The travel industry has been leveraging software for more than 60 years, starting with American Airlines’ installation of the first automated booking system in 1946 (hat tip to Stephen Joyce) and led the way for electronic commerce even as Gates, Jobs and Packard were playing with blocks.  So what that really means is that there’s a lot of old code out there on old platforms.

And to a large extent, while these systems are still running, they cause their fair share of problems:

• High cost of operations: can’t take advantage of lower cost hardware or Cloud-computing
• Fragility and Inflexibility: the systems don’t allow for rapid feature enhancement or make integration with other systems challenging.
• Mortalityware: literally there are fewer people alive who know the old development languages and how these systems work. And it’s not a problem that gets better.

Now it’s kinda scary that a trillion dollar industry is so dependent on what many would consider to be outdated tech. And the movement of the industry towards a la carte pricing, a.k.a. ancillary revenues is being blunted in part by the ability of the underlying software to merchandise and manage the distribution of these different offerings through multiple channels.

But modernization is a challenge that the industry has struggled with for years and while some systems have been moved to modern platforms, many more are still tied to the past. So what’s holding things back?

It’s not technology. Certainly a big part is an organization’s appetite to expend the resources to make the move. But I believe an underappreciated aspect is the psychology of taking on a modernization project. Many of the applicationsthat we’re talking about have millions of lines of code that have built on top of each other like an archeological dig with one civilization built on top of another. So the task can seem daunting and lead to paralysis. Few want to undertake a full re-write which can feel like a Cecil B. DeMille film, costing millions of dollars and thousands of lives (or at least man-years).

So it’s good to have a framework with which to view your choices. A good model is my “Six Degrees of Modernization” which covers the main paths to modernize your application.

When dealing with a huge project as we’re discussing, the big bang approach of re-writing the code is often a recipe for disaster and porting really doesn’t buy you a lot. So an evolutionary approach can be of great help. An example of such a strategy is where you’d start by separating and Wrapping the different bits of functionality into a SOA harness. Now that you have the code broken into more manageable pieces you can start the process of Translate/Refactor or Replace piece by piece — with the dual benefit of shrinking the size of the problem to a more manageable level that will help create early “wins” for your team and momentum for the project, as well as delivering a more flexible, higher code quality platform.

But this is not something that everyone should try at home. This is not a coding activity, although that’s a big part of it. More than anything this is an architectural challenge (even more so if you’re trying to transition from an on-premise to an On-Demand model). And it’s an area where Ness Software Product Labs Strategic Consulting team have helped many clients.

…or at least July 2010.

With the announcement of the Open AXIS Group a few weeks ago there’s a lot of questions about the eventual role that it will play in setting messaging standards. Will it help move the industry forward or will it simply result in a fragmentation of messaging frameworks (vis-a-vis OpenTravel) that slows the industry down?  In the end, it’s up to the industry to decide.  So far it sounds like the Big 3 GDS’s want a single framework but haven’t made any official pronouncements on how they feel just yet.

But don’t wait for them to have your voice heard!

This blog, in coordination with Tnooz and Ness Software Product Labs has created a survey to find out what you think. Please take 5 minutes to fill out the survey.  The survey closes out at the end of the month.

We’ll be posting results in another week or so in Tnooz in a follow up to the original story.

Hot industry stats, debates on legislation, an Open Source cloud stack and other news of note:

1. Since Congress has started to take up the question of whether airlines need to be transparent about ancillary fees across channels, in order to allow travelers adequately compare real costs of their choices, Timothy O’Neill-Dunne puts forward the definitive answer. Of course no one in Washington is listening, so this drama will surely last longer than the Microsoft Kin (what wouldn’t?).



2. On a related note, Sabre announces that it will update its “Air Total Pricing” system to enable travel agents and consumers see the total price of their trip, inclusive of ancillary fees before they book. The comparison shopping aspect will be addressed first, but the booking and fulfillment portion of the equation probably won’t be solved until later this year.
3. Forrester Cloud Computing analyst James Staten provides his view on Rackspace’s announcement to Open Source their cloud computing stack. NASA may not have found intelligent life out there, but must think the folks at Rackspace are pretty bright because they are amongst the first to deploy the platform.
4. Shortly after being identified as key competitors by Google, heretofore unheralded start ups Everbread and Vayant go mano-a-mano as Vayant alleges copyright infringement.
5. The continuation of a good week for Apple. First they declare there is no Antenna-gate and then they obliterate earnings estimates with their best quarter ever.  iPads almost outsold Macs and it was the most Macs ever sold in a quarter.
6. To patent or not to patent. That is the question. Great article by Pamela Samuelson from Cal-Berkley on why startups decide to patent…or not.
7. TopGuest, a new location-based travel rewards service has a bunch of notable investors, but more importantly nabs a partnership with the InterContinental Priority Club and IHG’s 4,400 properties.
8. Amadeus released preliminary results of their Guide to Ancillary Revenue in association with leading airline ancillary revenue consultancy IdeaWorks. Some good stats if you missed it.
9. While we have our survey out on what you think about the new Open AXIS Group, Professor Sabena gives us his take.
10. An entertaining and insightful view on the upside of newly passed legislation in NY outlawing the use of private dwellings short-term rentals. While decried by many as propping up the large hotel chains, there are real safety, health and security concerns that this bill protects unsuspecting travelers from.

