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IBM's Performance at Olympics Not Quite a 10

Glitches: Some managers and customers may second-guess Big Blue's ability to build a fail-safe system, analysts say.


IBM Corp. endured a barrage of embarrassing publicity last week as the computer system it built for the Atlanta Olympics malfunctioned--and now Big Blue is bracing to see whether the problems will actually hurt its sales.

Analysts said the kinks in the Olympic system--especially the piece of it that was supposed to feed up-to-the-minute event results to fans and the media--will probably cause managers who buy and maintain business computer networks to second-guess IBM's ability to construct a fail-safe system.

"There's something fundamentally wrong either with their technology or their integration effort at the Games," said Donald DePalma, a senior analyst at Forrester Research in Cambridge, Mass.

"Anyone in the business community who is looking at a massive network using IBM gear or expertise will take a second look," DePalma said.

Several computer systems managers said that although it's normal for things to go wrong with such a large system, they would still think twice about purchasing any of the equipment IBM used to build the Olympic system.

"Here they are trying to blend a bunch of technology, and they're using old proprietary systems," said Steve Rees, computer services director at Tektronix, a color printer manufacturer in Wilsonville, Ore.

"I would certainly second-guess buying the products they are using at the Olympics," he said.

Computer managers said the problems reinforced what they already knew about Big Blue: that it's not good at "network-centric" systems. That's precisely the rap IBM is trying to overcome in an era when more computing is taking place on networks of all kinds.

"They're good at producing mainframes, but they are not good at producing integrated systems," said Armando Garcia, manager of networking services for Bowne Inc., an international financial publishing house based in New York.

"No one ever thought of IBM as a total solution package," Garcia said.

Some consumers who were aware of the problems also seemed unforgiving.

"I would be slightly less inclined to buy one of their systems," said Arthur Kinwalt of Glendale. "They should have done a better job."

The main difficulties have been with the electronic feed that ferries event results from Olympic venues through IBM's computer system to 12 news services, which, in turn, funnel them to their member newspapers and radio and television stations. It's been working only on and off since the Games began July 19, forcing editors in many instances to have the standings typed in by hand.

The press feed is linked to a complex $80-million information system--which includes 7,000 PCs, three mainframes, thousands of hand-held devices and gear from Xerox, Swatch, AT&T and others--created by IBM to operate the Games.

The bad publicity has certainly ruined IBM's hopes of using the Games as a means of wooing customers in the fast-growing Internet and intranet markets.

Some say the long-term damage is likely to be modest at most.

"I don't think it will be significant in the long run," said Mohanbir Sawhney, an assistant professor of marketing at Northwestern University. "This was the opportunity for them to make a really big break, and they may have lost some of the return on that investment, but it won't be a huge negative."

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