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Now it’s kinda scary that a trillion dollar industry is so dependent on what many would consider to be outdated tech.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.

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.

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.

A lot of stuff happened while I was OpenTravel’s 2010 Advisory Forum in Seattle this past week:

1. I’d be remiss if I didn’t start with the successful IPO of Amadeus (AMA.MC), the largest GDS and leader in global travel technology solutions…and Ness Software Product Labs’ signature client in the travel technology space.
2. Apple buys Siri.  It’s not just mobile-web search, Siri also has the ability to learn preferences and not just provide better results back, but help complete activities or business processes like making dinner reservations or booking a flight.  It should be interesting to see how the iPhone experience evolves as Siri deepens the integration with iPhone OS.
3. Salesforce.com and VMWare announce VMForce.  Looks like Salesforce finally admitted that APEX was holding back the Force.com Platform-as-a-Service business and partnered with VMWare to enable direct Java-based development on the rest of the Force.com infrastructure. Good analysis by Enterprise Irregulars Phil Wainwright, Bob Warfield and Brian Sommer.
4. 5 reasons iPhone v. Android isn’t Mac v. Windows. Well said.
5. Another Top 5 list.  This time it’s the untapped or under-exploited opportunities in travel.  Mobile payments, re-booking top the list, but read on to see what other opportunities lie in wait.
6. Steve Jobs’ official position on Apple v. Adobe Flash.  Nothing terribly new (or not already said by Daring Fireball’s John Gruber), but if it’s written by Steve…and he gives it almost 1700 words, you should at least read it.
7. Excellent analysis of what Apple’s announcement of iAds will mean.
8. Tech Crunch’s Michael Arrington announces that with the recent announcements at the f8 conference we’re officially in the ‘age of Facebook’.
9. Forrester’s JP Gownder offers an opinion on why consumers will pay more for products and uses the Mac as a shining example.  I only have two issues with the analysis.  First I think that Gownder mistakenly equates repeat purchase with brand loyalty.  But more importantly, the piece reads as if the three categories can have similar impact. As I’m in the middle of Steven Sinek’s “Start With Why”, I believe “self-selection” (as Gownder calls it) reason is by far the most influential. But if you read the book, self-selection has a lot to do with whether or not a company has a compelling “why”.
10. On top of the Amadeus IPO, two big mergers in the travel industry:  Hertz buys Dollar Thrifty and United and Continental Airlines are set to merge under the United moniker. And it increasingly looks like Google will buy ITA.  A lot of activity for sure.

Here’s your weekly reading list:

1. T2Impact’s Timothy O’Neill-Dunne tries to judge who’s right in the airline merchandising row.  Spoiler Alert: it ain’t the BTC.
2. American Airlines is trying to make GDSs, distribution channels to embrace XML in order to access ancillary services, which otherwise can’t be done prior to arrival at the airport.  However, American insists there will be no incremental costs to book via the direct connect channel.  GDSs probably don’t want to have to work through Farelogix, but also don’t want to modernize their feeds from EDIFACT to XML on a supplier-by-supplier basis.
3. Redmonk’s James Governor explains how VMWare isn’t getting into the relational database business, but that doesn’t mean they’re not in the database business.
4. First broken by BusinessWeek, it looks like Google is going to buy ITA Software for more than $1B, fully ushering in Google to the travel meta-search game (which they’re kind of in already with their recent integration of hotel results into Google Maps.  If this is true, it’s not good news for Kayak.com nor for Microsoft’s Bing Travel, the current leader in meta-search who also leverages ITA’s technology.  Good analysis on the rumor from Tnooz.
5. Altimeter Group’s Jeremiah Owyang breaks down the announcements from Facebook’s f8 conference.  Also check out Robert Scoble’s take on Facebook’s Ambition.
6. Does HTML 5 Herald The End Of RIA Plug-Ins? It’s behind the Forrester paywall, but I wanted to share it anyway.  It’s a pretty good analysis that separates the hype behind HTML5 from the reality that a lot of people have invested in RIA platforms and that HTML5 is still an emerging standard and therefore it will take a while to kill of RIA platforms like Flash.  However, the analysis doesn’t really take the rise of the mobile Internet.  I think it’s a pretty big miss and could act as a tipping point in favor of HTML5, but we’ll see.
7. HTC passes on Palm Buy. Not many options left. Lenovo? Motorola? Dell? My decision to by a Pre last summer is looking worse and worse.
8. Blippy offers a lame explanation of how credit card information ended up on Google. The “it’s less bad than it looks” line is the sort of non-apology apology that I have grown to expect and loath from companies and celebrities. What I’d like to know is whether Blippy went through PCI-DSS certification or if they even know what that is.
9. Apple tries to take over the travel industry next.  Great writeup by PatentlyApple.  But I’m not sure NFC will play as central as a role in reality as it does in the patent application.
10. 2 great posts by Don Dodge on what makes successful startups here and here.  Really nice to see him getting back to good content rather than shilling for Google.

