Observations from the NBTA convention

Last week's NBTA's annual convention was billed as the biggest and most successful travel management conference ever. A common question I was asked while roaming the tradeshow floor, "What do you believe was the hot topic at this year's conference?". My response was simplly stated "nothing really new here". In reality I believe more was left unsaid then presented in any particular seminar or general session. For example, Sam Gilliland, CEO of Sabre, presented a panel of ex-airline execs who chatted with Peter Greenberg. I really wanted to know what the private equity buyout of Sabre means to the industry not to mention the Travelport acquition by Blackstone and the recent IPO by Orbitz. Instead the two airline executives talked about the need for high speed rail for the NorthEast corridor (DOH!). A familiar theme in Sam's introduction speech was "you the corporate travel manager, really controls the industry", but is this really true?

Perhaps the problem with this conference is that the position of corporate travel manager is a moving target. This week, I have been updating my NBTA database from 2004 and I immediately noticed about a 70% turnover in names just for the letters A and B! Could it be that the coveted target of the suppliers at the conference is a moving one? Is the position of travel manager a long term career? My apologies to my friends and colleagues who have been in their role for many years, but the reality of the market is that at an average company a new travel manager emerges after about 4-5 years. Why is this? Corporate travel management is not a core competency of any organization (except TMCs that is). There is little room to advance in the position other than adding more commodities to the role if the the CTM is in procurement (as many are moving towards) or moving to other positions in the company. So if I were to conservatively estimate that 50% of all travel managers turnover in a 5 year period, marketing to these individuals becomes a constant re-education effort. No wonder the conference lacks innovation, there are so many newcomers to the position every year, it is nearly impossible to move to start a more forward thinking dialogue.

CorporateTravel Technology Today and Tomorrow

I am pleased to announce that my most recent corporate travel study: Corporate Travel Technology: Today and Tomorrow is now available for a pre-published order with a discount of $100 (purchase price is normally $600, pre-publication price of $499). In addition if you are attending the NBTA show next week you can receive an additional $100 discount if you order the study by August 31, 2007. The study will be released in mid- late August 2007. This research is the result of intensive review of products and services offered in the corporate travel space. You can check out the table of contents here and purchase the study through the TTCI or PhoCusWright stores.

Here is a link to the flyer we are distributing at next week's NBTA conference.

I'm Back....

My apologies to my loyal blog readers. I was on vacation in Israel for most of June and I have been on the run finishing up various projects since I returned. A couple words of advice concerning travel to Israel. My family and I felt extremely safe during our stay. Don't let the US media make you believe otherwise. As the birth place of three of the world's major religions, visiting Israel is like no other experience. That being said we did have a slight mishap while enjoying the Dead Sea. My cousin's rent-a-car was broken into and about 1/2 our luggage (all the luggage we had with us) was stolen. This included our passports. Though Israel is very safe, personal property is not, especially in remote areas where Bedouin's live. I am sorry to report, per the Israeli police, that the Bedouin's main source of income is theft. So if you do travel to Israel and see a Bedouin wearing a Steely Dan t-shirt, wearing my wife's skirt listing to my son's IPOD, let me know! In reality personal possessions can be replaced. BTW if you ever do lose your passport in Israel I would recommend the consulate in Jerusalem rather than the Embassy in Tel Aviv. They were extremely helpful in getting us temporary passports.

I realize a lot has been happening over the last month in both travel and technology. I hope to make up for lost time this week with a number of entries.

Working with 3rd party software developers

I found it interesting that two prominent software companies (if you can call a GDS a software company) one within the travel industry, Sabre, the other the poster child for social computing, Myspace, have both recently come out with rules (or lack of) regarding 3rd party software developers that hook into their systems. In the case of Sabre, there has been a lot recent press around the new fees Sabre is now charging 3rd party applications such as Booking Builder. For Myspace the issue is one of widgets used by third parts to embed content inside their site. The most common example is Youtube whose growth as a company's was significantly driven by MySpace.

In a recent blog entry by Josh Kopelman, Managing Director of First Round Capital (which was also carried on the Always On Network), Josh compared MySpace's lack of a clear "widget road map" to that of Prodigy. "This brings back memories from the early days of the Internet, when companies like Prodigy and AOL were the only online services in town. Despite the launch of the web browser (which unleashed the creation of millions of web sites), AOL and Prodigy initially focused on maintaining their proprietary online environment and controlling everything on their site." "Myspace does not have a formal development program and has blocked several widgets , (and) built their own widgets to compete in certain areas." In contrast, Facebook, Myspace's chief competitor has announced a new development platform encouraging 3rd party applications that work with their site.

