PS: You may want to know that the whole interview was recorded while he was having a juicy steak, and I got stuck with a boiled potato... So, if it gets sketchy at times, here's my alibi.
Simone: "Jan, a question I get asked all the time from clients concerned about switching to the cloud is always the same: what if the internet goes down? Do you have that as well?"
Jan: "The first thing is that that, you know, backing up internet connectivity is much easier and cheaper than backing out a whole on-site system. When you have to back up a legacy system, you need to have a second set of servers available, you need to have your IT guys ready, and that costs money and time. But, if you are using a cloud-based system, the only thing you need to backup is your internet connection, and nowadays, it's effortless. Most of our customers are backed up by a mere mobile connection."
Simone: "And is that enough?"
Jan: "Well, if you take a legacy system that has been converted to the cloud, it would typically take a lot of bandwidth, so backing out the connection is something not very easy to do, and a mobile connection may not be sufficient at all times. When we started the company, we only had dial-up connections, so we had to come up with a system that wouldn't use all the bandwidth."
Simone: "That's a good angle. So what you're telling me is: if you go cloud-native from day one, with a system that was built with a lean approach, where the usage of data was minimized..."
Jan: "... You got it. We had to make a virtue of necessity, but that gave us a huge advantage when competing with some of the other systems that have just been converted to the cloud. If you take a legacy system (I don't want to name any), you would need a solid line, like fiber optics line, or something like that, which is very costly and, again, it would increase the overall total investments. Paradoxically, you're basically losing the actual advantage of running a cloud-based system."
Simone: "Makes sense."
Jan: "We were very cautious about the amount of data where were exchanging, not only in regards to the PMS, but also in regards to the whole ecosystem. Having a system that can work on any connection provides a crucial advantage. Some of our clients were very, you know, afraid of switching from their on-site system to the cloud, but the ones who do did, came a year later and thanked us for the peace of mind that the system provided them. The bottom line is: backing up an internet connection these days is nothing compared to backing up an on-site system."
Simone: "Moreover, from an operational point of view, a cloud-based system should give hotels more freedom and peace of mind: you're are able to access and modify data anytime, anywhere. Having a cloud-based system essentially means outsourcing your IT infrastructures. What do you think?"
Jan: "We actually made one of our first customers in Glasgow retire. He once told us: "please do not go bankrupt because this is awesome." He moved to Spain now, and he mainly plays golf. I haven't seen him in the hotel since, you know, wow... It's been five years..."
Simone: "That's a pretty damn cool outcome. Jan, let's take a step back: could you define the concept of cloud?"
Jan: "It's a funny question. When we started, clouds were just these things we can see outside of the windows. The name came some ten years later. I think, generally, what you mean by cloud is a network that connects two computers."
Simone: "Simple as that?"
Jan: "Yes. One of my favorite movies is Grand Budapest Hotel, by Wes Anderson, have you ever seen it?"
Simone: "At least three times. I mean, if you're in the industry, that one and Four Rooms are classics. Together with the one with Mike Fox: For Love or Money."
Jan: "Well, there's this beautiful line in Grand Hotel Budapest: "What is a lobby boy? A lobby boy is completely invisible, yet always in sight." Hotel technology should be the same. Hoteliers should not focus too much on the underlying technology; they just need to be assured it works."
Simone: "What is the difference between cloud-native and migrated to the cloud?"
Jan: "A cloud-migrated system would be a system that wasn't originally built for the cloud, so it was basically an on-site system, okay?"
Jan: "At some point, somebody wanted to convert that system into being cloud-based. So what happens during that process is that you take a lot of the source code, a lot of the existing parts of the system, and you just try to convert it. With a cloud-native system, on the other hand, from the very first line of code, you know that you're building a system for the cloud. It's like if you buy a gasoline-powered car and decide to convert it to electric. It's doable, I guess, but you're going to face limitations. It will never be a pure electric car, but a hybrid."
Simone: "I doubt Elon Musk would approve that."
Simone: "So hybrid systems that have been converted to the cloud still need a server infrastructure somewhere, am I right?"
Jan: "That is correct. So, typically, these hybrid scenarios require a lot of bandwidth, and, in the end, they would be more expensive."
Simone: "It's weird that we accept cloud in so many areas of our lives. Think about Netflix: yesterday I was on a flight, and I was watching a movie. Simple as that. Now, imagine that, in order to do this simple action, I'd have to connect to my DVD player via TeamViewer... It doesn't make any sense. You just accept that the cloud is the way to go. Why is this not the case with hotel tech?"
