GDS Innovation - An Oxymoron? A Challenge

The interest over the Sabre decision to rescind one developer's contract seems to have ignited a big debate.

Sabre is very much on the defensive for its decision. Travelport seems to be fence sitting. However Amadeus seems to be taking a more open approach. I encourage readers to go the the BEAT website and read Dwayne Ingram's letter in response to Pass Consulting's Michael Strauss.

http://www.thebeat.travel/blog/node/373

But let's just challenge a little of the assumptions here. Is GDS "innovation" actually an oxymoron?

The definition of "innovation" seems to have been lost in the shuffle. Also the investment by the GDSs needs an examination.

A GDS's stock in trade is maintaining currency of its platform. So there are armies of developers and functional analysts inside a GDS who sit there all day consuming 1000 hours of time each year of time (1 man year) in "development". In reality much of this - not all but by far the largest portion - is just standard sustainability activity. The analogy I would use is that it is like paying for a change of tires on your car. If the tire model is changed, the rubber is modified or the service is better etc etc it doesn't change the fact that its a tire (or a tyre) and that you need a tire to run the car. Will it get you to your destination faster?

Of hard core innovation and research into it - there is precious little being done at the GDSs. I am sure someone will disagree with me but please show me where that money is being spent and I will happily recant if a GDS can demonstrate true innovation expenditure.

When I was at Worldspan - we did hard core R&D but it was never funded that way. We funded it out of people's time and some egregious sleight of hand, and the budget never reflected it. More than once did I get my knuckles wrapped for that behavior. But in the end my team delivered new products and services which today power a significant amount of Worldspan's gross transactions. Is that what the GDSs are doing today? You be the judge.

Nope rather the GDSs are actually delivering LESS functionality than they did years ago. There is in reality now a technology gap between what counts for real innovation and additional functionality vs. maintenance of the status quo.

In defense of the GDSs - this is all that they can do. The demands of the business have grown to such a level that it is impossible for them to maintain the totality of service that they used to provide. They have eliminated in the past 10 years: Networks, workstation software, hardware etc etc. At the same time they have in general abandoned the back office and mid office markets to third party developers. Their remaining platform of solutions is significantly below what it once was. Yet their revenue from the airlines has continued to rise (percentage wise) despite implementing the Full Content contracts. Just look at Travelport's latest numbers. It is very transparent.

Today almost every GDS based booking touches a third party developer's application in some shape or form. So the value of the third party developer to the equation is critical. Indeed the third party developers almost to a man (sorry or woman) are doing what the GDSs are no longer capable of - namely providing that missing functionality, content access or efficiency - that the GDS used to provide. So in truth the third party developers are actually helping the GDSs stay in business.

The GDSs should actually acknowledge this and stop some of their arcane "certification" processes. Wouldn't life be wonderful if we had a platform that didn't need "certification".

Perhaps that symbiotic relationship is going to change. Clearly the innovation edge goes to third parties and not to the GDSs. So Amadeus's approach is the right one. I only hope their actions match their rhetoric. One thing is for certain - the barriers to entry are decidedly lower than they used to be and the relative value of a GDS to the distribution mix is similarly lessened.

So here is my challenge to the GDSs. Adopt the Open Source GPL (General Public License) model. It includes any abuse provisions. If you are truly open then put that out there.

For anyone who is interested one of the best articles on the subject from a legal perspective can be found here:

http://www.sitepoint.com/article/public-license-explained/

Lets get real here and perhaps a little more honest with ourselves....

Cheers