Though I recognize that contrasting Sabre's actions to that of Myspace is a bit of an apples and oranges comparison, but the end result is similar with each company trying to protect what they perceive as their proprietary competitive advantage. Like Myspace, Sabre is blocking some third party development , while promoting their own alternative tools (based on Agentware). Hopefully one of the other GDS (Galileo, Amadeus are you listening?) will learn from the Myspace / Facebook battle and take an opposite stance from Sabre, promoting and supporting 3rd party development tools.

Digital Public Space Advertising

I am fan of the 2002 sci-fi movie Minority Report. In the film Tom Cruise is bombarded by digital advertising as he walks through a crowded mall. The ads are triggered by a retina scan personalizing the offering to respond to the character's specific needs. (In the case of the film, Tom Cruise actually replaced his eyes with another character's so the ads reflect that person's preferences).

A recent article in Always On talked about the emergence of adverting in public spaces such as NYC taxi cabs. Combining that with the growth of Behavioral Targeting, the world described in Minority Report is rapidly emerging. Each generation has become more desensitized to the onslaught of media. My 16 year old son is perfectly happy doing his homework, responding to multiple IM messages all while listing to his favorite tunes. I have no doubt that his current ability to manage multiple media inputs will allow him to handle the coming onslaught of personalized advertising. The growth of public space advertising over the next 5 years will be dramatic.

Desktop tools

I met some representatives from OTOlabs at the recent TravelCom conference in Las Vegas in April. Desktop tools such as the Southwest's DING! application have clearly proven their value in creating a more intimate relationship with customers. OTOlabs' is the developer of ThinkDesktop applications such as Vail Resorts' SnowMate. I worked with Vail Resorts (as part of a PhoCusWright engagement) back in 2005. The SnowMate application is a critical tool Vail has successfully used to bond with their best customers. The Southwest DING! application had over 1 million downloads the first six months. Southwest delivers daily messages on special promotions to the desktop of millions of customers reinforcing their image as a low fare leader and bonding the customer to the Southwest brand.

I am a strong believer that providing a small desktop application to deliver personalized information to your customer is an essential component of a Travel 2.0 strategy. To my surprise the OTOlabs folks indicated that other airlines have been very slow to embrace this concept. This is truly baffling considering the transparency of the Web and desire of airlines to develop a closer bond with their best customers.

Service Oriented Architectures

A lot has been written over the last three years about the topic of a service oriented architectures (SOA). The concept refers to a more flexible way to create software using Web services. Rather than creating tightly coupled code that bounds specific functionality within the application, software written using SOA principles creates loosely coupled components that can easily be removed or altered without impacting the entire application. "SOA turns monolithic inflexible applications into hundreds, even thousands of small flexible applications" Gartner research estimates that by 2008, more than 60% of enterprises will use SOA as a “guiding principle” when creating mission-critical applications and processes.”

Understanding the underlying architecture of software has always been a difficult task for a variety of buyers in the travel value chain. Whether it is a corporate travel manager evaluating self-booking software or a leisure travel agency looking at reservation technology, the need to evaluate the underlying software architecture has never been greater.

Often vendors confuse the issue by stressing their use of Web services. Utilizing Web services to connect to disparate sources of content has become the norm in the last 3-4 years. Just because an application uses Web services for connectivity does not mean the software has been written using a SOA approach. As an example, a major hotel chain still uses a mainframe running TPF (an old operating system created by IBM for the GDS) as their central reservation platform. The company has created a Web services layer to aid in the communication with property based system and external channel distributors. This is obviously a good use of Web services but does not reflect a service-oriented architecture. If this chain wanted to do a complete revision of their rate structure, the antiquated mainframe approach would lead to a nightmare of programming tasks. If this application was built using SOA, an overall rate revision would be done with less pain, implemented faster and would not disrupt other modules of the reservation process. Unfortunately for this supplier, SOA theories were not around in the 1970's when the core reservation system was built.

