03 October 2007

Sabre and EDS extend Outsource Agreement to 2014

Citing the relationship as contributing to Sabre's continued business transformation, the two Dallas area based companies have extended their agreement for another 6 years.

Probably business as usual, there is no need for Sabre to re-enter the mainframe business or go back to managing the "bunker" in Tulsa.

However there is a bit of under the covers work that is interesting - mostly in what was not said rather than the rah rah announcement.

For some time Sabre (which BTW stands for S-emi A-utomated B-usiness R-esearch E-nvironment) has been looking at what to do with its aging core platform. With Travelocity businesses (including LastMinute.com) on a much better footing and driving boat loads of transactions - now is the time to look at the other major parts of the business, namely the airline reservations and the GDS services.

Sabre's airline reservations business reached a peak with the US Airways outsource (long before bankruptcy #1). Since then they have lost market and mind share to the upstart Amadeus and its ALTEA (I don’t have the acronym) business. Carefully grabbing outsource deals from first Qantas and then BA, Amadeus has demolished the legacy infrastructure providers. The last casualty being Lufthansa Systems which closed down its FACE project during the summer. With astounding success, Amadeus now provides services to most of the world's top airlines. They are to be complemented on an incredible sales success. But the delivery is long from over. With a significant gestation period and a fall back to the use of BABS as the master inventory system, the Amadeus team has a very steep hill to climb to master all of these new customers. Whither Sabre in all this?

Sabre now needs a new system. There has been much talk and rumour of a deal with Unisys (the bride/mother left at the altar after Lufthansa Systems FACE project was cancelled). The rumours have yet to be verified but the sources are sound. Build it or Buy it? No trivial task whichever one is chosen. No army of Indian outsourced programmers is going to make this one easy. Whatever happens, there needs to be a new core and its needed soon or Sabre could lose its anchor customer American Airlines, in much the same way as Cendant/Travelport lost United Airlines to the STAR Alliance/Amadeus CITP - Common Information Technology Platform.

So chaps what's it to be? There are still some nice plumbs sitting on the table waiting to be eaten. If not, heaven forbid will the business go to AiRes or ITA, even Navitaire? Time's awastin'



No comments: