The cloud, SaaS, and why the hotel industry is stuck in the past

by Craig Weissman, CTO and Co-Founder | October 28, 2014

I heard an eye-opening statistic at the CIO Summit recently. A speaker said only one of the top 15 mobile travel apps was from a hotel company and the rest were from OTAs. That is not surprising in any way, but it should be alarming to hotel companies and the CIOs in attendance.

OTAs are dominating the mobile space—and a few others—because their business is technology and they can identify and hire skilled software developers, a difficult talent to find. Hotel companies and IT departments have a hard time hiring the same talent—and are getting their lunch handed to them. I’m guessing many are hiring consultants to build those mobile apps and the results aren’t pretty.

“’We built it ‘in house’ is no longer a bragging point. In most cases, ‘in house’ is now used to describe backwards software alongside ‘slow’ and ‘user-unfriendly,’” wrote BlueSnap CEO Ralph Dangelmaier for Gigaom, a website covering emerging technologies. https://gigaom.com/2014/09/07/weve-reached-the-end-of-build-it-yourself-software/

I couldn’t have said it better. Twenty years ago, that was the typical strategy for everyone, but the hotel industry continues to lag in two megatrends: Cloud Computing in general, but more importantly the Software-as-a-Service (SaaS) model.

With SaaS best of breed, software is delivered as a utility over the Internet—without the IT department needing to install or maintain anything on-site or even in their own “private cloud.” Many hotel brands still hire their own development and operations teams and build what usually turns out to be incredibly inefficient and extremely expensive software. I can’t believe the time and money necessary for that is the best use of resources for companies like Marriott and Starwood. Google Apps, Salesforce.com, Workday, Concur and others have made SaaS a commonly understood acronym for increasingly large swaths of Enterprise Software—and the most successful companies today are partnering with best-of-breed vendors for their software needs.

There is no reason why hotel companies should be building their own custom mobile apps or property management systems—SaaS vendors should fill the void for white label mobile apps and SaaS property management systems will replace today’s legacy on-premise ones. Technology companies whose primary business is building property management systems are a far better alternative than one built by a hotel company whose primary business is heads in beds.

And when hotel owners and executives are choosing who to partner with, remember the “cloud” is not the same as SaaS. The cloud can simply be another way to run servers with legacy software. That’s a bit better than buying and maintaining your own hardware or renting space—but true SaaS is more than that. It is not moving the same stuff to someone else’s data center.

True SaaS is a much more fundamental change. If you have a version of a software system that needs to be upgraded or you’re constantly getting patches and paying for additional features, stop. Stop right now and find a vendor whose job it is to maintain, run and seamlessly upgrade the software you subscribe to. It’s not your job to worry about patches, hardware, consultants or networking.

That should all come automatically and without any additional fees if you’re partnering with a true SaaS provider. The vendor provides continual updates, constantly improving the software and notifying you in advance of any significant changes. They offer training and let you test out new features in the sandbox before they go live. Everything just shows up, automatically and seamlessly, smoothly rolled out so the CIO doesn’t have to do anything.

The other benefit is when you’re stitching together a handful of SaaS vendors—think PMS, CRS, RMS—you don’t have to worry about how the different systems will communicate with each other. That is also the vendors’ jobs, not the CIO’s. Once a provider figures out how to talk to another cloud to cloud, the integration is automatically finished for all clients using both systems.

Hotel CIOs need to stop writing their own software and stop working with vendors built on 20-year-old architectures. Stop thinking about using the cloud as an alternative to doing business as usual and demand more from your technology. Software patches and new version installs should not be part of your vocabulary or daily life. Seek out vendors providing true SaaS to replace those that aren’t. There are options available now and more will be coming in the near future.

Leave the technology to the tech company so you can take care of your guests.

Craig Weissman, CTO and Co-Founder

Craig is a widely recognized leader in the field of SaaS software development and design. Before co-founding Duetto, he was the CTO of Salesforce.com. He has a master’s degree in computer science and a bachelor’s degree in applied mathematics from Harvard University and holds multiple technology patents.

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