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The IDF Builds a Desert Outpost, Tech Firms Follow

The IDF Builds a Desert Outpost, Tech Firms Follow

June 8, 2015

Homeland & Cyber Security, Robotics & High-Tech

— The Wall Street Journal —

“It was natural for us to pick Beer-Sheva because of the ecosystem being formed there by the army, the industry and the [Ben-Gurion] University,” says Shelly Gotman, managing director of Lockheed Martin’s newly registered Israeli unit.

A global tech hub is sprouting in the Israeli desert.

Over the next decade, Israel’s army is moving a large portion of its offices — including those of many of its key technology commands — out of the greater Tel Aviv area and relocating them some 60 miles south, to this city in Israel’s rock-strewn Negev desert. Many of the world’s biggest tech companies are following, eager to stay close to the Israel Defense Forces’ tech-savvy workforce.

EMC Corp., the U.S.-based data storage and cloud computing giant, set up shop in Beer-Sheva’s Advanced Technologies Park (ATP). It was one of the first big firms to open offices in Beer-Sheva, anticipating the long-planned army move.

“The main reason EMC wants to be in Beer-Sheva is for access to talent,” says Maya Hofman Levy, the company’s site manager. “It’s a place the company looked at and thought it would be good to be at [for] the long run, seeing what is being formed here.”

atp-bgu-idf-map-450

This map shows where Beer-Sheva’s Advanced Technologies Park (ATP) is located in relation to BGU and the IDF’s future technology campus.

Neighbors now include Deutsche Telekom AG, Lockheed Martin Corp., Oracle Corp., and  International Business Machines (IBM) Corp. In March, eBay Inc.’s PayPal unit bought cybersecurity startup CyActive Ltd., which is based in Beer-Sheva.

An unfinished pedestrian bridge links the new corporate office park with a nearby train station. Morning shuttles are already operating between the train station and the office park to save workers the 15-minute walk in temperatures that can reach as high as 115 degrees Fahrenheit during the summer.

On the opposite of the tracks sits the campus of Ben-Gurion University of the Negev. The University has teamed up with Deutsche Telekom for more than a decade building up an expertise in cyber security.

The Israeli government will launch by year’s end a new National Cyber Event Readiness Team, which also will be based at the office park. Its aim is to research possible cyber attacks on Israeli organizations and companies and coordinate response.

More than a dozen companies have already established labs and research offices at Beer-Sheva's Advanced Technologies Park.

More than a dozen companies have already established labs and research offices at Beer-Sheva’s Advanced Technologies Park.

The ATP, currently made up of just two dark-glass buildings, is near hilly, desert terrain that once served as an Israeli army orienteering training ground.

Gav-Yam Negev Ltd., the office park’s closely held developer, sees the number of office buildings increasing to between 15 and 20 within a decade.

Currently, around 1,100 people work at the site. Gav-Yam expects that number to grow to 10,000 employees by 2025.

About half of the $5.9 billion budget allotted by the Israeli government for the army’s move will go to building technology and communications infrastructure, including plans for some of the army’s biggest data centers. Many of the international firms opening new offices in Beer-Sheva are hoping to get a piece of that build-out.

“It was natural for us to pick Beer-Sheva because of the ecosystem being formed there by the army, the industry and the University,” says Shelly Gotman, managing director of Lockheed Martin’s newly registered Israeli unit.

Others are setting up offices in the city to stay close to the army’s rank and file. The military plans to move some 20,000 soldiers into several bases, one of which will be a campus of low-slung office buildings and new barracks by 2021. Most of those first arrivals will be serving in Israel’s elite technology, intelligence and communications units, including Unit 8200, the Israeli equivalent of the U.S. National Security Agency.

Israel’s mandatory, two- to three-year conscription means that many of its brightest young minds end up doing stints in those units. Those young men and women are highly sought-after by Israeli and international technology firms. Following army postings, many of them have started their own businesses. For example,  Check Point Software Technologies Ltd.,  Palo Alto Networks Inc.,  and  NICE Systems Ltd.  were founded by veterans of such units.

That pool of experienced talent has been a huge factor in Israel’s startup ecosystem. “Startups are missions, mission after mission,” says Saul Singer, co-author of the 2009 book Start-up Nation, about Israeli innovation.

Keeping that workforce comfortable is a priority, especially when many of the soldiers will be uprooting from Tel Aviv’s lively tech scene.

“We need to be able to supply them with a quality of life worthwhile for them to relocate,” says Col. Miri Maoz, who commands the administrative unit managing the transition for the Israeli intelligence corps. “In terms of size it would be like relocating a town.”

Amid the army’s move, the city’s name is getting something of an upgrade. Employees in the new office park have started replacing the city’s biblical name, which goes back to stories about Abraham and Isaac, with the sleeker “B7.” The Hebrew word sheva means seven.

“It’s better for branding,” says Doron Davidson, chief executive of SecBI Ltd., a cyber security startup working in a startup incubator based in the ATP.