Cleveland Cavaliers: Outsourcing IT...the new trend?

Sports Business Digest — October 29, 2009

When you think of the Cleveland Cavaliers, what comes to mind? LeBron. Shaq. Hosted Solutions.

Wait, what?

The Cleveland Cavaliers continue their reign as one of the most technology savvy sports teams, this time partnering up with IT company Hosted Solutions.  Why you ask?  Lets go to the press release first (thanks to Steve Freidberg for the info)

Hosted Solutions, the East Coast’s premier provider of IT infrastructure as a service (IaaS), announced that they have entered into a partnership with the Cavaliers Operating Company, LLC., whereby the Cavaliers will use Hosted Solutions’ Stratus Trusted Cloud™ to power the team’s official arena website, theQarena.com.

Because the arena’s website is anticipated to draw much heavier web traffic this year, the Cavaliers selected Hosted Solutions in an effort to increase the availability and robustness of theQarena.com.  Reasons for increased traffic include:

The team and arena recently launched their own single-game primary and secondary market ticket sales service with Veritix - the industry’s most cutting edge digital ticketing, event marketing and relationship management platform.   The public is directed to theQarena.com to purchase tickets to all Quicken Loans Arena events including the Cavaliers and AHL Lake Erie Monsters.

The Cavaliers begin their 40th season with a powerful team of proven players and high expectations and projected record attendance (The Cavs set two franchise records during the 2008-09 season with an average attendance of 20,512 and the number of sellouts— 38 total.)

The Q now heads into an entertainment season with a jam-packed schedule of special events expected to generate record website traffic levels.
Stratus Trusted Cloud provides the availability needed to handle spikes in traffic at any time.

“The upcoming year is sized up to be ‘XL’ in every way, including our fans’ interest in tickets to see the Cavaliers, Lake Erie Monsters, concerts, special events, and family shows,” said Jeff Lillibridge, Web Services Director.  “We feel the scalability and dependability of Hosted Solutions’ Stratus Trusted Cloud is a perfect match to support our needs, which in turn allows us to provide our fans the level of service they deserve.”

Introduced earlier this year, Stratus Trusted Cloud dramatically improves the efficiency and availability of IT resources and applications for small and mid-sized enterprises.  Stratus offers a massively scalable, multi-tenant infrastructure that enables customers to access a secure, enterprise-class cloud environment with built-in high availability and automated resource balancing. As a result, businesses can move faster without compromising availability or security and significantly reduce both their capital and operating expenditures, whether Stratus is deployed on an enterprise, private or hybrid cloud basis.  Moreover, Stratus is designed to provide an added level of assurance to companies that their data and entire infrastructure is being administered in a trusted manner, acting in accordance with a full range of governance, risk management and compliance (GRC) regulations.

“The demand for an ‘always on’ IT environment is not unique to the Cleveland Cavaliers,” said Rich Lee, Hosted Solutions’ founder and Chief Executive Officer.  “Any company doing business online requires the highest degree of reliability; even a short amount of downtime in this competitive economy can hurt significantly.  The Cavaliers’ decision to deploy the Stratus Trusted Cloud for their arena website confirms its value for firms seeking a reliable, consistent and secure approach to ensuring that their website is up and running when they, and their customers, need it most.”

Lee added that several other companies have chosen the Stratus Trusted Cloud in the last several months.  He noted that 80 percent of Hosted Solutions’ clients run their production environments through his firm, a further testament to the superior level of performance delivered by the Hosted Solutions team.

So, why would the Cavs do this?  For one, its cost effective.  I spoke with Hosted Solutions VP of marketing, Noreen Allen, who helped me understand better (paraphrasing below):
"Trusted Cloud technology is the sharing of infrastructure.  Multiple clients are able to share bandwidth, memory, etc.  The company is able to utilize the usage of hundreds of thousands of dollars worth of IT equipment while only paying a monthly fee.  Also, Hosted Solutions primary specialty is (IaaS) so there is a reliability factor to take into account."

The Cavs are essentially paying a monthly fee to cover spikes in traffic while purposely not buying hundreds of thousands of dollars worth of equipment to cover lulls in traffic.  Seems like a good idea.

*Waits for everyone else to jump on the bandwagon*

The Atlanta Falcons, Speedway MotorSports, and the Carolina Hurricanes and Panthers have used the product previously, according to Noreen.  Its a trend she sees continuing in the future,
"I do see more companies utilizing this technology due to the cost savings and the specialization of a company like Hosted Solutions."

Makes sense.  Everyone remembers the fact that the NBA had to borrow money in February for half of its teams...And everyone knows that even sports are suffering through the recession.  Not that I expect every team to 1. need a huge IT department in the first place or 2. experience the kind of spikes that the Cavaliers would, outsourcing makes sense because its cost effective.

I expect this sort of trend to continue as well.