Jan: "You know, when we go to places, especially outside of Europe, where cloud isn't the most typical setup for a PMS, we still get many questions regarding things such as safety, data backup, etc. These people don't often realize that, you know, their bank accounts, all of their data ARE ALREADY in the cloud. If you compare having your data on a server in your basement where no one really knows what's going, with risk of floods or fires... Would you be comfortable with your bank data on a physical server?"
Simone: "I am like Fox Mulder."
Simone: "I trust no one."
Jan: "Well, you shouldn't! I mean, I had several meetings with hoteliers keeping their server room doors open... I could simply step in and take two of those servers, and nobody would even notice that..."
Simone: "It's really a double standard. Think about emails: hoteliers have no problem outsourcing emails, and they never aks questions such as where my inbox is geographically stored... It's a freaking paradox!"
Jan: "It gets worse: if you have a legacy system hosted on-site, you'll still need to create a backup (which will be stored off-site), and this off-site backup will be stored into the cloud, so then, again... It is really about educating and changing the mindset. New generations wouldn't even think about getting the servers, because, for them, it's just an automatic thing to have software as a service. We just need to be patient."
Simone: "Tell me more about legacy systems and GDPR."
Jan: "What GDPR means for PMS is, and I don't think hoteliers all are well aware of that, is that it puts a lot of pressure on any on-site solution. You now need to take into account where the servers are physically located in the basement, you know, who's got access to it, you know, there's a lot of certifications and compliance issues to be solved... I see no reason why hoteliers should be dealing with those issues. They'd just need to care more about their guests."
Simone: "I agree. Listen, I've heard so many companies talking about marketplaces over the last couple of months, and, in my opinion, the biggest challenge is that, to have a very, you know, effective marketplace, we should get to a plug-and-play industry first. What are your thoughts?"
Jan: "You shouldn't have said that."
Jan: "Because, sorry, I can talk for hours about this topic... Look, it will take a while before we see any functional marketplace. Currently, what marketplaces do is simply showing software. They're just catalogs for hotel tech. Directories. Having said that, not all hotel system are as so straight forward to be fit in marketplaces: if you get a new revenue management system, for instance, you probably don't want to get a trial version for 30 days that will mess up your prices. I think marketplaces will be more hybrid between plug-and-play and directories."
Simone: "I kinda agree. I'm not sure we may want to have that kind of freedom marketplaces promise, at least not with the current state of travel tech."
Jan: "Look, when it comes to integrations, quality overrides quantity. Each integration we do and certify, we try to understand fully what data are being transferred, you know, to be able to deliver the best service and the best connectivity to our customers. The open API question, I think, is very valid, but companies still need to talk to each other and understand how they work. It's not so obvious most of the times."
Simone: "I think the interesting point is that hoteliers have to think about how fast, tech-wise, the industry is moving. Choosing a software today is not only about what you need, but what you may need in two-three years from now..."
Jan: "Correct. When you make a big decision such as changing your PMS, if you're choosing a system that is closed or that is forcing you to have everything in one place, then you're really closing your options for the future. If you pick a system that is closed, it's always going to be closed. You're being held hostage: you're just limiting yourself. I think it's essential to actually understand the approach of your suppliers because it's the approach that will stay with you for the next five to ten years, the average lifespan of a PMS. You don't want to change your PMS every year, that's why I think it's imperative to not only to look at the current features and current connectivity of the providers but also at their proven records, if you like, of innovation."
Simone: "The last one for you: what is the key question hoteliers should ask their PMS providers?"
Jan: "The main question really is: does this system supply everything I need to be a good hotelier and to provide the best guest service possible? If I were a hotelier, I would probably sit down and think about my hotel and the specific needs of my hotel. Where are my values? Then, I would be looking at a system that can support those values."
Simone: "This was an interesting chat, Jan, thank you."
Jan: "My pleasure. How are you enjoying your potato?"
Simone Puorto is a former hotel General Manager, consultant, author of three best-selling books on hotel marketing, MBA lecturer, and contributor for the major blogs in the industry. He is the founder and CEO of Travel Singularity, the consulting firm whose vision is to solve the growing needs for connecting the dots between digital disruption and change with the existing technology and processes in hotels. Over his career, spanning across over 20 years, he consulted for international hotel groups such as Divani Hotels Collection, Library Hotels Collection, and Louis Group (LUI), helped to consolidate the second-largest Italian hotels' chain, and he advised for several travel tech start-ups.