Two different announcements from Google came out last week with regard to their Android platform and taken together seem to indicate that they don’t care quite as much about their developer partners.

First was the announcement of Google’s App Inventor which puts app development in the hands of virtually everyone.  This would seem to not only diminish the relative value of the development skills that people have been investing in learning the ins and outs of the Android platform over the past year or two. And it would seem to contribute to an increased of low-quality apps that already seems to pervade the Android store, at least in comparison to those found on Apple’s App Store. I’m pretty sure that’s not a good thing.

The second item came from Google’s earning call when Jonathan Rosenberg, Google’s SVP of Product Management said: “I think the most important thing beyond the growth [of the Android ecosystem] is that the most popular app is a browser.”  Rosenberg also noted that search on Android devices grew 300% in the first half of 2010. But monetizing mobile web properties is harder than monetizing apps.

So that tells me a few things. One Google doesn’t really care as much about app growth and still sees search as the key element of its mobile strategy.  But apps are theoretically how developers get paid.  Taken together with numbers quoted on how many dollars have been paid out between Apple and Google through apps it seems to me that if I were considering where to put my development efforts, I would be less interested in developing on the Android platform.

Do you agree with my point of view? Are you putting more resources behind iOS development, Android or some other platform (e.g. RIM or WebOS)?  Let me know.

Sorry for the late Monday post. So without further adieu:

1. Google introduced App Inventor, a simple GUI based app builder for Android OS. TechCrunch’s Jason Kincaid takes it for a spin. Mike Loukides from O’Reilly Radar discusses the different philosophies behind Apple and Google as evidenced by App Inventor. I for one don’t think that we’ll be better off having more bad apps at our disposal, but to each his own. And I guess that’s Google’s point.
2. Tnooz reports ITA had been working on hotel search. Add this to Google’s display of hotel listings and pricing on Google Maps and you’ve got some serious juju going.
3. Big cloud announcements at Microsoft WDC10. Perhaps Azure-in-a-box is the most intriguing. Ben Kepes has an interesting take.  And eBay is the first high-profile client to take the plunge.
4. Facebook v. Google: the upcoming travel wars. Interestingly the author ponders Microsoft’s potential role, but doesn’t consider Apple.  Curious.
5. Apple had its press conference on Friday, but the real-world experiences of Engadget’s own writers shows that perhaps the iPhone4 antenna issue isn’t as big of an issue that the media is making it out to be. And I would say that Microsoft COO Kevin Turner’s lame attempt at a joke equating the iPhone antenna issue with the outright suckiness of Vista was imprudent at best. First ship a mobile OS that doesn’t suck and then you’ve earned the right to say something.
6. In related news, it looks like Microsoft Phone7 OS isn’t going to be the game changer they hoped it would be.
7. Can Google make a good travel product? TravelPost’s Simon Breakwell has some definite opinions. A must read.
8. Google Click-to-Call. Is this the new face of mobile advertising?
9. Bing Travel introduces Flight Summary with savings if you’re flexible with your travel plans. Pretty cool. Would be even cooler if they could integrate dynamic packing of hotel and car to give the best overall travel value.
10. Homeaway hires their new COO from PayPal. This signifies a move to better integrate alternative payments (including mobile) into the booking process, but perhaps shows an appreciation of the benefits of having a more professional software engineering organization in order to keep up with the needs of the business.

There were several stories today on TechCrunch about upcoming tablets as well as several…shall we say curious…statements from Microsoft executives at their Worldwide Partner Conference in the nation’s capital.  I find much of the conversation and posturing from vendors and pundits interesting and incredulous at the same time.  Sometimes I’m not even sure if they know what the game is that they’re playing.