Back from a quick trip to Miami for a sales call (I know, it sounds terrible). But here’s what I found interesting and hope you do too. In a tip-of-the-cap to Spinal Tap, I’ve taken the list up to 11 for this week:

1. Excellent article by Timothy O’Neill-Dunne on how technology is transforming the travel industry
2. PhoCusWright Connect take on Hotel Prices on Google Maps. The entry of Google into meta-search (even if they don’t want to overtly call it that just yet) is an interesting development.
3. RedMonk’s James Governor drinks Microsoft Kook-Aid at MIX?
4. TechCrunch reports that Google is going to incorporate Adobe Flash in Chrome OS.  The enemy of my enemy is my friend, even if I think what the new friend is doing is stupid.  The headline says it all.  I’m not sure what sane reason Google has for changing its stance as the leading advocate for HTML5 to embracing Flash. To say it’s about choice would be a trite answer.
5. Marc Benioff is becoming something of a guest-poster-in-residence on TechCrunch. His latest post is about how he feels the iPad is going to lead a revolution in how people interact with technology.
6. Great article by Enterprise Irregular Paul Greenberg on the state of Social CRM
7. Interesting study on the performance of the Top 45 UK travel sites. Not terribly surprising that customer service is weakest link, but also telling that the steps after search…that is the part when people actually look to book…otherwise known as the part where travel companies make money…perform weakest.
8. European LCC EasyJet wants to add booking options over Facebook.  Would you book an airline over Facebook? Or maybe the right question is: “Are there any reasons that you wouldn’t book a flight on Facebook?”
9. Lawson to offer ERP on AWS instances.  A big step from a company whose CEO Harry Debes predicted SaaS was a fad just 2-3 years ago.  Still this is not SaaS, and only Cloud-ish (it’s single-instances on the Amazon Cloud; doesn’t significantly change the game on pricing or upgrades), but a baby-step in the right direction.  Basically it seems that Lawson wants to provide hosted solutions, but doesn’t want to invest in its own datacenters. Much better analysis from industry pundits Vinnie Mirchinani and Frank Scavo.
10. What brand of Freedom Would you Like? Apple’s or Google’s? Seems to me that at least Apple’s pretty straightforward with their approach. Google? It’s a little more murky.
11. Bonus Round: Forrester analyst John Rymer’s take on the future of app servers.

Sorry for the delay in posting, but I’m been flat out here in India as I am getting further up to speed with my new role at Ness Technologies Software Product Labs. Now that the excuses are out of the way, let’s get to the Top 10.

