Hotel Online Special Report
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From the Hotel Property's Perspective;
The Network Computing Alternative
Special Report
 
By Richard M. Brooks, CHA, BridgeStreet Accomodations, Inc. - Spring 1999

Advances in network technology over the past few years have created an opportunity for companies to consider a new alternative for their computing needs.  The use of wide area networks to connect company locations around the world has been in very limited use for many years.  The most common example for these networks is hotel central reservation systems.  Property management systems and accounting systems, the two most commonly used software applications in hotels, have mostly been property based, using minicomputers, local area network servers and desktop PCs as their hardware platforms.  That technology model is changing today, opening opportunities that have not been either technologically or economically possible until now.

Today's Wide Area Network

Today's wide area network is vastly different from networks of the past.  There are many reasons for this, so let me mention just a few.  Data transmission speeds have increased dramatically and the cost of increasing those speeds has significantly decreased at the same time.  T-1 lines, once cost prohibitive to most businesses, are now relatively inexpensive.  In addition, other options such as ISDN lines and "burstable" ISDN which allow even faster speeds have a significant impact on network justifications. Telecommunications networks have been specifically created to carry data instead of trying to push data over voice circuits.  And, perhaps as important as the improvement in network hardware, the almost universal accessibility to the Internet and acceptance of TCP/IP as the network protocol standard, as well as general availability of Frame Relay circuits around the world, has made network computing a reality.  In addition, the sheer brute force power and reduced cost of modern computers, whether they be desktop systems, servers, minicomputers, midrange or mainframe computers has also been a major factor in making wide area networks possible.  With all of this in place, a desktop machine connected to a network server thousands of miles away can have almost the same system speed and response time as if it were connected to a network server in the next room.

Network Applications

Another recent innovation is application software specifically designed for wide area networks.  Perhaps the most innovative developments in this area have come from Citrix Systems, Inc. (www.citrix.com).  They are leading the development of server-based computing, using a relatively new concept called Independent Computing Architecture (ICA).  This architecture is a three-tier, server-based computing technology that separates an application's logic from its user interface and allows 100% application execution on the server.  In other words, the desktop device is simply a window into the Citrix server, which actually runs the program.  Using powerful, but inexpensive, servers linked together as a server farm, the network operates much like a mainframe based system of 20 years ago.  However, there are some big differences.  First, the desktop device can be almost type of workstation.  PCs with as little as 8MB of memory and an Intel 486 chip can use this system.  So can Pentium based PCs, inexpensive Network Computers (NCs) and, perhaps just as impressively, most MacIntosh computers.  In fact, as long as the ICA client can be loaded on the desktop device, it will run the application.  This is a real "thin client" opportunity.  Second, unlike the mainframe-based systems, when a server fails, the other servers dynamically pick up the load.
At the same time, application developers have been creating versions specifically designed to work in the ICA environment.  Although these are just coming to the market place at this time, they are worth serious consideration.  Most developers working with ICA are taking existing, proven applications and modifying them for ICA.  Applications not designed for ICA will not operate efficiently or may not operate at all.  Initial releases of ICA compatible systems are mostly high volume applications, such as accounting, human resources, etc.  However, property management and other systems could be modified to work in this environment with the proper encouragement from our industry.

Case Study

BridgeStreet Accommodations, Inc. is a company provided extended-stay lodging.  Unlike traditional lodging companies, however, we use apartments instead of hotels.  Our average length of stay is 40 nights and we often have hundreds of apartments in the cities we serve.  This inventory can be spread around the entire city.  For example, in the Baltimore/Washington, DC area we have over 500 apartments in more than 30 communities.  The company was founded in January, 1997 and we already have 26 markets in the United States, plus Toronto and London, England.  Most of the growth has been through acquisition of existing companies.  Some of these offices have 15 employees and several have as few as three employees.  Therefore, system expertise is not consistent or available around the company.  We have inherited many different property management and accounting systems, most of which are not Y2K compliant.  Our challenge is to bring every office in our company onto the same set of applications, and do it all before the big ball drops in New York on December 31, 1999.  One additional challenge we face is with property management systems. There are a few systems specifically designed for our type of lodging and they are not designed for multi-city situations.

Our first step was to identify our application requirements.  We spent many hours working with our consultants and individual users from various offices discussing accounting, property management, corporate communications and other requirements.  From that extensive investigation, we identified the immediate need for technology which would provide marketing, property management, accounting and executive level information and decision tools.  We also had to provide this as simply, quickly and economically as possible.

Initially, we knew we would need a network to connect all of our locations.  However, we were actually leaning toward providing on-site servers for each office and software licenses for each location.  Somehow, (we weren't sure exactly how) we would tie this all together through a dial up network at the end of the day.  We also recognized there were some major disadvantages to this approach.  The biggest of these included the need for on site system expertise and the cost of replacing much of the system hardware and software already in place.  In addition, we anticipated a very large software development effort to consolidate information daily and a large staff to support these installations.  Finally, we also recognized that whatever we developed as a sales database needed to be immediately accessible from every office and be updated in real time.