From a media perspective it seems to come down to whether you’re an Apple fan or someone who wants to see Apple knocked down a few pegs.  I mean one of the dumber comments I’ve seen was by Inc.’s Renee Oricchio who when comparing a proposed Droid tablet to the iPad asked:

“Who’s more business oriented? Do you really see the UPS man having you sign for a package on his iPad? Hmmm… But, I bet you can see doing it on an Android pad. I can. I can see the UPS man using a mashup app between Google maps and his delivery route data, even Google calendars.”

Is there inherently anything different about an Android-based tablet that could possibly make this statement true? Did I miss where you can’t access Google Maps or Calendars on the iPad or where those services couldn’t be built into an app or via a HTML5-based site. I didn’t think her other points made any sense either.

Anyway, not that anyone’s asking me, but I’d suggest that tablet vendors follow this advice:

1. If it’s not shipping within the next 6 months, shut up. Earlier this week there was an “announcement” of sorts from HP about a flexible tablet based on the WebOS from the recently acquired Palm. Personally I think that WebOS is a great platform and that it provides HP a chance to really own the corporate tablet market. But as someone who owns a Palm Pré, just focus on taking the OS to the next level and get out a new phone and the Slate before you start talking about something that won’t ship for 5 years.  Another example of getting too far ahead of yourself was the Microsoft Courier. When it was first introduced it seemed a dream device, and perhaps most notably a very-non Microsoft-like. It seemed like a sure fire hit…except that Microsoft killed it a few months ago and we’ll never know. But of course none of that stopped Microsoft CEO Steve Ballmer from telling the world that he’s hardcore about tablet computers at WPC 2010. Ship something…please.

1. Do not focus on specs. It’s a race to the bottom, not the top. This is the classic mistake that many tech companies make, often borne out of a lack of any real differentiation. It’s also the easiest thing to get “beat” on by the next product the competitor releases. Besides, so many companies use the same components and it’s difficult (if not impossible) for customer to really understand what impact the difference in specs really has on the performance and quality of the product they bought (didn’t we learn this about processor clock speed?).  Author Steven Sinek’s latest book “Start with Why” premise is that best, most profitable companies with the most loyal customer base are those that don’t focus on what they do (focusing on product specs) but have a very clear vision, understanding of “why” they created their company and the products they make flow from that vision.

1. Keep usability front and center. This is the flip side of the spec issue. It’s amazing to me that companies learn the lessons of why different mobile devices have succeeded and others have failed. The success of the first Palm Pilot was its simplicity. There were 4 buttons on the device, built around a customized operating system and the apps worked well.  On the other hand, there’s Microsoft’s Windows Mobile OS. Microsoft proffered this shrunken version of the Windows desktop operating system that was ill-suited to the medium, putting the importance of extending the Windows franchise ahead of the needs of the customer.  Well it worked so well that Microsoft finally had to shed the Windows moniker for the launch of Windows Phone7 this fall.

Yet usability is what’s been behind the success of the iPod, iPhone and now the iPad. Neither of the first two products were first in the market, but they redefined the category and thrust Apple into the American consciousness as never before. The iPad is often ridiculed as a giant iPhone or a device for your Mom, but the execution is excellent and it’s the elegance of the interface, designed for the medium has been the key to the success of the device and Apple’s ability to define the segment – so much so that everyone else on the planet is rushing to join the party.

1. The characterization of the iPad as a consumption device is a false argument. I’m not sure that I can’t count the number of times I’ve heard this repeated. Nor do I necessarily believe that it’s true (at least compared to other similar devices) or whether or not it matters.  There’s no debating that many of the apps that were featured in the launch were consumption based, but considering apps like Documents to Go by DataViz, Evernote, OmniGraffle, Wordpress, twitter apps, I just don’t believe it’s true.  And that’s not considering the fact that we’re looking at a product that’s only been in the market for just over 3 months so the best apps are still in the future. And it’s clear that iMovie for the iPad (just released for iPhone4) is in the very near future.  And if you look at this video, I’d like you to tell me that you can’t create on the iPad with a straight face.

1. One last thing…if your tablet requires a stylus, you’re doing it wrong. Bill Buxton from Microsoft Research recently declared at WPC “A device without a stylus is like chinese food without chopsticks”, meaning that their new tablet concepts are going to use a stylus…something not considered on the oft-praised, but not to be released Courier. When will they learn.

Well I hope that everyone enjoyed their holiday. But before I get to the tech and travel news, I must comment on “The Decision”.  Yes, I was among the 10 million people that watched LeBron James rip the heart of his own city when he announced his decision to play for the Miami Heat next year. Like many I feel terrible for Cavs fans and LeBron is diminished in my eyes. Not for the choice that he made. I mean hey, if I was a single, 25-year old mega-millionaire, I’d probably want to play with my two best friends and live in South Beach too. For LeBron South Beach won’t be eye-candy, it will be candy.  And he’s the owner of the candy store (or at least COO with Dwayne Wade as CEO).

