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CIOs take new look at sharing IT infrastructure, apps

Thomas Hoffman | Aug. 28, 2009
The idea of IT services shared among industry rivals isn't new, but attempts to establish them have a spotty track record.

FRAMINGHAM, 26 AUGUST 2009 - The world's top hotel companies have collectively invested tens of millions of dollars to implement their own customized reservation systems--considered the heart of their operations. Each hotelier views the capabilities of these systems as providing them with some competitive advantage over how they calculate rates and room availability.

But the transaction-processing side is considerably more mundane than the algorithms that put individual guests in rooms. While the hoteliers aren't quite at the point of viewing hotel reservations as a commodity service, the potential cost savings that could be gleaned from the creation of a shared, industrywide system is enough of an enticement to have brought the CIOs from these companies together to explore the possibilities.

During the past six months, board members for Hotel Technology Next Generation (HTNG)--a global trade association of hoteliers and technology companies that includes Starwood Hotels & Resorts Worldwide, Marriott International, Hyatt and InterContinental Hotels Group--have been actively discussing possible areas for shared services among participants, including shared property management systems, reservation systems and networks.

"It's a preliminary discussion right now," says Tom Conophy, CIO for global IT at InterContinental Hotels Group in Atlanta. "But there is a desire to explore where you can share infrastructure or applications, like financial apps, that are less competitive from a guest point of view."

"It's a great example of an untapped opportunity in the hospitality industry," adds Todd Thompson, CIO at Starwood. He believes that a shared hotel reservation system will eventually evolve, likely with one or more tech vendors making their systems scalable enough for use across many major hotel companies by offering them as a shared service.

Interest among CIOs in sharing software applications, IT infrastructure and services such as server and storage capacity isn't limited to the hospitality industry. For instance, discussions are underway in both the real estate and insurance industries, where interest among larger companies to host vertical applications for smaller organizations is "red hot," says Rob Scott, managing partner at Scott & Scott, a Dallas-based law firm that specializes in software licensing.

In May, 25 of the nation's top research universities convened at Indiana University to explore the potential for sharing a range of IT services, infrastructure and software applications, including mirrored sites for disaster recovery, high-performance computers used for research, large-scale storage systems, Web hosting and help desk operations, says Jerrold Grochow, vice president of information services and technology at the Massachusetts Institute of Technology.

The idea of IT services shared among industry rivals isn't new, but attempts to establish them have a spotty track record. Previous initiatives, such as an effort in the early 1990s to form a shared travel reservation network called Confirm was started but never materialized, though it was backed by Sabre Holdings, American Airlines and a few other travel industry players. Others have prevailed, including SITA, a provider of air transport communications and IT systems that was owned and operated by members of the air transportation industry.

 

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