Wireless Travel Applications

Last week I was interviewed by USA Today Weekend regarding mobile technology for the traveler. The premise of the call was focused on the prevalence of IPODs among travelers. The reporter asked some specific questions about downloading audio blogs for use by leisure travelers. The obvious application would allow the provider to segment the traveler population into special interest groups. A guided city tour for a history buff may be quite different from a couple looking for gourmet restaurants. Our conversation went beyond this point to encompass all types of gadgets now carried by frequent leisure or corporate travelers. I mentioned that last year I wrote an article for the PhoCusWright GDX technology subscription service on the hotel room of tomorrow. A common theme within that article is the emergence of multi-media stations in hotel rooms where travelers could hook up their MP3, digital camera or laptop and view the content on new HDTV sets. As always I am interested in any new application being deployed by travel suppliers or intermediaries that enhances the travel experience. If you know of some interesting apps, please let me know.

Web 3.0

First let me apologize to my blog readers for my long absense. I have been juggling a number of different client projects working long hours (which I know is the norm for today's 24/7 business environment). Fortunately three of the projects are closing out this week so I am back.

Lately I've been seeing a number of articles describing Web 3.0. Is Web 3.0 just another buzz word fueling the pundits and press or does it have some substance? One fallacy that is perpetuated by buzz words such as Web 2.0, 3.0 is the impression that the introduction of new technologies and approaches happens all at once negating prior technologies. In reality technology change is evolutionary. For example adding an improved consumer UI using AJAX or Flash to a Travel 1.0 platform may change aspects of the application to be more engaging, but it doesn't necessarily mean that the software is Travel 2.0 throughout its underlying code.

So what is Web 3.0? A common mantra expressed around Web 3.0 is that software will be more pervasive, faster and cheaper to deploy. Web 3.0 applications will understand the semantics of Web sites enabling new levels of machine-to-machine communication. Personalization will filter information to deliver information that is more relevant to the consumer delivered on the device of there choice. Information itself will be dynamically generated reflecting the needs of the supplier to sell perishable inventory. With the travel industry still struggling to integrate Web 2.0 features and functionality (e.g. user generated content, new UIs using AJAX or Flash) the arrival of Web 3.0 will likely take some time to manifest itself in travel applications.

O'Reilly ECT Day #2- Incantations for Muggles: The Role of Ubiquitous Web 2.0 Technologies in Everyday Life

The talk began with this basic premise: How do you balance needs of the users with emerging technologies? The goal of the talk was to use different lens on emerging tech and end-users. The backside of technology development is people. How to segment people which are not like "you" - don't design for oneself or one size fits all. There are four life stages each with a different set of properties- stage one - friends, attention, play/leisure, sex, consumption; stage #2 - Sex, friends , money , play/leisure, labor; stage #3 - labor, family, money, power, property; stage #4 - family, health, religion, hobbies, friends. technology adoption and priorities reflect these four life stages. Corporations are currently driving technology. Corporations need to satisfy shareholders reflecting continuous growth. To monetize the interaction people the user must be passionate about the technology. Unhappy users don't make products stick. Four aspects of modern technology: persistence (never goes away) searchability (ability to find what you want), replicability (what is truth?, the ability to copy), Invisible audiences - (don't have a sense who is in the audience- you don't know who your are talking). All rules of privacy is changing. When things really go mobile will create a new shift in practice - combining location and technology.

O"Reilly ECT - The Coming Age of Magic -Mike Kuniavsky, Co-founder and Principal, ThingM

Ubiquitous computing is moving away from traditional platforms (PC, PDA, smartphone) to include non traditional platforms such running shoes. In 1995 General Magic designed their wireless handheld interface as a desktop. This interface had limited functionality partially due to the desktop metaphor. Extending the desktop metaphor to a wireless device doesn't work with ubiquitous computing. Mike is advocating the use of existing cultural understanding (magic) to describe the behavior of ubiquitous computing objects. Design principles- every day objects (shoes, hammers, hats, plates), they are familiar, physical, no screen , not human, not superhuman, reinforcing the fact that we don't believe in magic. Ambient orb from Ambient Devices looks like a crystal ball. the Nokia medallion - allows communication. Wands (Nintendo Wii), Hitachi Magic wanted. Concept of wands already exists based on embedded technology. The move towards "magic" devices is already happening. The age of magic is coming. Using the magic metaphor should not be an excuse for poor design.

