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Saturday, Aug. 8, 1998
IBM rivals compete over Olympics
Big Blue to sever tie to Olumpics after 2000 Summer Games in Sydney
By DAVID E. KALISH
Associated PressNEW YORK -- A decision by International Business Machines Corp. to sever its 38-year marketing relationship as a sponsor of the Olympic Games is sparking a competition by about a dozen major computer companies to fill Big Blue's shoes.
The interest by IBM rivals, including computer maker Hewlett-Packard Corp. and software company Novell Inc., underscores that IBM's pullout hasn't tarnished the allure of the Olympics' all-gold image as a corporate marketing tool. But it has changed the rules of the game.
Instead of signing an exclusive agreement as it did with IBM, Olympics organizers this time are seeking a group of computer, software and networking equipment makers to handle the behind-the-scenes technology that IBM has been doing by itself, from running Olympics World Wide Web sites to scoreboards.
The idea is to spread out the multimillion-dollar cost of high-tech sponsorship, which was the big stumbling block in negotiations between Olympics organizers and IBM for an eight-year contract extension.
IBM, which spent more than $100 million to sponsor the 1998 Winter Games in Nagano, Japan, and provided much of the behind-the-scenes technology for free, wanted local Olympic organizing committees to share the technology costs. Olympics organizers balked.
Despite IBM's departure from the games starting in 2002, marketing experts say the Olympics are still seen as a powerful way to enhance a brand image with even more widespread appeal than endorsements of individual athletes. Some people will choose a product with the Olympic emblem over another product because they want to support the games.
``Even before the IBM announcement, there were a number of very, very senior executives in information technology who had sent us queries,'' said John Krimsky, head of the marketing arm of the U.S. and Salt Lake Olympic committees. Salt Lake City is host to the first Olympics IBM won't be involved in, the 2002 winter games.
Olympics organizers solicited competing proposals from several technology companies after IBM submitted a bid that seemed expensive, said Richard Pound, an International Olympic Committee vice president in charge of sponsorships.
With several of the bids sweeter than IBM's proposal, organizers held their ground in negotiations.
Now, Olympics marketing executives will use that list of competing bidders as potential candidates for replacing IBM. ``The ones we'll speak to will probably include those and may go farther than that,'' Pound said.
IBM was one of 11 global sponsors of the 1998 Games. Most paid the IOC more than $40 million for their sponsorship packages, but IBM spent roughly twice that to fill the additional role of technology provider.
A source familiar with the search, speaking on condition of anonymity, said one possible candidate to share the sponsorship that IBM handled alone is Novell, a maker of networking software based 30 miles from Salt Lake City.
For its part Hewlett-Packard, one of the world's largest technology companies after IBM, is touting its month-long sponsorship of the World Cup soccer competition that ended in July as proof it can handle the Olympics.
Hewlett-Packard spokesman Bob Major said the company's powerful business computers ran the Web site for France, which had 1.5 billion visits over five weeks by Internet surfers viewing game scores and other information. Hewlett-Packard's medical-test equipment also handled drug and medical testing for Olympics athletes.
``There was not one single second of downtime,'' Major said, contrasting the experience with IBM's embarrassingly public glitches during its technology work for the Olympic games in Atlanta two years ago. IBM's sponsorship of the games in Nagano, Japan, went far smoother.
Major said his company shared the World Cup workload with other services and software companies.
IBM, for its part, defended its sponsorship and said it looked forward to handling its last Olympics, the 2000 Summer Games in Sydney, Australia.
``The IOC asked for a significant increase in our sponsorship commitment. We felt that was not commensurate with the marketing benefits we would receive in return,'' IBM spokeswoman Debbie Gottheimer said.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web