1. I’d be remiss if the first one out of the gate wasn’t the public announcement of Ness SPL’s relationship with travel IT giant Amadeus.  For the past year Ness has built an engineering team in Bangalore, supporting Amadeus’ continued investment in building industry leading software products for the travel industry.  It also signals Ness’ focus on providing software product engineering services to the travel industry.  If we can deliver for Amadeus, we can deliver for anyone.  Call me!
2. GM’s Augmented Reality Windshield: This is potentially very cool. Nice that it can highlight road signs, but better if it could superimpose hi-fi versions of signs I can’t see clearly.  Also the ability to check out where the drivers eyes are looking could be potential liability issues for drivers who crash while texting, dialing or otherwise distracted.
3. Google May Leave China on April 10. I can’t imagine they want to really do this, but their public stand has kind of boxed them in a corner.
4. Priceline Introduces Pay-at-Checkout for hotels.  I guess I didn’t realize that with online travel agencies (OTAs) that you had to pay the hotel fees at the time of booking.  I guess I never booked a hotel through an OTA because this seemed like standard operating procedure.
5. Musings from the Mobile Upfront: Recap from Mobile Upfront and insights from mobile guru @tgruber
6. Security Risks of Multi-tenancy.  Just goes to show that architecture in the wrong hands is dangerous and usually that’s at the core of bad software.
7. Cloud killing the enterprise software market? Hold that thought. I agree that there will probably be a lot of private/hybrid-cloud implementations, although don’t believe that’s a very good strategy, other than trying to recoup existing infrastructure investments.  It’s one thing to get leverage from what you already have, but let’s hope that few are actually thinking about buying a bunch of hardware to build-out new private cloud infrastructure.  This makes me think back to a post from last summer: Who will be the first to offer cash for infrastructure? I still think it’s a good idea.
8. Why RedMonk’s @sogrady is against patents – the system is broken.  But what if the system could be fixed. Then again this is an awful lot like tort reform. Too many special interests to make it happen and too many frivolous lawsuits/patents.
9. Webciety and Enterprise 2.0: A snapshot of today’s social computing conversations.  Notes and perspective from CeBIT on the opportunities and concerns about E20 by the one and only Dion Hinchcliffe
10. Enterprise 2.0: efficiency, effectiveness, blame and responsibility.  More good hard truth from Dennis Howlett.

Well I finally attended my first unConference. Last week I went to CloudCamp Boston at Microsoft’s deftly named NERD Center (New England Research & Development) in Cambridge, MA. I wasn’t quite sure what to expect from the format or the quality of the content. On balance, I’d say it was worthwhile attending. The unConference actually directly followed a real conference (Xconomy Boston’s Cloud3 Forum), so I’m not sure if that had any impact on the content or quality of what was presented at CloudCamp.

I will say that I was pretty disappointed in the first half of the session which began with (thankfully) short sales pitches by the sponsors. That was followed by an “unPanel” where self-proclaimed experts picked from attendees in the room answered about a dozen questions from the audience. Unfortunately, not everyone who went up there qualified as an expert while actual experts like Cisco’s Christopher Hoff (@beaker) and Canonical’s John Willis (@botchgalupe) sat back. Additionally, many of the questions were quite pedestrian. This leads me to a pet peeve with a lot of conferences today is that the content is geared towards the great unwashed and doesn’t dig deep enough to people who have the basic understanding of the subject at hand. I’m no architect by any stretch — hell, I haven’t programmed a damn thing since a Fortran class I had in college 20+ years ago — but still found the content too basic. I felt the same way about the Inbound Marketing Summit this fall, although I do think it went a little deeper.

The second half of CloudCamp where the attendees broke into improptu breakout sessions was a lot better. The highlight for me was Hoff’s “Cloudifornication” presentation which can be found here (actually this is from the Microsoft BlueHat conference this summer). Anyone interested in the security implications of moving to the Cloud should watch. Any anyone who has line-of-business responsibility for building or consuming Cloud apps should pass. It’s never fun to know how the sausage is made. Ignorance is bliss.

Finally, let me leave you with an interview that I did with Cory von Wallenstein who is VP, Product Marketing at Dynamic Network Systems.  The interview came about from a question on Twitter by @wisesumo who wanted to know what the company thought about Google’s newly introduced DNS services.  This was my first attempt at consumer journalism.  The video came out great, but unfortunately my tripod sucked and directly afterward my camera crashed to the ground and is now on my way to the factory to see if it can be repaired.  Lesson learned.

