One of the interesting announcements at HP Discover (disclosure – HP covered my T&E to attend Discover) recently was the announcement of HP Converged Cloud Services for Airlines and the HP Passenger Service Solution. I’m a pretty heavy user of airline services and have done a fair amount of consulting within the airline industry so always keep a bit of a watching brief on what is going on in the industry. I was interested in the announcement and spent some time speaking with Rob Drotar, Director of Strategy for Travel & Transportation, about what it all meant.
Essentially it consists of two distinct products that I’ll cover in turn.
IaaS to the Skies
A year or so ago, Airline industry supplier SITA (see disclosure) rolled out an IaaS service for its customers – essentially airline IaaS allows airlines to buy private cloud services on a per-server incremental basis, thus removing capital expenditure impacts of scaling infrastructure from the airlines. With this announcement, HP is following suit by offering a virtual private cloud, an IaaS platform, which is delivered from HPs own data centers. Of course like all good legacy vendors HP is quick to point out the alleged security benefits that come from buying from them – in fairness though airlines are, in my experience, fairly risk averse and hence articulating the security message is important to ensure they feel comfortable with making this buying decision.
More interesting than the IaaS announcement however was the news that HP is offering, by way of SaaS, an integrated airline reservation and travel product. This will be made up of and airline reservation and a departure control product, all bundled up and sold in a pretty compelling way for airlines – on a per-passenger basis – airlines will oly pay for the service when passengers actually fly, and charges will be tied to total passenger volumes.
This is a very interesting play for HP – especially the move to make it truly a utility model and to charge by usage. I can’t help but feel however that it doesn’t go far enough. The way I see it airlines have two distinct drivers, that come from two distinct parts of the business;
- The drive to reduce costs and remove the need for CapEx – driven from IT and finance
- The drive to truly engage their customers, seek incremental revenue, and be part of a conversation across multiple channels – primarily driven by marketing
This product offering clearly makes good inroads on the first problem set, but does little for the second. In discussing with Drotar I talked about my own situation – as a frequent flier with an airline, my details exist in a myriad different internal systems – passenger manifest tools, my individual frequent flier record, a multitude of point solutions for different campaigns, my own self-service portal details etc. The end result of this is an incredibly disconnect situation, and very little visibility for the people interacting with me on a regular basis – I envisage a time when a flight attendant would be on board the plane with a mobile device that had access to my personal data story across all these different systems – while they are all siloed, this cannot occur.
My contention is that to really provide value-add (as opposed to simply cost-reduction) to airlines, the tool of choice would be a customer-centric solution that had the customer as the central hub – all the ancillary functionalities (manifest, passenger records, reservations, campaigns etc) would be tied to this central core. In response to this, Drotar accepted the value in this sort of system, but contended that the reality for airlines is that they have a largely unstructured view on data – in fact different situations would see data sliced in different ways – sometimes from the customer perspective, sometimes from the operational viewpoint (be it flights, ground ops, flight staff loadings and scheduling).
Drotar did say that, for the marketing aspects of airlines work, HP’s analysis tools – Autonomy and Vertica – can be utilized to analyze the multiple streams of customer data, and deliver contextual and personalized services from them – things like a web experience on an airline’s site that is customized for the purchasing history and preferences of an individual customer. This is compelling, and certainly something that airlines should look at – but it clearly doesn’t close the loop between actual operations and customer data.
Essentially my vision is one where the systems used by the two sides of the house – operational and marketing – come together to build efficiencies for airlines, and increase loyalty from customers. HP’s airline service is an interesting start, and one which will help with some short term pain points, but I’m looking to see it extended greatly in the future. If I was to use an analogy, I’d say that airlines today are living and working in a 1.0 world. This product portfolio doesn’t really change that, other than driving some efficiencies internally for the airlines – I’m still waiting for a compelling vision of Airline 2.0 looks like.
(Cross-posted @ The Diversity Blog – SaaS, Cloud & Business Strategy)