Hyatt Hotels Corp. hasn’t had to make the decision to jump into cloud computing—it’s been journeying into the cloud since long before anyone was calling it that.
For all intents and purposes, Hyatt began its cloud journey 16 years ago, when the company outsourced the bulk of its IT staff, eventually entrusting the hosting of its primary reservations system to the same IT outsourcer. What’s known today as cloud computing was still a long way off, but those moves established an IT philosophy that has become the foundation of Hyatt’s cloud strategy.
“We don’t want to be in the information technology business,” says CIO Mike Blake. “So what we do is get people who can manage our information technology needs.”
That’s why all these years later, Hyatt’s legacy reservations system is still hosted by the same IT outsourcer. By the end of the year, Hyatt will have a backup to that system running in a German data center run by Amadeus, which hosts one of the travel industry’s huge booking platforms, known as a “global distribution system.” Hyatt’s reservation system is one of just two legacy components remaining in the company, the other being a group sales tool, which is also hosted, and for which Blake says there is simply not an alternative on the market, cloud or not.
Outside of those legacy systems, Hyatt operates with an increasingly modern cloud computing mindset. With an IT staff of just 43 people supporting a global hospitality company that employs tens of thousands of people at nearly 450 properties worldwide, it’s no wonder that just about every application Hyatt runs has been Internet-enabled.
Most notably, the company’s Micros property management, Oracle financials and PeopleSoft HR systems are hosted by providers such as Navisite and AT&T, with all of them rendered as Web-based software-as-a-service applications. Hyatt opted to put best-of-breed applications in the hands of those big names to tap their robust and reliable networks, rather than turning to niche SaaS vendors and relying on the vagaries of the public Internet.
“So often, we take the network for granted,” says Blake. “You need to make sure your speeds are appropriate, because latency is inexcusable. People get very upset when apps are rendered offsite and they’re slower.”
Despite its penchant for traditional hosting arrangements, Hyatt is experimenting with more nimble cloud technologies, as well. For instance, the company is tapping the on-demand computing power of Amazon Web Services’ Elastic Compute Cloud to quickly establish development environments for new Web sites that then are managed with a recently deployed content management system residing on servers hosted by AT&T. The content management system is used only as a Web-based interface for quickly making changes to Hyatt’s several hundred Web sites, but that limited functionality is having a big impact, with changes that used to take weeks now being completed in minutes.
Given Hyatt’s history, it should come as no surprise that the advent of cloud computing offerings like EC2 hasn’t changed the strategic discussion of how to manage the company’s IT. In fact, Hyatt has come at cloud computing with a decidedly old-school approach to negotiating, working out deals that Blake says ensure that prices fall over time, rather than rising with inflation, which is often how cloud providers structure their deals.
That negotiating strength is a direct reflection of Blake’s background as an expert in IT finance. In fact, Blake believes that deal-making is evolving into the skill most required of modern CIOs.
“You want the person who can understand what you need from the cloud and be able to structure a deal such that you got the best rate, not only now, but in the future,” says Blake. “At the end of the day, it’s procurement and vendor management that becomes a core competency and a differentiator.”
To some, it may sound like a stretch to call much of what Hyatt is doing “cloud computing,” and even Blake admits that what Hyatt is doing is “cloud cheating.” The way he sees it, users don’t care how an application is rendered; rather, they simply want to be able to put data to use in the most convenient way possible, and as quickly as possible. In that sense, ensuring the performance and reliability of the network can become more important than the way applications are rendered.
“I don’t have to go to an explicit cloud provider to be in the cloud,” he says. “Anyone can have a warehouse and a box, throw a T-1 in there and call themselves the cloud.”
What matters most to Blake is how Hyatt uses the data its applications generate. Whether that data comes from a hosted application or a pure SaaS offering is of little issue, so long as the company can put that data to use quickly and efficiently. Today, Hyatt’s ability to make the most of its data has made it as nimble as a big company can hope to be, and it has the cloud in its various forms to thank for that.
“If you had a house with multiple rooms in it and you wanted to be a hotel, all you need is a browser, and I can make you a Hyatt Hotel,” says Blake. “It’s an extremely powerful place to be.”