Utility-based deal cuts tennis group’s IT costs

At this year’s U.S. Open tennis tournament in Flushing Meadows, N.Y., the organization that governs the sport in the U.S. tried to ace out high IT costs by joining the burgeoning move toward utility-based computing.

The United States Tennis Association (USTA) structured a utility-based contract with IBM Corp. to cover the operation of its www.usopen.org Web site during the tournament, which was scheduled to conclude last Sunday. Under the contract, the USTA will pay IBM for Web hosting, content caching and Web-site performance measurement services based on its average utilization over a 24-hour period.

The deal was set up to help the USTA handle surges in Web site traffic at a reasonable cost level, said Ezra Kucharz, managing director of advanced media at the White Plains, N.Y.-based USTA. The association typically has to increase its online capacity 50-fold to meet the demand for information during the two-week tournament, according to Kucharz.

Switching to the utility-based approach was “definitely a more cost-effective model for us,” he said. “It wouldn’t make sense for us to invest in [new technology for] a two-week event on an annual basis.”

IBM and the USTA didn’t disclose the financial details of the contract. Dev Mukherjee, vice-president of strategy and marketing for IBM’s E-Business Services on Demand group, said only that the deal was “a customized agreement.”

But utility-based computing isn’t just restricted to niche applications such as annual sporting events. For example, IBM also provides computing-on-demand services to large corporate users such as American Express Co., Saks Inc. and The Dow Chemical Co.

In the seven-year, US$4 billion outsourcing and IT services agreement it signed with New York-based Amex in February, IBM is supplying mainframes, storage and other processing resources, as well as technical support, on an as-needed basis.

IBM rivals such as Plano, Tex.-based Electronic Data Systems Corp. are also offering pay-as-you-go approaches to IT services. Utility-based computing “might be in its infancy, but it makes a great deal of sense,” said Jeremy Grigg, a Gartner Inc. analyst who works in New York. That could lead to “a significant transformation in the delivery of commodity services in the future,” Grigg added.

In the case of the USTA, IBM has managed the U.S. Open’s Web site and scoring system for the past seven years. The USTA runs its own Web servers 11 months per year, but it turns them over to IBM just prior to the tournament, said IBM executive Edward Curry.

IBM moves portions of the USTA’s content-serving workload onto its Intel-based Netfinity servers, which cache the information at peripheral network points to enable efficient content processing. During peak demand times, load balancing between distributed IBM RS/6000 SP servers and Intel-based xSeries boxes running Linux helps partition processing requests, IBM said.

Kucharz wouldn’t quantify the amount of traffic the Web site was experiencing for this year’s tournament, but he said it was up from last year, when the site had nearly 11 million user visits and served more than 172 million pages of information.