bendzsa, U.S. Markets and Regional Communications Manager, IBM Americas.
It’s a far cry from the company’s once-dominant role in the emergence of Boulder and Longmont as technology and manufacturing hubs.
Back in 1957, when the land was purchased, it would have been hard to anticipate the impact that the multinational company would have on the growth and development of nearby communities and the regional economy.
But a series of corporate spinoffs have carved away IBM’s operations, including its latest offspring, Kyndryl Inc., its managed infrastructure services business, which it spun off in November 2021.
Kyndryl now owns the plant at 6300 Diagonal Highway, with IBM and other companies as tenants, along with a sea of largely empty parking lots.
Boulder in 1957 was just beginning its evolution into the innovation- and technology-focused community that exists today.
“In the 1950s, Boulder was booming and fast becoming a center for cutting-edge science with the National Bureau of Standards’ Central Radio Propagation Laboratory, Beech Aircraft’s Aerospace division, and Ball Brothers Research all locating in Boulder,” historian Carol Taylor wrote in a Daily Camera column published in January. Other scientific organizations, including IBM, soon followed, she wrote.
IBM purchased the 640-acre plot of land five miles northeast of Boulder as part of a national facilities expansion. At that time, IBM was identifying sites across the country that matched a specific profile, explained Pete Lorenzen, a long-time IBM employee who is now Colorado senior executive for Kyndryl. Boulder, Albuquerque and Tucson were all targeted for major IBM facilities at that time.
“They picked towns that had a major university so they would have access to talent,” Lorenzen said. “Their No. 2 consideration was transportation, so they could ship in materials and ship out products. Boulder had a rail spur coming through there and a reasonably good road setup. Third, they looked for favorable tax treatment.”
IBM broke ground on its Boulder property in June of 1965, and the first employees arrived at the site that November. Some 1,000 employees were hired initially to design and manufacture tape drives, devices that stored computer data on magnetic tape. Business was brisk, and 3,000 more employees were added in just three years, Lorenzen said. Construction on the campus continued throughout the 1970s, until there were 24 buildings encompassing 2.2 million square feet of office, manufacturing, and warehousing space.
Through the 1980s, the site grew to more than 5,000 employees, whose primary focuses were manufacturing hardware, developing software products and multiple global functions such as software distribution.
That ongoing growth of IBM helped transform the regional economy. Well-educated workers flocked to the area for the high-paying high-tech jobs being offered by IBM, said Erik Mason, curator of history at the Museum of Longmont. The burgeoning availability of highly educated workers attracted other storage-related companies to set up operations in the area. These companies designed and manufactured hardware devices that could hold and store digital information for use in ongoing or future business operations.
That increase in attractive jobs helped fuel tremendous population growth. Federal census figures show that in one decade — 1960 to 1970 — Boulder’s population increased by 89%, while Longmont’s population more than doubled.
Longmont was an especially attractive location for IBM employees to find a home because it had affordable housing and the infrastructure to support an influx of new residents, said Leona Stoecker, who was mayor of Longmont from 1993 to 2001.
The ongoing growth of IBM “was a milestone not just for Boulder’s economy but also our regional economy, which is characteristic of so many of the high-tech investors in our community,” said John Tayer, president and CEO of the Boulder Chamber. “I often note that both Boulder and Longmont talk about the enormous impact that the IBM development had on their communities. In particular, when you think about such a large technology business moving to town, that brings jobs, brings a boon to our sales tax base, and all of that is valuable from an economic vitality standpoint.”
IBM also seeded the entrepreneurial culture that is still a major driver of growth for the Boulder Valley economy.
In 1969, four IBM engineers left that company to start Storage Technology Corp., or StorageTek, which by the mid-1970s became the dominant storage company in the region, according to a 2004 article in Computerworld magazine. A 1998 article in the Boulder County Business Report, a forerunner of BizWest, said that by 1981, “StorageTek occupied a half-million square feet of what grew to 2 million square feet at the Louisville campus, employed 13,000 people worldwide, and had revenues of $603 million.”
Multiple other successful startup ventures grew out of StorageTek, including Exabyte Corp., Aspen Peripherals, and McData Corp. The arrival of IBM really started that momentum, Tayer said.
When IBM decided to begin producing a next generation of chrome-based storage tape, that business was shifted to Tucson in 1977. That decision may have done as much as IBM’s arrival to spur the growth of storage startups. Many IBM employees decided not to move to Arizona and took their talents and experience to the new ventures that were developing.
“When you bring a large technology company like IBM to town, ultimately it leads to a great deal of spinoff and startup activity as that high-tech workforce starts to consider what entrepreneurial ventures they want to pursue with the knowledge and expertise that they have developed,” Tayer said. “The legacy of all those businesses that were spawned has been tremendous.”
The collective success of IBM and these other storage companies transformed the regional economy, making the Denver-Boulder area the national leader in tape storage, said a 1999 article in the Denver Business Journal.
“Boulder County became a storage hub for the entire United States,” Lorenzen said.
In the early 1990s, IBM shifted focus, and the Boulder campus became a major center for providing IT services such as server support, network management, IT help centers and operating mainframe computers.
IBM regularly reviews all the operations in its portfolio to determine which deserve continued or expanded investment, and which should be closed or spun off, Lorenzen said. In 1991, the division making low-end printers was spun off to form Lexmark, which continues to manufacture printer supplies locally as a tenant at the Boulder site, employing 130 workers. Hardware development on the Boulder site by IBM employees ended in 2007, when the division manufacturing high-end printers was spun off as Ricoh. Ricoh also continues to operate at the Boulder site as a tenant.
In 2013, the division providing help desk services was sold to Concentrix, and those employees left the Boulder site in 2017.
In November of last year, IBM spun off its managed infrastructure services business into Kyndryl, which now owns the Boulder campus. Kyndryl is the world’s largest provider of IT services such as application migration to the cloud, cyber security and 5G and network modernization, Lorenzen said.
Kyndryl operations take up about 75% of the campus, with the remainder split between IBM, Lexmark and Ricoh. Current IBM operations include the world’s largest data center — a $350 million project added in 2009 — and a business continuity center providing backup services to a wide range of clients, Lorenzen said.
“This site is used as a business continuity location because we have incredible reliability in terms of power and weather,” Lorenzen said. “We don’t have earthquakes or tornadoes or floods. This area is incredibly safe.”
IBM tried to be a good corporate citizen, Lorenzen said. As an example, he pointed to the campus’s large Tom Watson Park, once a private recreation area for IBM employees, which was leased to Boulder in 2009, making the expansive facility’s soccer and baseball fields available to the public and further expanding the trail system in the area, Lorenzen said.
The last major construction project on the campus was a 10-megawatt solar array completed in 2019, the largest such facility in Boulder County and the largest array at any IBM facility on the planet, Lorenzen said. That project is an example of IBM’s “alignment with the city of Boulder,” Lorenzen said. “When it comes to things like environmental policy, we’ve been so far ahead of other businesses for years.”
The legacy of IBM’s move to the Boulder Valley ended up being much broader than the company’s economic impact. The diverse group of IBM employees who became residents of Longmont included many individuals who positively impacted the city by becoming active volunteers in community organizations and on city government committees, Mason said.
“You can’t talk about IBM without recognizing the character of the workforce they brought to town,” Tayer said. “These folks would become leaders, driving not just economics, but changing the character of our communities. I recognize that the tech industry brought a great deal of diversity to our community, which is something that we welcomed.”
