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Expanding through acquisitions, IBM builds a software cluster in the Bay State

The companies in the Globe National 25 may call someplace else home, but they do a lot of business in Massachusetts.

IBM Corp. of Armonk, New York, and Hewlett-Packard Co. of Palo Alto, California, two tech titans that for several years have ranked among the state's 100 top private employers, took star turns last year. IBM was the top-performing company in the Globe National 25, while Hewlett-Packard zoomed up the list to seventh.

Two familiar names also popped up on the list for the first time. Starbucks Corp. of Seattle and Kohl's Corp. of Menomonee Falls, Wisconsin, moved into the ranks of the state's top employers and settled in next to each other in the middle of the group.

The Globe National 25 ranks the top-performing national companies with big operations here the same way the Globe 100 does locally based businesses. Of the state's top 100 employers, roughly a third are located outside the state.

Nearly all the nation's technology giants have outposts in the Boston area, a high-tech research center and home to financial services companies that depend heavily on computing power.

Of the state's 4,850 IBM employees, more than two-thirds work in software development, with the rest in global sales and services.

IBM's operations in Cambridge, Lexington, Westford, and Marlborough together represent its largest software cluster in the world, responsible for collaboration tools, Lotus Notes updates, and earlier this year, a new suite of "social software" for businesses drawing on social networking technologies such as blogs and wikis.

"We see Boston as an innovation hotbed," says Mike Rhodin , general manager of Lotus software and IBM's senior state executive for Massachusetts.

Hewlett-Packard also gained its foothold in the state through acquisition when it purchased rival Compaq Corp. after Compaq swallowed up Digital Equipment Corp. Today, Hewlett-Packard has about 2,500 employees in Boston, Andover, Littlefield, Marlborough , and Burlington. And, like their IBM counterparts, most focus on high-skilled tasks in computer hardware, software, product development, and customer training. Hewlett-Packard even created the wireless system that tracks runners in the Boston Marathon.

Bay State employees are "a very high-skilled critical part of our portfolio across HP," says company vice president Engelina Jaspers . "Being in Massachusetts has given us access to highly trained knowledge workers."

While IBM and Hewlett-Packard are operating in Massachusetts partly because of the skilled workers they can find here, many of the other companies in the Globe National 25 are service businesses catering to customers here.

They include companies like Best Buy Co., Bank of America Corp., Wal-Mart Stores Inc., Home Depot Inc., Target Corp., Comcast Corp., Sears Holdings Corp., and Whole Foods Market.

The two newcomers to the list this year -- Starbucks and Kohl's -- are in the service sector. Starbucks added seven stores here last year, bringing its total in Massachusetts to 139, accounting for more than half of the stores it operates in New England. Starbucks employs roughly 2,500 people in the state.

Kohl's, the department store chain, opened its 19th and 20th Massachusetts stores last year, bringing its total employment in the state to 3,073.

Bruce Mohl can be reached at mohl@globe.com; Robert Weisman at weisman@globe.com.

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