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Now it’s kinda scary that a trillion dollar industry is so dependent on what many would consider to be outdated tech.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

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

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.

It’s Tuesday, not Monday, but here’s your guide to the week that was. Hope everyone enjoyed the long weekend and took a moment to remember the men and women who lost their lives in defense of our country (at least those of you in the US).

1. Timothy O’Neil-Dunne divines Google’s travel strategy. Whether he’s channeling Google executives or not, it’s a reasonable and thoughtful articulation.
2. Daring Fireball’s John Gruber provides his reflections on the Apple-Google feud post the I/O conference. The upshot: Great week for Google, mediocre for Apple, not good at all for Microsoft.
3. IBM buys Sterling Commerce for $1.4B. Insight and analysis from Altimeter Group’s Ray Wang. All I know for sure is that the AT&T shareholders are happy to have a pile of cash where an ill-fitting piece used to be.
4. Hmmm. iPad competitors may face CPU shortages and miss the Holiday selling season. And worse (for them) it seems they will try to compete on hardware features rather than user experience. Add to that the announcement that Apple has sold 2 Million iPads in the first 60 days and I sense happiness in Cupertino.
5. Timothy O’Neil-Dunne strikes again, describing his conflicted feelings over the recent ATPCO announcement regarding standards to enable ancillary revenue sales across various distribution channels.
6. Attention Cloudwashers: Ray Wang is on to you. Personally I’m surprised that there’s still so much confusion on the syntax around SaaS and Cloud. But wait until the technical discussions of how to achieve it start. Hoo boy.
7. Lean v. Fat Startups. No surprise that VCs favor the former. The truth is that neither works unless you have strong management.
8. Excellent, interesting study of transaction processing performance based on different cloud architectures from Amazon, Google and Microsoft.
9. Excellent post by Lori MacVittie to show that while the recent VMWare relationships with SFDC and Google allow you to move your code from one Cloud platform to another, it isn’t the same as enabling cross-Cloud deployments.
10. Google had their week, but Apple’s WorldWide Developer Conference is only a week away. The first major rumor has begun with the possible revitalization of Apple TV. Perhaps it is a hobby no longer.

Well perhaps this week’s installment should be 10 things that happened at Google I/O. It surely dominated the conversation last week. But a few travel items make it as well including a post from FareCompare CEO Rick Seaney. news on Amadeus and Travelport and Google’s Friday acquisition of Ruba.  And in honor of the last episode of Lost, a bonus #11. 

1. Farecompare’s CEO breaks down the airfare pricing rules that seem to make no sense to the average traveler. And it’s just getting harder to make any sense out of it with all the airline fees (or as they call it ancillary revenue).
2. Bob Warfield talks about the huge lead that Amazon has in the Cloud derby and the barriers of entry that they’re creating. However, the recent moves to integrate the VMWare SpringSource technology into Google and Salesforce’s Cloud offerings should make those considering Cloud/PaaS provider take a second look.
3. Travelport becomes the first GDS to buy a meta-search player. I wonder whether this will be the first of several transactions and how much the rumored acquisition of ITA Software by Google is creating a sense of urgency among the GDSs.
4. Big announcements from Google I/O: the Chrome Web Store, Google Wave ready for launch, the open sourcing of the WebM video CODEC (see next item), Google partners with VMWare for AppEngine.  And that was only day one.
5. Google open sources WebM video CODEC, which may throw a monkey wrench into the H.264 bandwagon.  However, perhaps WebM won’t be royalty-free for long, says AllThingsDigital’s John Paczkowski.
6. Netflix jumping on the HTML5 bandwagon with both feet.  And the Wall Street Journal notes that Apple is winning ground in the fight against Flash. Although much of that gain may be given back in light of Froyo and other announcements from I/O.
7. On its face, Google TV looks to be a very big deal. It’s everything that many hoped AppleTV would be.  Although Mashable thought that there’s little here that’s not already in TiVo. But since only about 8 people on the planet own a TiVo, this will be pretty cool to most everybody else. Some think this isn’t so much a shot across Apple or other set-top box maker’s bow, than it is to TV providers.  Here’s some more info, but I’m not sure how much adoption it will see if you still require a cable/satellite set top box.
8. Amadeus making gains with US Travel Agents. Very interesting stats around financial incentives given to travel agents by the GDSs.
9. A good point about the importance efficient software development made on the Ness Software Product Labs blog that I hadn’t really thought about before: Cloud Computing puts a premium on efficient code.  Less efficient code requires more CPU cycles and therefore incurs higher costs in the pay-by-the-drink world of Cloud Computing.
10. Google takes another step on its journey into the travel industry with its purchase of Ruba, the online travel guide and travel community. Ruba’s visual search approach is apparently what caught Google’s eye.  Looks like it will be integrated into iGoogle, at least for now.

And in tribute to the Lost series finale which aired last night…

• A fabulous review of the Apple-Google rivalry by TechCrunch’s MG Siegler…even more so if you’re a “Lost” fan like me.

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.