Credit: Al Diaz/Miami Herald

But what was unforgivable for me was the way that he manufactured the drama and built-up his own TV special when in fact the decision had been made days, if not months ago. I just can’t imagine that as an Ohio native that he didn’t understand just how his decision to leave would devastate the community and his fans…and how dragging out the process and announcing his decision on national TV would make the effect even worse.  Jeff Van Gundy had it right on the broadcast when he said that the one thing he’d regret is not informing the Cavs of his decision before the broadcast. I think that Cavs’ owner Dan Gilbert’s fantastic/unfortunate/comical “open letter to Cavs fans” is testament to that.

OK, on to this week’s curation.

1. Everbread raises about $85M from Bessemer Ventures. I guess it pays to be named by Google as a competitor.
2. YouTube Mobile goes HTML5. Seems as if the mobile web site beats the app, which seems to jive with Google’s strategy of moving towards a mobile web, rather than an apps.
3. There has been a lot of talk about how Facebook could have an impact on the travel industry via their OpenGraph. Well Facebook made their first overt move into the travel space by acquiring NextStop, but then immediately shut it down.  In all likelihood we’ll see the NextStop tech in another form, but it will continue to get interesting.
4. Last week OpenAxis debuted, this week it’s the BLLA announcing the development of a new standard for defining boutique and lifestyle lodgings in hopes to level the distribution playing field with the large hotel chains.
5. Very interesting stats on how people are using the iPad from Resolve Market Resarch. On a related note, Enterprise Irregular Jeff Nolan recants his original take on the iPad and notes that besides e-Readers, netbooks are getting smacked down in favor of iPads.
6. Good sign for a future recovery: US Venture Capital fundraising is up 13%, although that’s still only half of what was raised in the first half of 2008, it’s moving in the right direction. And since emerging businesses are the real jobs engine in the country (many say small business, but really it’s new businesses), this is promising for the future.
7. Continental re-ups their GDS relationship with Travelport through 2013. It’s interesting that CO is doing these kinds of deals with the merger with United scheduled to close later this year. I understand the urgency on Travelport’s part, but with another year on the existing deal, why did CO jump now? At some point doesn’t a merged CO-UA have to re-evaluate and re-negotiate these kinds of contracts?
8. Next week is Microsoft’s Worldwide Partner conference in DC and Azure (Microsoft’s Cloud Computing platform) is supposed be front and center. Altimeter Group’s Ray Wang gives Microsoft partners some Azure rewards and risks to keep in mind while listening to the presentations at the conference.
9. Just a week after OpenAxis is announced, American Airlines announces that it will be making all its optional services available exclusively through Farelogix.
10. Two weeks in a row a major technology company buys a travel firm.  This time it was Facebook buying Nextstop. At first there was speculation that this was Facebook first step into the travel sector to keep up with Google and Apple, as had been rumored after they unfurled their OpenGraph at f8 in April. But according to TechCrunch it looks like perhaps they’re just accumulating talent.

Well I’m back from vacation and I hope everyone had a great 4th of July weekend.  So what happened last week? Let’s see:

1. The big news of the week is that finally, Google buys ITA Software for $700M. Here’s some “expert analysis” via Tnooz that somehow includes me.
2. Rumored last week, a new airline standards group called OpenAxis emerges, rallying around Farelogix messages. As they are also proposing XML-based messaging schema, I’m not quite sure how technically this will differ from OpenTravel. They say that perhaps they will be more agile and move more quickly than OpenTravel, but it’s easy to say when you have only a few founding members. Let’s see if they create traction and whether they can remain agile once they reach any sort of scale as an organization. As an aside, and maybe I’m dating myself, but any group that has “Axis” as part of their title makes me feel uneasy (see WWII). I’m not making any comparisons, I’m just sayin’ I might have chosen a different name. Perhaps Valyn will license the Captain America imagery for OTA
   