We had two consulting companies working with us.  One team worked on the applications issues and the other team worked on the company wide area network.  This allowed us to take advantage of their individual expertise and also allowed us to validate the recommendations of each.  Both companies worked independently.  An interesting outcome was that both companies identified similar application software vendors and ICA for the wide area network.  The recommendations included developing our own  property management systems.

The result was the selection of the accounting package offered by J. D. Edwards (www.jdedwards.com) that uses ICA and offers a development tool kit so that custom applications can be developed.  With that concept in mind, we discovered that we could develop an integrated accounting/property management system with those development tools.  Network computing requires a high degree of hardware reliability.  J. D. Edwards offers hardware platforms and we chose the AS/400 option because of its reliability, availability of programmers, and easy integration into ICA.  It will also host our corporate e-mail system and offers us the best growth options.

Advantages and Disadvantages

Here are some advantages and disadvantages to consider when investigating network computing.  Our experience shows:

Advantages:

  1. Reduced staff - our initial estimates included the need for three staff members in our operations support group to maintain local area networks in all of our locations and the company wide area network.  Using the ICA approach, we have one staff member responsible for support.  We may have to add a part-time assignment later this year.
  2. Simplified support - with ICA, the software installation, upgrade and support effort is confined to the central computer room.  One process impacts every workstation on the network at the same time.  If we have servers in each location, software installation and upgrades can be very complex.  Updating systems would take a long time, since multiple locations have to be managed, either locally or remotely. 
  3. Reduced cost - in our situation, the necessary upgrade or replacement of hardware and software licenses was a major concern.  We estimated that we would have had to replace approximately _ of our servers, workstations, network software and desktop software if we chose the local area network design.  With the ICA approach, we have eliminated the need for servers at the local level and the need to replace most of our equipment.  The savings exceeded $500,000.  For example, the network computing workstations we are purchasing are less than half the cost of a personal computer.  Yet, on our network, each has all the functionality of a PC.
  4. Years 2000 compliance - with the central system Year 2000 complaint, most of these issues are addressed at one time.  Our investigation showed we had a very complex problem bringing our disparate systems up to Y2K compliance.  With all software operating centrally, Y2K issues are handled only once.
  5. Single point of failure - with the ICA approach, a single point of failure is minimized or eliminated.  For example, if any server or several servers in the server farm fails, the rest of the servers will dynamically pickup the load.  If the network fails, the routers have dial backup capability to reestablish a connection to the central system (although this will be at slower speeds that the dedicated network).
  6. The Internet - network computing can take advantage of the power and availability of the Internet, making the setup of a network much easier and faster than previous networking approaches.
  7. Central database - while the other advantages deal with technology, this advantage (one of the most important from our point of view) deals with information.  Having a central, integrated database has significant competitive advantages.  A distributed database is much more difficult to administer and consolidate effectively.
Disadvantages:
  1. Availability of ICA software  - while ICA has been available for several years (Citrix has offered an earlier versions - including WinFrame) not all software developers have provided versions of their products which use this technology.  Many systems can not use ICA effectively without a version specifically written for its capabilities and intricacies.
  2. Possible network failure - if the network fails, the entire company is impacted.  To minimize this possibility, we took several steps.  First, we use several companies to provide our network services, minimizing our risk if a single network cloud fails.  Second, we have a professional network management company monitoring the system 7 days a week, 24 hours a day.  If any location fails, we are guaranteed 4-hour time to fully restore service.  Third, we equipped each office with dial backup capabilities.
  3. Learning curve - it will take programmers and network staff some time to understand the capabilities and requirements of ICA.  Technology staff with ICA knowledge may be difficult to find, but as more products are brought to the market, this situation should be resolved.
Conclusion

Network computing is in its infancy.  Interesting enough, many years ago network computing was almost a standard.  Mainframe computers were in most major companies and terminals to these computers were standard equipment.  A large team of data communications specialists managed vast dedicated and costly networks.  Then came the personal computer and all that changed.  Computing power was moved to the desktop and network architectures were altered.  However, by moving the computing power to the desktop, a new set of challenges was created.  Programming and supporting this new distributed approach to computing often replaced one set of problems with another and required significantly more capital than many managers anticipated.  This new approach to network computing, combining the best of both worlds, is a viable option for companies looking to improve their information flow and reduce costs at the same time.  Although the design is relatively new, it offers enough advantages that it should be seriously considered as companies reexamine their information requirements for the next millennium.

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Also See: Technology - Making a Mark in the Hospitality Industry / KPMG / 1998 
Damn Interfaces!How Will Standards AffectThe Hospitality Industry Today? / Mark Hamilton / Mar 1999
Mirage Resorts Manages Growth Using Scalable 3Com(R) ATM/Fast Ethernet Solutions / Feb 1999 

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