Executives from Expedia and other travel companies acknowledged at an Amadeus tech conference that cloud computing can lead to hidden waste. Mistakes include not monitoring costs and allowing internal strife to delay cross-department projects.
Moving travel company software to the cloud has proved tricky, some travel technology executives said this week in moments of candor. Absent strategic thinking, shifting systems from mainframe computers to public internet-based services from Amazon Web Services, Google Cloud, and Microsoft Azure can waste resources.
What to watch for? Carelessness about hidden costs, such as when engineers tap too much computing power to achieve a goal.
“Getting a team to internalize cloud economics is the most important thing,” said Subbu Allamaraju, vice president of technology at Expedia Group when speaking Tuesday at Amadeus’s T3CH conference in Madrid.
“If you go to the typical data center and ask how much your architecture costs, the answer is usually ‘I don’t know because I’m not paying the bill,'” said Allamaraju. “So we spend much time making sure every engineer at Expedia Group knows how much things are predicted to cost,” Allamaraju said.
The executive bluntness is a counterweight to recent industry hype about cloud services.
Advertising campaigns have promoted the cloud’s potential cost savings for companies as they switch from investing in, and maintaining, servers to buying the computing power as they need it. But they ignore some practical challenges. Travel executives have found that they must shift their services over to the cloud in stages, and the phased shift can lead to escalating costs.
“An issue the industry often runs into is you might spend twice as much as before because you have fixed cap-ex [capital expenditures] for the data center and the cloud,” Allamaraju. “How to make sure you’re getting the best value for the money can be challenging.”
Talk about data migrations gets complicated after you include variations, such as the difference between private and public clouds.
Exhibit A: Amadeus shut down the last of its mainframes at its data centers in 2017, moving to its own server-based tech stack. On Wednesday, it announced it had migrated the first of its core shopping applications off its private infrastructure and onto a cloud run by public cloud business Google, open to anybody.
“The public cloud lets us more effectively prepare to cope with surges in booking inquiries by travel shoppers such as during Black Friday in the U.S.,” said Denis Lacroix, Amadeus’ senior vice president of core shared services research and development. “It’s more cost-effective than having to pour more concrete and buy more equipment at our data center in Germany.”
Tumult in the Cloud
Waste that’s harder to measure is organizational inefficiency. A transition like a data migration can typically require teams led by multiple managers at a vice-president level to work together for long spans. When projects get messy and go off-course, engineers tend to respond by blame pockets of teams for supposedly resisting change due to vested interests or stupidity, Allamaraju said.
Engineers should step up and provide missing inter-departmental leadership instead of play victim, Allamaraju said. Focus on desired outcomes first rather than a grand plan, he suggested. Propose a solution, but don’t insist on your particular ideas on how to implement it.
“The technical part of the transformation facing large travel companies is almost the easiest part,” said Paul Strong, technical director at the chief technology officer office for Google Cloud. “The hard part is around people, culture, and processes.”
Universities don’t offer courses in diplomacy. However, unless engineers seek leadership training and best practices, cloud migrations can create pain and waste.
The Real Gains Have Yet to Come
The travel industry is behind the retail and financial sectors when it comes to tapping the maximum benefits of the cloud, which includes being able to make use of sophisticated services like machine learning techniques for data analysis, said Nicolas Nelson, chief information officer of Air France.
Lessons learned from cloud-pioneers like Home Depot can be useful for travel tech executives, Strong said. Many retailers have done the basics of moving storage and running the consumer shopping function of their websites to the cloud.
“Some retailers, like Home Depot, have gone further by migrating their warehousing and operational data to the cloud, which lets them use analytical tools to more effectively manage their inventory and processes,” said Strong. “That’s a next wave opportunity for travel companies.”
In the meantime, travel companies are making some progress on the basics.
Amadeus, for example, plans to move its applications to run on the public cloud across multiple regions.
“The public cloud can shave off critical milliseconds in the response time of search results we power on online travel agencies because their servers are closer to where our customers and shoppers are,” Lacroix said.
Cloud systems can be more elastic and flexible, said Rafael Achaerandio, head of Azure development advocacy and app innovation cloud sales at Microsoft. The cloud can let an airline or online travel agency deploy its applications around the world with the tap of a button, which was virtually impossible with its legacy data centers.
The promised land is far off, executives said. Travel companies will remain in a “hybrid” state with a mix of older and newer technologies for a few years yet.
“We all want to drive Teslas that get a range of up to 300 miles on a single electric charge,” Allamaraju said, “But for cost reasons, most of us have to make do with hybrid gas and electric vehicles.”
EDITOR’S NOTE: Travel Tech Editor O’Neill did not receive any support from Amadeus to attend the Madrid event. The company provided airport transfers and dinners to attendees.
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Photo credit: Subbu Allamaraju, vice president of technology at Expedia, spoke on March 26, 2019, at Amadeus's T3CH conference in Madrid. Allamaraju said that cloud computing can lead to hidden waste and expense if one doesn't avoid mistakes. Amadeus