To get a sense of how web services are affecting the travel industry, consider Abacus International. Two years ago, the Singapore-based travel company, which runs 15,000 travel agencies in the Asia-Pacific region, generated just 1 percent of its total bookings online. But thanks to travel data from Sabre Holdings that is backed by web services, Abacus’s online bookings jumped to 11 percent of its transaction volume in 2005 and now represent 20 percent of its total volume, says Director Lim Lai Hock.
From a customer support perspective, the costs of handling web services-based transactions are "much lower, and bookings are more efficient", says Lim. That's because web services provide a level of automation that isn't possible with mainframe-based services, which require more human involvement. For instance, travel agents can use Sabre web services to conduct calendar-based airfare searches. In the past, those types of requests would have been sent to a customer service agent.
- Headquarters: Southlake, Texas
- Business: Travel products and services
- Employees: 9,000 in 45 countries
- Revenue: US$2.5 billion (2005)
- Net earnings: $196 million (2005)
Abacus, which is 35 percent owned by Sabre, is just one of more than 1,000 customers that have been using Sabre's web services since 2005. Travel agents, airlines and other travel services companies are finding that web services provide faster and easier access to Sabre's global distribution system, the world's largest electronic travel reservation system.
How web services make a difference
For Sabre, web services provide an opportunity to break away from its old approach of delivering mainframe-based services to travel industry customers. They have also let it develop new products and enhanced services that can spur growth and generate additional revenue.
For example, an airline that uses Sabre's online reservation system can now tap into other Sabre applications more easily to compare fares or make hotel reservations for its customers, says Gordon Locke, vice-president of marketing at Sabre Airline Solutions in Dallas, Texas.
Sabre's web services effort began as a research and development project in 2003 to help company executives work out how the use of a service-orientated architecture (SOA) could help its customers reduce the complexity and expense of accessing its online products and services, says Andrew Teel, senior principal architect at Sabre Holdings. Additional investments in 2004 let Sabre introduce new and expanded travel services supported by the platform in 2005. Today, Sabre offers more than 50 products and services to its clients through web services, including fuel and inventory management tools for airlines.
Prior to the web services implementation, Sabre's electronic customers had to negotiate a layer of its communications software to get at the data they were seeking and then code the data to a specific format to obtain structured information, says Teel. That multistep process made it much more difficult for customers to integrate content with their own applications, he says, adding, "We saw web services as a way to get out of that model".
Teel, who has overseen the multimillion-dollar effort, says web services have allowed Sabre to create business models for its products based on its clients' abilities to obtain information themselves. This, he says, "has allowed us to attract more customers while providing our existing customers more flexibility in integrating our content into their systems and business activities."
Balancing mainframes and midrange solutions
Despite its move into web services, Sabre doesn't have any immediate plans to discard its IBM and Amdahl mainframes, which are managed and operated by Electronic Data Systems. "With such a high volume of data and applications, it's going to take a while to transition our customers off the mainframe," says Teel.
But web services have provided the company with an opportunity to distribute more of its processing onto lower-cost midrange and Linux systems that use Java, Teel explains. Some of the services that Sabre has moved onto its midrange platforms include its airfare and hotel shopping and pricing systems.
The result has been dramatic. "We've seen tremendous growth over the past 18 months," says Allen Appleby, director of customer access and content solutions for the marketing arm of Sabre's travel industry group. The number of travel agents and other Sabre customers using online reservations engines, call centre systems and other applications driven by web services has grown by 500 percent since early 2005, he says. He expects Sabre to add 300 new online customers over the next three years thanks to web services.
Sabre "is probably one of the more aggressive, forward-looking" travel companies in terms of its web services strategy, says Ronald Schmelzer, an analyst at ZapThink, a Massachusetts SOA research and advisory firm.
Pioneers versus followers
Sabre is certainly not alone. At least two of its travel industry competitors - Galileo International - and Unisys - began providing web services to their customers before Sabre did, according to Forrester Research analyst Henry Harteveldt.