Jeff Hawkins

Jeff is the original founder and designer of Palm. He described human function and how his new company Numenta is developing next generation for intelligent computing. Jeff stated that you can’t get computers to act as humans- visual perception, auditory perception, somatosensory perception, Languages, Adaptive behavior, planning, thinking etc….

What is preventing this? Common wisdom believes:

• Computers are not powerful enough - no longer the case

• Brains are too complex to understand
  

• Brains work on quantum principles
  

• Brains are magic

Reality is not too complex, don’t work on strange principles and we just didn’t understand how they work.

Hierarchical Temporal Memory (HTM) –

1) Creates a model of its worked

2) Recognizes new patterns

3) Predicts

Generates behavior Numenta Platform for Intelligent Computing (NuPIC)

Simple vision system –

HTM applications areas of focus:

1. Automotive
2. Gaming
3. Network modeling
4. Drug discovery
5. Vision systems
6. Market analysis
7. Business modeling
8. Nurture applications
9. Anything requiring prices timing or high order temporal data
10. Music
11. Language
12. Robotics

Werner Vogels, Vice President & Chief Technology Officer, Amazon.com

Mr. Vogels is the VP and CTO of Amazon.com. His talk focused on how Amazon has created an the backbone which can enable small start-ups to reach scale by using the Amazon's infrastructure. The talk centered around how to build a business around ideas verses resources. Amazon services is designed to help a launch new businesses. Building an architecture to deal with peaks 3-4X the average daily transactions is difficult. The 70/30 switch 70% on heavy lifting (infrastructure) and only 30% time investing in actual product development. Amazon chart - service oriented - 150 services together to create a single page. Three parts of infrastructure = EC2 - Compute, S2- Storage - SQS which does Messaging= Web scale computing. Web-scale computing turns huge fixed costs into a variable cost. scalable-increase or decrease capacity impacts cost Effective - low rate pay-as you-go, Reliable and Simple- SOAP and REST based computing. Simple storage service 15 cents per Gigabyte per month and 20cents a GB data transfer. Why can't the GDS follow this model. Rather than owning the transaction, how about owning the infrastructure?
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VC Forum - Web 2.0 and Wall Street

Panel with Tim O"Reilly and William H. Janeway, Vice Chairman, Warburg Pincus and
Peter Bloom, Managing Director, General Atlantic LLC. What can Web 2.0 learn from the financial markets and visa versa? Attributes of Web 2.0 demonstrated on Wall Street. Speed matters. e-Trade strived for a 9 second trade. Average trade on NYSE is now 30 milliseconds. A thousand transaction a second have become the norm. How does this compare with travel transactions which is measured by 2-3 second response time? Web 2.0 economy - network intelligence phenomenon. Focus on transactional efficiency. The pressure of Wall Street to push down the cost of transaction cost down to zero. Profits as "agents" was no longer possible (sound familiar?). Those who had been agents became traders. This is just like a GDS becoming a travel agent (e.g. Travelocity). Now promoting marketplace based on automated trading systems. Technology turning agents into principles. The interaction of computers and human beings. Now computers trade with each other but are shut off switching to human trading during a major drop.

Jeff Jonas - IBM Chief Scientist

Using an story of a cheating Vegas dealer illegally working with a customer to illustrate how data silos don't interact, Jeff introduced the concept of "Enterprise Amnesia". In this story the dealer and customer share a common address - clearly a signal that something is wrong. "Enterprise Amnesia" is when marketing, HR an security departments don't share a common database. Enterprise Intelligence requires persistent context. Data and queries in a single data space. Federated search - just in time context.

Sequence neutrality - identifying the same customer in a database. Database drift is natural and the bigger the wearhouse the more this problem persists.

Live from the O"Reilly Emerging Technology Conference

I am blogging today from the O'Reilly Emerging Technology Conference in San Diego. In 2006, my friend and colleague Philip Wolf coined the phrase Travel 2.0 to describe the new focus on user-generated content and improved user interfaces in online travel. To all deference to Philip, it was Tim O"Reilly who actually coined the original Web 2.0 phrase to describe the user generated and interface changes that is impacting the entire technology industry. Attending pure technology conferences such as this one, always reinforces the fact that the travel industry continues to lag behind the general tech curve. I will be blogging all day on each topic covered: The agenda can be found here.

