Cybersecurity Firm Iboss Moves HQ to Boston, Says Not Abandoning San Diego
[Updated 5/17/17, 4:53 pm. See below.] Iboss, a San Diego-based cybersecurity firm that opened a small satellite office in Boston last year, has expanded its presence in Massachusetts and decided to designate the local outpost as its corporate headquarters.
Iboss held an event Wednesday to announce that it’s moving into a new 20,000-square-foot space in downtown Boston and naming it the company’s head office. Massachusetts Gov. Charlie Baker was scheduled to attend the event and tout the growth of the state’s cybersecurity cluster and companies like iboss. The company has grown to about 100 employees in Boston, with plans to hire at least another 100 people here, co-founder and president Peter Martini tells Xconomy. Iboss currently employs 210 people at offices worldwide, a spokeswoman says.
Martini will remain in San Diego, but iboss CEO and co-founder Paul Martini—Peter Martini’s fraternal twin—is now based in Boston, according to the spokeswoman.
The announcement is a feather in the cap for the Boston-area cybersecurity cluster, which includes at least 60 firms with a local presence, according to an Xconomy analysis in April 2016. Other local players include IBM Security, Carbon Black, and CyberArk. Other cybersecurity firms that were born elsewhere but later established headquarters in the Boston area include Rapid7, CounterTack, and Cybereason.
But Boston’s gain doesn’t spell a loss for San Diego’s tech scene, Peter Martini says. He says iboss will maintain its 45,000-square-foot San Diego office and continue hiring there. The company currently has 45 employees in San Diego, the spokeswoman says. [This paragraph updated with San Diego employee count.]
“We have a big investment there. That’s not going anywhere,” Martini says. “We have no plan to shrink it at all.”
Iboss’s decision to relocate its corporate headquarters is notable because a few years ago, the company considered moving from San Diego to Austin, TX. But it ultimately stayed put, citing Austin’s higher labor costs and more expensive office spaces, combined with the decision by Websense—a competitor then based in San Diego—to move its headquarters to Austin.
Iboss, which provides Web gateway security technology, has become a darling of the San Diego tech community in recent years. Martini and his brother have been featured prominently in economic development studies of the local cybersecurity and software sectors. The pair has also appeared on local TV to tout San Diego’s software scene. Martini serves on the board of the San Diego Regional Economic Development Corporation, and he and his brother both sit on the board of the San Diego Cyber Center of Excellence.
Mark Cafferty, president and CEO of San Diego’s regional economic development group, says his organization learned of iboss’s plans to relocate its headquarters last week, and has been “trying to see if we can fend it off in some way.” Cafferty says the company assured him it will continue growing in San Diego, in part because of great local talent.
Kevin Carroll, executive director of the local industry group Tech San Diego, doesn’t sound concerned. “Look, they’re still going to have a significant presence here,” he says. “When this has happened before, and people are all gloom and doom, that gloom and doom hasn’t played out.”
Martini says iboss initially was focused on hiring engineers at the Boston office, but it has found a strong pool of seasoned sales and marketing professionals who previously helped build cybersecurity and software-as-a-service companies. The company’s Boston hires include a chief revenue officer, vice president of inside sales, and vice president of marketing, Martini says. It’s more difficult to find people in San Diego with senior leadership experience in high-tech sectors outside of life sciences and hardware engineering, he adds.
“San Diego has great talent, great engineers, great everything,” Martini says. “The simple fact is Boston has a more mature senior leadership talent pool than San Diego does.”
Another reason for expanding in Boston and making it iboss’s headquarters is that most of the company’s board members are located on the East Coast, Martini says.
The move also gives the company an outpost closer to Europe, the Middle East, and Africa. “It’s a nice bridge between the global markets,” Martini says.
Martini and his brother founded iboss in 2003 and built the business without any outside funding for the first 12 years. In 2015, it received a $35 million investment from Goldman Sachs.
Martini declined to share iboss’s revenues, but he says the company has been profitable since 2009 and has no debt. The company says its software is used by more than 4,000 businesses and organizations worldwide.
Iboss’s growth has been driven by several trends of the past decade or so, including the rise of cloud-based Web services, the proliferation of smartphones and other mobile devices, and an increasingly distributed workforce.
“What we’re seeing is a trend around how do we provide security that follows the user?” Martini says.
The answer, he says, is cloud-based security software that enables IT and security professionals to more easily monitor data movement, who’s accessing the data, and how they’re accessing it.
Martini says iboss hasn’t spent all of the $35 million Goldman investment, and the company doesn’t plan to raise more outside capital. The goal is to grow the company in a “smart” and “methodical” way, Martini says. “We want to make sure that we can weather any storms,” he adds.
Xconomy editor Bruce V. Bigelow contributed to this report.