PMS in the Cloud

By Tammy Mastroberte, Contributing Editor | August 01, 2011

The concept of cloud computing is not new, but it’s still relatively new in the hospitality industry, and some operators remain on the fence about whether or not they should take the plunge, especially with the all-important property management system (PMS). Is it secure? How do we know it’s secure if there isn’t any physical hardware to monitor? How do you ensure uptime? Will performance be affected?
 
ht_propertywide_0811.jpg“I think people are reluctant of new technology and with cloud computing the issues are usually control, security and connectivity,” says Darrin Pinkham, vice president of IT at Benchmark Hospitality International. Benchmark is using Northwind’s Maestro PMS and MICROS Opera. “When people see hardware in the computer room, they feel more secure.”
 
Also, connectivity and keeping the systems running is important, and when working in the cloud, if the Internet goes down there is no way to access the data or applications. “When you have a cloud implementation and the platform goes down, it impacts all of the hotels as a group. It’s a much bigger impact,” notes Karen Galler, director of IT at Carlson, based in Minneapolis Minn., which currently has 400 Country Inn and Suites by Carlson in the cloud with MICROS.
 
In its infancy, performance was an issue for many operators when looking at cloud options because some vendors were not writing applications to fit the cloud model, Galler explains, noting cost of Internet circuits and bandwidth also hindered adoption.
 
But for those who have taken the plunge, particularly with property management systems in their hotel properties, there is no turning back. In fact, some companies are expanding cloud computing beyond the PMS.
 
Hyatt is moving most of its systems into the cloud, according to Mike Blake, CIO at Hyatt Hotels & Resorts. “Our operating model is cloud computing or hosting,” he says, explaining the company is utilizing the option for its MICROS PMS, as well as its financial system, e-mail messaging and more.
 
The same is true at Benchmark Hospitality, which operates under the long-term goal of having as many applications in the cloud as it can, according to Pinkham. “The cloud is the direction we are all going. It’s the highway everyone is traveling on,” he says.
 
Debunking the myths
Although many operators fear a security risk with moving the PMS into the cloud, those who have done so believe security is actually improved, especially from a PCI compliance standpoint. When data is in the cloud, it no longer exists on the property, which means a huge decrease in risk for the operator.

“Because we are not storing data on premise we reduced our PCI compliance level from a SEQD to a SEQC,” Galler points out. “You can go from a 280-plus requirement down to 80 requirements.”
 
Additionally, much of the security responsibility is shifted from the operator to the vendor hosting the data, which not only frees the operator but also can result in more security than before. “Top-tier providers that we use like AT&T, Microsoft and NaviSite will spend more in security then I would spend on my entire IT budget,” notes Blake.
 
Network connectivity is also an issue of concern for many, but as long as backups and redundancy of systems are in place, operators with the PMS in the cloud are not finding many issues. “Vendors now offer more performance management tools and more redundant layers so availability is much higher than in the past,” Galler says.
 
At Benchmark, which operates a private cloud, the company invested in a Border Gateway Protocol (BGP) from Cisco so if the main network connection with Sprint fails, the systems will shift to the local Internet services available to guests at the property. “Within a millisecond they route back to our data center with the BGP,” says Pinkham. “It might not be as fast, but it still works with no downtime. It happened one night at 6 p.m. and it wasn’t fixed until 8 a.m., but the PMS ran all night.”
 
Benefits of the cloud
Lower cost of ownership, quicker training, faster company-wide updates and a quick return-on-investment are just some of the paybacks that operators report after moving to the cloud computing model.
 
“We needed a lower cost solution for some of our brands, from economy to mid-scale, rather than a heavy hardware capital investment,” says Todd Davis, CTO at Choice Hotels based in Silver Spring, Md. “We first deployed Choice Advantage PMS in 2005, and all you need at the property is a PC and a browser.”
 
At Carlson, the company dramatically reduced its hardware from 400 servers (one at each hotel property) to only 20 centrally managed servers, Galler reports. And Benchmark virtualized 100 servers globally saving between $2 million and $3 million, says Pinkham.
 
Additionally, one of the biggest benefits across the board is the ease of rolling out new software or upgrades. A process that could take weeks, months or more can now be done in one day, and all from the corporate office.
 
“In the past it could take four to six months to upgrade the system on premise and now we just have to make the change one time and it goes out to all locations,” notes Galler. Choice Hotels also took the process of updating its PMS solution from weeks to minutes, allowing the company to react quickly to market conditions, says Davis.
 
Between the savings in hardware and labor hours, not to mention that operators need only subscribe to the bandwidth and space needed rather than buying servers and never utilizing all the space, ROI is quick. “We had a lot of servers to replace and saw ROI within a year for the entire investment,” says Pinkham. “Google charted the course with cloud computing and now Microsoft is adopting it. People are going to have to get on board with this because it’s the direction we are headed.”

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