After the opening remarks, the first speaker is Jeff Jonas, Distinguished Engineer and Chief Scientist, IBM Entity Analytic.

New Joint Study with PhoCusWright

In an effort to answer my prior blog entry regarding the commodification of self-booking technology, I am pleased to announce a new joint research study with PhoCusWright. As most of you know I have a long association with Philip's organization as an analyst and subcontractor on multiple projects over the last 6 years. In 2003, we jointly published a study on Dynamic Packaging technology. In a similar fashion this new study will look at corporate travel technology trends particularly as it relates to the implementation of Travel 2.0 technology. We are targeting late May- early June for the publication. It will be available as part of the PhoCusWright Channel as well as available both at the PhoCusWright and Travel Tech Consulting online stores.

Here's the abstract:

Abstract: Traditionally the corporate travel market has lagged in the adoption of emerging technologies. Despite this fact, technology for self booking, corporate portals, meetings management, business intelligence, expense management, risk management and the aggregation of content has become a key part of the travel management process. Services, such as consulting and account management also depend heavily on technology for analysis and support. With the emergence of Travel 2.0 technologies in the consumer market, how are corporate providers reacting to these trends? This study will take a look at key TMC and corporate travel software applications reviewing current functionality with an eye on future development. The research will showcase unique product offerings from software developers and TMCs reviewing vendors' plans for adding Travel 2.0 features such as user generated content and rich Internet UIs using technologies such as AJAX.

The World is Flat

In his 2005 book, The World is Flat, Thomas Friedman describes the unplanned cascade of technological and social shifts that effectively leveled the economic world, and “accidentally made Beijing, Bangalore and Bethesda next-door neighbors.” I experienced this phenomenon first hand recently evaluating suppliers for a consulting engagement. When it came down to the short list of suppliers that met this DMO's requirements, two companies emerged providing the best fit for my customer's needs. Both of the companies have headquarters in the US, but have approximately 90% of their employees in Asia (India and Sri Lanka). Over last two-three years the majority of travel software companies have either outsourced part of their development to off-shore centers or formally opened branches in places like Bangalore or Saint Petersburg. Eastern Europe and Asia are not only catching up fast, but are quickly passing the US in highly skilled software engineers. To better understand the global impact of the flatting of the world phenomenon take a look at this video: http://www.scottmcleod.org/didyouknow.wmv

Are corporate self booking tools becoming a commodity?

I have been involved with corporate self-booking tools since their inception in the early 1990s. At that time companies such as TravelNet and TTG (now TRX) pioneered a new concept allowing business travelers to book online, but restraining their activity through policy enforcement. Now in 2007 where corporate booking tools have become a mainstream part of a good travel management program, innovation has stalled resulting in a common look and feel across vendors. Many of the corporate tools have embraced the familiar consumer matrix approach pioneered by Orbitz (and quickly copied by Expedia and Travelocity), but other emerging trends are slow to come to the marekt. This is in contrast to new consumer oriented Travel 2.0 companies such as Kayak, Farecast and Farecompare are who are blazing new territory incorporating tools such AJAX and mash-ups to change the stale booking flow common on the big OTAs, but what about the corporate market? Where is the next innovation in corporate tools? My belief is that innovation has already begun and lies in the underlying platform rather than the UI. Yes corporate tools should embrace drag and drop capabilities enabled by AJAX, but at the end of the day you still need to enter your dates, select your flights, hotel and car. How these tools integrate disparate sources and user generated reviews and content will be a space to watch in 2007.

Mobile Photo Sharing

M:Metrics released some detailed stats on 3G usage that should raise a flag for all in the travel industry. If you don't know, 3G refers to the third generation wireless networks that provide more features and faster speeds than 2G networks. What caught my eye was the stat which concerns photo-sharing, which skyrockets to 45.1% monthly penetration among 3G users, up from 17.1% of non-3Gers. The bottom line is that next generation cell phone users are increasingly depending on their camera phones. What does this mean for the travel industry?

If you combine the growth of user generated content with this increased photo-sharing usage, the picture should be clear. Travel suppliers, especially hoteliers, need to be sensitive to the fact that an upset customer will not only blast the hotel at review sites such as Trip Advisor or IGUGO, but will increasingly use their cell phones to document short comings of a property augmented by real- time pictures posted to blogs or photo-sharing sites such as Flickr. The old cliche that a picture paints a thousand words says it all.