For a decade, European rail companies have turned to outside vendors to provide parts of their rail distribution services, including Amadeus, IBM, Siemens’ HaCon, and Expedia Inc.-owned SilverRail.

But in the past 18 months, Dutch rail tech vendor Sqills has enjoyed a streak of business wins.

On Wednesday, Sqills announced it has begun to implement its sales and distribution suite with rail operator Eurostar.

Sqills previously announced an implementation with Ouigo — the budget train service run by French railway operator SNCF (Société Nationale des Chemins de fer Français). It moved that brand off of a system powered by Amadeus.

Last year, Irish Rail went live with a Sqills system that enabled the operator of intercity routes to more quickly process changes to a traveler’s ticket, update fares instantly across all points of sale, and change fares dynamically as demand and supply changes on a route.

Sqills, which has 150 employees, said it would announce further contracts with railway companies this year.

“Since our start in 2007, we have been profitable, and we have funded our product development ourselves,” said Alexander Mul, co-founder and marketing director.

A Looming Wave of Replacements

The once sleepy sector of rail tech, which provides sales, distribution, ticketing, and revenue management computing systems to rail operators, may be stirring from its slumber.

Eurostar transports more than 10 million passengers a year, making it the biggest railway company to switch systems recently.

One impetus for change is that four rail carriers in Europe and Amtrak in the U.S. are in the process of releasing new application programming interfaces, or a method used for retrieving data.

Customers that have direct connections via old technical connections now have to consider the cost of reconfiguring their connections to take advantage of the interfaces or else outsource the work to a vendor.

Many rail operators in Europe, Canada, Japan, and South Korea are entering into intense debates about whether they should replace their technology systems.

Replacements can be a protracted process, prone to headaches. As a sign of the complexity involved, Eurostar’s tech migration will take until 2020 to be completed.

Yet sticking with an in-house approach risks falling behind broader trends in retailing, merchandising, and the drive to achieve personalized service.

Railway companies are calling in tech-savvy consultants such as Accenture, CGI (Conseillers en Gestion et Informatique), SNCF-run Rail Solutions, and Wavestone for advice more frequently.

At present, many rail operators are actively considering replacing their existing systems either by issuing requests for proposal or by hiring consultants to evaluate options.

This group of companies includes Germany’s DB (Deutsche Bahn), Denmark’s DSB (Danske Statsbaner), Finland’s VR (Valtion Rautatiet), Norway’s NSB (Norges Statsbaner), France’s SNCF, Spain’s Renfe, and Switzerland’s SBB (Swiss Federal Railway), according to sources.

In Canada, Viarail has invited vendors to pitch their services. In Australia, Queensland Rail is considering its options.

SilverRail Picks Up Speed

In June, Expedia Inc. took a majority stake in SilverRail, which provides distribution tech to more than 35 providers and carriers, for $148 million.

The company has signed its enterprise software deal with a UK rail-owning group and it has put into production its services with one of the operator’s franchises. An announcement is due within a year.

SilverRail is integrating with two of the world’s five-largest travel management companies to enable corporate clients to more easily book rail tickets.

Cameron Jones, chief commercial officer, couldn’t reveal the names, but hopes to announce them mid-year.

Expedia’s backing has helped the company in a couple of ways.

In late 2017, SilverRail landed a deal to provide a connectivity and transaction processing layer to the systems at Rail Europe, the largest online consumer seller of European rail tickets, which is backed by Voyages-SNCF.com Technologies – joined owned by Expedia and France’s state railway.

Jones said Expedia has let SilverRail continue to operate as before. “But now we can leverage its expertise in operations,” Jones said. “We’re learning from them some best practices in data center management, agile development, and recruitment.”

Get Off of My Cloud

While SilverRail and Sqills have been racking up wins, Madrid-based tech giant Amadeus has been quiet about its services. As a leader in making reservation and distribution systems for airlines, Amadeus and its subsidiary Navitaire have been able to sell reconfigured versions of its air systems to railways. The company wasn’t able to immediately comment on its recent progress.

Might there be additional acquisitions in the space, following Expedia’s purchase of Silverrail? Perhaps.

Rail is one of the fastest-growing travel sectors in Europe and parts of Asia. Expedia added rail ticket sales to its UK flagship brand a couple of years ago. Its global rival Booking Holdings has largely ignored international rail ticket sales to date. Ctrip offers domestic rail tickets on its Chinese site.

Photo Credit: This photo shows Eurostar's high-speed passenger rail service linking the U.K. with mainland Europe in action. The company has awarded a major tech contract to Sqills, a Dutch company that has recently stolen some business away from more established tech players. Eurostar