There was a lot written in the past few days about the service interruptions with Gmail, so let me add my two cents.  In my mind there was a significant over-reaction to the Gmail Fail, mostly by people who for some reason or another are anti-SaaS or anti-Cloud.  I wish someone would do some sort of psychological analysis of that crowd (are they contrarians, do they fear the impact to their own jobs, uniformed), but that’s not going to be the topic of this post.  While many people made like Chicken Little, I think that most drew the wrong conclusions. I look at it like this:

• Gmail isn’t just personal mail: It highlighted how many people are using Gmail for what they consider business-level communication, not just personal email.  With some what I’ve seen regarding Google Wave, this could be a very interesting development and something I’m sure the folks in Redmond are concerned about.
• There is Value in ‘Commercial-Grade’ Release Processes: There is a flawed theory used in much of the online application world which believes that being in perpetual beta is OK.  It’s not.  I understand the desire to get new products and features out to market right away, but letting your users be your testing team — unless it’s a structured beta — is not the right thing to do.  Software companies need to test their products appropriately before releasing it to clients. There is value to a ‘commercial-grade’ release process.  And it’s not like a structured release process means slow time to market. Agile development methods support rapid releases and are pretty mainstream these days. Speed does not excuse sloppiness.
• SaaS and the Cloud Require a Systems Engineering Perspective. Architecture and application design – not just testing – for performance, scalability, reliability and availability is critical. And note that people always talk about PSR testing, not the “A” for availability, which in and of itself is a big miss in thinking about designing and developing systems that are meant to be used by large user communities in unpredictable ways.  But it runs deeper than that.  SaaS requires a systems engineering perspective. It’s not just the software that gets developed it’s how we think about how that software interacts with the underlying infrastructure and how together they deal with internal and external threats — security vulnerabilities, natural disasters, disaster recovery, etc.

Lastly, some of the people I discussed this with have argued that SaaS or Cloud is a good backup to traditional software systems.  It’s not.  SaaS is a choice…and an alternative to other on-premise software. But you don’t choose an Email or CRM or ERP system as a backup to a separate primary system. Of all the issues around SaaS, integration is perhaps the biggest.  So who’s going to take on all those headaches for a something they plan to never use?  Nobody.

Software as a Service is one of the big trends in software today. Just ask the analysts:

• Gartner predicts SaaS revenue to reach $16B by 2013
• IDC predicted 40% growth of SaaS in 2009 because of the economic downturn (zero capex, pay-by-the-drink pricing)

Anyway you slice it, SaaS is a big opportunity. As the SaaS market explodes, some software companies find themselves scrambling to figure out how to ride the wave. Many ISVs, facing declining margins and competitive price pressure from SaaS pure-plays, are thinking they need to make the shift. But the transition from packaged software to SaaS is fraught with complex architectural, delivery and support considerations that are very different than a traditional license business model. If you are planning to adopt a SaaS model, consider the following before plowing ahead:

1. Be clear on the business drivers. What are the specific results you are trying to achieve? Beat back the competition? Increase margins? All the other kids are doing it? Once you define your business objectives you can align your architectural and personnel decisions with them.
2. Recognize the architectural trade-offs in performance v. time to market. SaaS or On Demand means different things to different people. Is the application just accessible over the web, multi-instance, or truly multi-tenant? Your choices will significantly impact customer experience, the leverage you get from your infrastructure and the support structure you?ll need to put in place.
3. Understand the impact on your organization. The delivery and support organization needed for a SaaS model is very different. You have operational issues to manage SLAs for network and application uptime and responsibility for maintaining customer data. In what ways will your organization need to adapt?
4. Be explicit about how you intend to execute. Michael Lombardi from the National Football Post has a great saying: “Don’t confuse hope for a plan”.  Developing your new SaaS product requires you to make R&D resource allocation decisions to ramp up the new offering that could impact support for current customers.  Do you have a clear set of priorities to work from?  Do you have a plan on how you’re going to support the customers who are providing you with current revenue?  How quickly do you want your current customers to adopt your on-demand platform and what incentives are you going to give them to get them to move on your schedule…without them explicitly knowing it?  How do you manage this dual development path without blowing your budget?

SaaS represents tremendous promise. A well thought out transition plan and effective execution will ensure that you capitalize on this important trend.