But pioneering web services in the travel industry may not necessarily create competitive advantage, Harteveldt says. Sabre has embraced a set of web services standards being developed by the OpenTravel Alliance (OTA). And because there are such extensive interrelationships among airlines, hotels and other travel-related companies, "being a fast follower might be better for [Sabre]" as the OTA standards become more widely adopted, Harteveldt says.
In December, Sabre announced its acquisition by Silver Lake Partners and Texas Pacific Group. Silver Lake managing director Greg Mondre cited Sabre's use of technology "as a competitive advantage and value-add for customers".
Unlike many companies in other industries that have created web services platforms with the help of off-the-shelf tools, Sabre elected to develop its own runtime infrastructure, the middleware needed to run web services. A couple of factors led them to this decision, explains Teel.
For a start, Sabre has a massive volume of data transactions. At one time, Sabre's mainframe-based Real-Time System was the largest system in terms of transaction volume outside the federal government. (One day in early October, Sabre web services hit a new internal record by processing 21 million transactions in a single day.) So it made more sense for Sabre to create its own runtime layers and then tailor them to meet the needs of its businesses, which include Travelocity, Sabre Airline Solutions and Sabre Travel Network (including its global distribution system).
The state of the art in web services also played a role. In late 2003 and early 2004, when Teel and his team evaluated the commercial tools then available to help develop a web services infrastructure, "we determined that the market was fairly immature", says Teel. At the time, he says, Sabre had difficulty finding commercial systems that could meet its enormous performance and transaction-volume requirements.
But building your own web services infrastructure is not necessarily onerous, says ZapThink's Schmelzer. Companies that have got immersed in web services often discover that they're able to draw heavily upon their existing IT infrastructures, he explains. "You don't need a whole lot of new middleware to make SOA work," he says.
Fortunately for Teel, he didn't have to do any external recruiting to build Sabre's web services platform. "We had a set of team members who had already been doing quite a bit of XML and SOAP work, and we leveraged that team to come together and build the foundation infrastructure," says Teel.
Sabre's web services layer is a full Java implementation. The company uses Apache Tomcat servers running Linux. There's also a layer of C++ code used to integrate applications with Sabre's mainframe systems.
Looking ahead, Sabre plans to add other capabilities for its customers. Also, it will emphasise orchestrating various functions through web services, such as the ability for travel agents to shop easily for airfares and hotel rates at the same time, says chief technology officer Robert Wiseman, who joined the company in May from Cendant.
"Our business is about delivering the best content we can in the most efficient way possible," says Wiseman. "Web services can do that for us."
A side trip to agile development
During the past few years, as Sabre Holdings has built its web services infrastructure, the company's IT department has also been moving from traditional waterfall development techniques to an agile development and project management methodology.
Sabre's approach to agile development draws from other iterative programming techniques such as UML, which focus on managing risks through rapid development, says Sara Garrison, senior vice-president of products and systems delivery at Sabre. Timeframes for iterations vary but can be as short as a week or two, with close collaboration between users and developers. Benefits of the agile approach include components that can be reused for other projects, she says.
As Sabre began developing a runtime infrastructure in 2004, project iterations would typically start with an inception phase - an evaluation of what Sabre's products could do in a Web services environment - followed by an elaboration phase, says Andrew Teel, senior principal architect at Sabre.
Next would come development. Most of that work has been done in the US, although some of the tools were built by Sabre employees and contractors in India and Poland.
Although the transition has been successful, Sabre has faced a few challenges, says Garrison. For example, usually the full range of system requirements isn't fully explored during an agile system development lifecycle.
User interface design techniques, for instance, are typically treated separately, and deployment into production isn't usually addressed, she says. So one of the challenges, Garrison says, was to make sure that the agile process captured the full range of system requirements, "both those tied to business functions and those tied to the underlying stability and durability of the system".