IT firms' next revenue avenue is sports

After recent wins by HCL, Wipro in this segment, Infosys announces tech partnership with professional tennis body

Information technology (IT) companies have long been using sports as a platform for branding and marketing. And, going by some recent engagements in this segment, have begun looking at this segment as a revenue driver, too.

In recent days, at least three major Indian IT outsourcing services companies have announced  technology partnerships with sports clubs and organisations, mostly European.

Last week, HCL Technologies announced a global partnership with Manchester United, with a mandate to transform the digital transformation programme of the latter football club which boasts of 659 million global followers. Wipro, third largest in the sector, tied up with Chelsea Football Club as official digital and IT partner. The partnership with Chelsea FC, reigning champions of the English Premier League, aims at helping the former re-imagine the digital and technology experience for its fans.
 

And, on Thursday, Infosys, the country's second largest IT services company, announced a technology partnership with the Association of Tennis Professionals (ATP).

As part of the contract, the Bengaluru-based company intends to use its technological capabilities in areas like mobility, cloud and analytics to transform the experience of tennis fans and players.

ATP is the governing body of the men's professional tennis circuit,s such as ATP World Tour, the ATP Challenger Tour and the ATP Champions Tour.

“Sponsorships for major global sports events by IT companies are nothing new. However, the recent announcements by HCL and Wipro go beyond “just” sponsoring events,” said Tom Reuner, managing director for IT outsourcing research at HfS.

Adding: “The main goal is to engage and expand the global fan base by leveraging digital technologies, with a view to unlock new revenue opportunities. By using these capabilities in real-time, marketing initiatives can tap into communities that thus far only interacted directly for merchandise.”

Among Indian IT companies, Tech Mahindra was one of the earliest to leverage sports for doing a strong branding and marketing exercise. Its partnership with FIFA as an official technology partner of world cup football for consecutive terms – in 2010 (South Africa) and 2014 (Brazil) – helped the company to redress to a certain extent the negative vibes created after its acquisition of scam-ridden Satyam at the time.

“Contracts like FIFA or the Olympics are typically heavily discounted and come with sponsorship opportunities which further muddy the water about their size and profitability. I think this trend has more to do with the Indian firms upping their game on the marketing and co-branding fronts than a new market opening up,” said Peter Bendor-Samuel, founder and chief executive of Everest Group.

However, he acknowledges that sports and sports clubs have for a long time been pioneers in use of technologies like social media and digital, though they have mostly done it with local talent.

Globally, there are quite a few examples of how IT companies have used sports as a platform to build their presence in specific markets, as well as globally. For example, Atos of france has long been working with the International Olympics Committee as official IT partner. Last year, the Committee renewed the partnership until 2024.

Atos would provide integration and systems management services, hosting services and games applications for the PeyongChang 2018 Winter Games, the Tokyo 2020 Games and the Olympic and Paralympic Games in 2022 and 2024.

There are also examples of global IT firms CGI and Hewlett-Packard sponsoring clubs and rugby teams, mostly limited to regions like Europe. “But, unlike sponsoring deals, the recent deals with Manchester United and Chelsea are different in that they're looking  at digital technologies to pursue new revenue streams. With the same token, the significance of these deals should be overplayed,” added Reuner.
 
As part of its ATP partnership, Infosys would also become the Platinum Sponsor of the ATP World Tour, as well as the season-ending Barclays ATP World Tour

Finals, for the next three years. Some of the key initiatives that Infosys intends to drive under this partnership include creation of an exclusive Infosys ATP Scores and Stats Center, to enhance engagement with tennis fans. The scores & stats center would be powered by the Infosys Information Platform, an open-source data analytics platform for data visualisation and analysis.

The company also said it would develop a next-generation player engagement platform called ATP Player Zone, and mobile app, to enable players to register for tournaments, review travel information, connect with other players, and stay up-to-date on all ATP World Tour news. “This partnership will enable us to bring new experiences in new ways to fans worldwide and will also serve to inform many new types of consumer engagements in other walks of life,” said Vishal Sikka, managing director of Infosys.

DECODING THE MATCH

• HCL Tech signs pact with Manchester United; to offer digital solutions to clubs’ fan base
   
• Wipro bags deal from Chelsea Football Club to become its official digital, IT partner
   
• Infy announces tech partnership with ATP, governing body of men’s professional tennis