Patrick, *OT*
Here's some more on what it takes to do the Olympics... In addition to the cash, as I mentioned in my prior post, you need a large group of software specialists, to be tied up for an extended period of time, like years....
IBM's Olympic burden extended beyond
money
By Rob Guth
InfoWorld Electric
Posted at 11:06 AM PT, Aug 11, 1998
IBM's decision to end its sponsorship of the Olympic games, revealed late last week, severs
a 38-year relationship that has taxed the company in ways beyond what can be measured in
dollars and cents.
Though users may not see a direct benefit from IBM's plan to end its role as the builder of
the Olympic IT systems, IBM's customers should be glad the company is pulling the plug on
what has become a major distraction from its core business, according to many sources
associated with the games.
The decision is primarily based on the escalating price of sponsorship, officials said. The total
costs borne by IBM for building the IT system at the most recent games in Nagano, Japan,
were more than $200 million, according to officials interviewed this week who asked not to
be named.
Officially, IBM says the price tag for Nagano reached $100 million, including $40 million in
goods and services the company initially pitched in to be a lead sponsor.
Though local organizers, such as the Nagano Olympic Organizing Committee, are technically
"customers" of IBM and pay the company for the system, "by no means did they pay what it
costs us," said one official, who asked not to be named.
"If it's a big, normal customer, you figure you're going to make a commensurate profit, but in
this case [the Olympics], you don't make that profit," the official said.
IBM recently determined that the costs of future games would far surpass what it spent in
Nagano, officials said. IBM concluded that the incremental marketing gain of the Olympics is
not worth the pain, they said.
"The gap has been growing between what it really cost us and what the local organizing
committee agrees to pay us," said the official who requested anonymity. "We've got better
things to do with our time and money."
Moreover, the company and the International Olympic Committee (IOC) were at odds on
the committee's plan to open the technology sponsorship to multiple companies. Rather than
have just one technology sponsor pay $40 million, the IOC could garner more money by
having several, each handling a different facet of the system such as the Web site or
hardware, according to an IBM official describing negotiations with the IOC.
Beyond the financial burden -- IBM partially blamed Nagano for lower-than-expected
first-quarter earnings this year -- the Olympics takes an immeasurable toll on the company
internally, staff and officials who were interviewed said.
The Nagano games offer a lesson.
IBM for more than a year dispatched hundreds of full-time staff to the rural Japanese city to
tie together two S/390 Parallel Sysplex mainframes, more than 100 R/S 6000s, and 4,000
PCs and PC servers. Though the basic system was up and running a year before the games,
the Olympic crew spent most of 1997 testing and tuning the system to meet the needs --
many of which often changed -- of the various organizations using the system at the games.
IBM staffed the games with hundreds of its own from around the world, taking personnel,
including a Lotus Notes crew from Australia, away from their regular jobs.
For many IBM staff, the enormity of the Olympics means that success or failure can make or
break careers. As such, political rivalries among some staff grew to the point that some on
the project refused to use Lotus Notes since it leaves a "paper" trail of staffers' positions on
issues, IBM Olympic staff said.
And as the games neared, several staff were hospitalized, having collapsed on the job from
pushing themselves too hard, according to sources.
The risks extend to areas seemingly out of IBM's reach. Each time IBM's Olympic crew
descends upon a country hosting the Olympics, it brings inherent cultural risks.
In Nagano, it was the official Olympic Web site. To provide Web users with information on
each of the countries at the games, IBM licensed content from World Book Encyclopedia.
Weeks before the games, pro-Pyongyang groups in Japan protested information posted
about North Korea that said the country invaded South Korea in 1950. North Korea views
the Southern part of the Korean peninsula as the aggressor in the three-year Korean War.
IBM and the Norgano Olympic Organizing Committee promptly yanked the North Korean
content, and fearing other problems, ditched thousands of other pages that had been
licensed. Officials would not comment on whether they feared retaliation from North Korean
sympathizers, which are believed to have strong underground ties in Japan.
Jack Overarce, an IBM director in charge of the games at Nagano, compared the Olympics
to a "moon shot," explaining that when you're involved in the Olympics "the world is
watching." An official this week said IBM's decision reflects doubts about whether the world
cares.
"How many people sit there and still say, 'Didn't IBM do a great job in Nagano?'" the official
asked. "Not many people even remember."
IBM, in Armonk, N.Y., is at ibm.com.
Rob Guth is a Tokyo correspondent for the IDG News Service, an InfoWorld affiliate..
Related articles:
"IBM comes through with its Winter Olympics data network"
"IBM jumps over cultural hurdles"
"IBM crosses the Olympic finish line"
"Will IBM's Olympics' system make the grade?" |
