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Cloud Computing - The Why and How it Benefits Hoteliers

Hotel-Online 3Qs Series on Best Practices in Hotel Marketing and Operations


Roswell, GA – December 5, 2011 The Hotel-Online's 3Qs series continues  its interviews with industry experts on notable trends and best practices in hotel marketing and operations with the topic of cloud computing. Hotel-Online asked Gregg Hopkins, president of Libra OnDemand, three questions about cloud computing and why hoteliers may want to embrace this technology.

Hotel-Online Q1:

In its most basic form what is cloud computing and what are the direct benefits to hoteliers to convert?

Gregg Hopkins:

Cloud computing is transforming the way IT departments deploy custom applications during lean times.  By offering a fundamentally faster, less risky, and more cost-effective alternative to on-premises applications, cloud computing will forever change the economics of hospitality information technology.  Even though we are experiencing one of the most difficult economic situations in 50 years, CIOs must continue to deliver additional business value in the face of consistent budget cuts.  The old models increase complexity and generate additional cost.  IT departments of all sizes are now looking to the cloud to break the cycle.  I find this to be especially true with hospitality IT departments worldwide, as they are reevaluating their strategies and looking for innovative ways to create competitive advantages.  CIOs are redefining their value to the enterprise by looking for new, cost-effective alternatives for application enhancement and development, including cloud computing.

IT projects have always been judged by three financial criteria: initial capital expense, ongoing operating costs, and time to value.  Today, while planning for gradual recovery, IT projects will continue to be evaluated rigorously by the criteria.
 
Many hospitality organizations have already made, or are in the process of shifting to cloud-based solutions.  However, for those that are still on the fence, here are five reasons why companies are betting that cloud computing is the right technology strategy for today and beyond
  1. Delivers faster time to value
  2. Requires no up-front capital expense
  3. Minimizes operational costs
  4. Requires fewer technical resources
  5. Simplifies integration
Hotel-Online Q2:

Is there more than one type of cloud and if so, what are the differences? How does each type fit into the varying levels of hotel sizes and operations?

Gregg Hopkins:

The “cloud” is certainly a popular topic.  It seems that many vendors are touting that their solutions are now “in the cloud” and therefore are offering all the benefits that come with this technology.  But, are they really?  There’s a lot of what I call "cloud washing" in our industry (and others), whereby companies re-label their products as cloud computing, produced by marketing innovation instead of real innovation.  The result is a lot of overblown hype surrounding “cloud computing.”

What, exactly, is this cloud?  Put simply, the cloud is a collection of computers and servers that are publicly accessible via the Internet.  This hardware is typically owned and operated by a third party in one or more data center locations.  The machines can run any combination of operating systems; it's the processing power of the machines that matter, not what their desktops look like.

Cloud computing is a paradigm shift following the shift from mainframe to client–server in the early 1980s.  Cloud computing describes a new supplement, consumption, and delivery model for IT services based on the Internet, and it typically involves over-the-Internet-provision of dynamically scalable and often virtualized resources.  It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet.

The term cloud is used as a metaphor for the Internet, based on the cloud drawing used in the past to represent the telephone network, and later to depict the Internet in computer network diagram as an abstraction of the underlying infrastructure it represents.  Typical cloud computing providers deliver common business applications online that are accessed from another Web service or software like a Web browser, while the software and data are stored on servers.  The major cloud-only service providers include Salesforce, Amazon and Google.

To some, cloud computing might sound a little like network computing -- but it isn't.  With network computing, applications and data are hosted on a single company's server(s) and accessed over the company's network.  Cloud computing is a lot bigger than that. It encompasses multiple companies, multiple servers, and multiple networks.  Plus, unlike network computing, cloud services and storage are accessible from anywhere in the world over an Internet connection; with network computing, access is over the company's network only.

The key difference between network computing and cloud computing is the cloud itself.  The applications and data served by the cloud are available to a broad group of authorized users using different operating system platforms via the Internet.  It isn't apparent (and, in most cases doesn't matter) whether cloud services are based on HTTP, HTML, XML, JavaScript, or other specific technologies; to the user, the technology and infrastructure behind the cloud is invisible.

In short, cloud computing enables a shift from the computer to the user, from applications to tasks, and from isolated data to information that can be accessed from anywhere and shared with anyone.  The user no longer has to take on the task of data management; he doesn't even have to remember where the data is.  All that matters is that the information is securely in the cloud, and thus immediately available to that user and to other authorized users.

Hotel-Online Q3:

Data security being of utmost importance, how is cloud computing more secure and what are the drawbacks if any?

Gregg Hopkins:

The loss of any data that you maintain, particularly if that data contains information subject to regulatory control (credit card numbers, etc.) carries a certain amount of risk if that data were to be lost, damaged or stolen. It's the same as if you had inventory lost, damaged or stolen. As you accumulate more of that data, the risk of loss goes up as well.  To reduce this risk, you should consider a cloud-based solution. Salesforce.com utilizes some of the most advanced technology for Internet security available today. When you access their site using industry standard Secure Socket Layer (SSL) technology, your information is protected using both server authentication and data encryption, ensuring that your data is safe, secure, and available only to registered Users in your organization. Your data will be completely inaccessible to your competitors.

The other element about data is the amount technology vendors charge their customers to access the customer’s own data.  This baffles me.  It’s your data and you should not be charged anything additional for using it.  It’s not like it’s the vendor’s own proprietary database.  Most likely it’s Microsoft, Oracle, SyBase or some other flavor.  And, the copy and exporting of the data is not effecting the vendor’s application. I feel that this information should be available to be freely exported to another system so that it can be analyzed and used effectively. Or better yet, the information should be exchanged between the vendor application and external solution.  If this is the case, I fully support charging the customer for this integration.

Effectively collecting, analyzing and securing all your customer data is as important as ever to your organization’s success.

About Gregg Hopkins
Gregg Hopkins has over 30 years of experience in hospitality management and technology. He has worked with and for a wide variety of leading enterprise property management providers, central reservation system providers, and online travel agencies. He has also provided consulting services to hospitality organizations on reservations, electronic distribution, e-commerce, CRM initiatives, sales, marketing and business development. Gregg is a subject matter expert and speaker on hospitality management systems, CRM, Cloud technologies and social media for the hotel, travel, entertainment and gaming industries. He also participates as a committee or board member of several hospitality associations. Gregg can be reached at ghopkins@libraondemand.com.

Please note that the opinions expressed above are not necessarily those of Hotel-Online. We welcome your feedback and suggestions for future topics.

Contact:

Michelle Renn
Editor, Hotel-Online
michelle@hotel-online.com
678-802-5308


Previous Hotel-Online 3Q's

Introducing Hotel-Online 3Qs Series on Best Practices in Hotel Marketing and Operations: How an Industry Expert Sees It: First Up, Max Starkov / November 2011

 
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