   Image Credit: Marvel Comics

3. If you’re going Cloud, having a billing engine that supports granular metering, pricing and billing is critical.
4. RockCheetah founder, Robert Cole’s presentation on Mobile Distribution from the HITEC conference.  Other than a few quibbles on slide 18 (in my view the walled garden on searchability is more about security of personal information than control, e.g. Facebook; Apple doesn’t block AdMob ads, just collection of personal information), a very good overview of the intersection of travel and mobile.
5. Via Tnooz, 4 Vital Social Media Tips for the Travel Industry. The most important thing to note is that the 4 steps happen in exact opposite order for the buyer versus the seller.
6. Not only does it appear that the Google-ITA Software deal has hit a snag, it seems that other potential suitors have coming knocking on the doors in Cambridge [Update see article #1. Always hard to prognosticate].
7. YouTube says that it still sees Flash as an important part of their distribution, but unlike how it’s been reported in some places, it’s not because of the video CODEC, but because of the granularity of control that the player provides.
8. Timothy O’Neil-Dunne tells us what we already know – travel websites leave a lot to be desired by the consumer – but gives some good context as to why. The question is whether the people who run the travel websites will ever do anything about it.
9. Good post on CloudAve about the disservice that many engaged in the Public v. Private Cloud debate are doing for the industry. I’ve commented on the post itself.  Take the time to watch the embedded video of Amazon Web Services CTO, Werner Vogels’ keynote at last week’s Structure 2010 conference put on by GigaOM.
10. Great article, bad news. Harvard Business Review talks about the problems being faced by the VC community (and by extension entrepreneurs) and the coming VC shakeout

Well this ought to be interesting. After many fits and starts the deal is finally done, pending regulatory approval. The question is what is coming.  Google’s ITA acquisition micro-site says all the right things, but what’s not completely clear is what the “enhanced” search tools will be.  On the conference call this afternoon with analysts and press both Google CEO Eric Schmidt and ITA Software President and CEO Jerry Wertheimer were very vague about the future direction of the ITA products and business, with Schmidt noting that while no definitive decisions have been made the new offerings would be “very different than anything available today”.

There’s a fair amount of information on the a Google microsite describing the transaction, much of it establishing a bulwark against any possible anti-trust concerns, making the case that there is no anti-competitive impact to the acquisition.  This seemed a natural move after recent rumblings that competitors would try to block the deal, or try to jump in before it closed.

But let’s look a little closer.  While seemingly promising to honor commitments to existing QPX customers and pledging to stay out of the online travel agency business, it does seem as if the door is open to become a meta-search provider.  The statement that they “…will drive potential customers to airline and online travel agency websites” is slightly less than “code” for we will sell advertising to airlines and OTAs.  Sounds like meta to me.

Perhaps the most telling statement was their promise not to “lock out” competitors. That doesn’t necessarily mean they won’t compete with the current clients, just not shut them down.  So while the folks at Kayak.com, Orbitz and Bing don’t need to switch technology immediately, it’s probably prudent for them to evaluate alternatives post-haste.

However, if we let’s take a quick look at the way that Google views the travel industry, perhaps Google isn’t targeting meta-search and OTAs after all, but has the Big 3 GDSs in their sights.

How the future unfolds should be very interesting.

Last week I presented on a webinar alongside PhoCusWright analyst Bob Offut, entitled “Travel Innovation and Technology Trends: 2010 and Beyond”, sponsored by my company Ness Software Product Labs.  I’m providing links to both the PDF of the slides and the replay of the webinar via WebEx below.

In the webinar, Bob talks about the Top 10 travel technology trends, based on PCW’s report that came out in March (subscription required).  Then I pick up at the 45:00 mark (slide 81 in the PDF) to discuss the impact of Cloud Computing and Mobile on the travel industry. Some highlights from the presentation:

• Cloud Computing and Travel
  • Watch out for Cloudwashers. There are a lot of people who are either trying to prey on those still confused about Cloud, some of which are purposefully obfuscating their solutions to cash in on the trend.
  • Cloud can be an important part of a modernization strategy, but isn’t an end in and of itself. Evaluate the “Six degrees of Modernization” and think about how Cloud can fit within the direction you chose.
  • The Public v. Private Cloud debate is interesting, but it’s not necessarily and either/or proposition. Private Clouds do lack certain attributes and benefit of Public Cl0uds, but think of the difference as an evolutionary process, not alternatives.
  • Moving to the Cloud requires a change in perspective from mere software development to a systems engineering mindset.
• Mobile and Travel
  • Mobile Devices are Becoming the Center of Traveler Interactions
  • 5-step Framework to a successful mobile strategy. Understanding the use cases of your customer and the role that you want mobile to play in their overall experience with your brand is critical.
  • Determining whether you want to take an mobile web-oriented approach or an app-oriented approach, and what platforms/devices your target customer is likely using make a big impact on the technology choices you make.

Anyway, enjoy the presentations. I had a good time and I hope you find the information interesting and useful.  Please let me know what you think. Contact me directly  or add to the conversation in the comments.