First Published on 7th August, 2017
Ai Editorial: Airlines recognize that speed is of essence when it comes to the efficacy of their customer-facing systems. Ai’s Ritesh Gupta explores the role of a cloud-native architecture in delivery velocity as part of the overall digital transformation.
Airlines have been relying on cloud services platforms, signalling a shift in the IT consumption model. So rather than paying for IT infrastructure capacity upfront, today’s organizations are opting for pay-as-you-go model, accessing servers, storage, databases and application services over the Internet.
As seen over the years, cloud has played a key part in digital commerce. For instance, page speed is critical, with every millisecond being crucial. So to step up the conversion rate, cloud infrastructure was chosen to keep latency to minimum, supporting application servers and databases in specific regions to support users. Airlines have been relying on cloud technologies to deliver services such as luggage drops with label printing and self-boarding gates, and personalisation by enabling the customer-facing staff, for instance, providing the airline’s cabin crew with contextual, relevant information to serve their loyalty program members in a consistent manner.
As for emerging cloud developments, airlines can step up their ancillary revenue generation by capitalizing on journey data. As it emerged during our Ancillary Merchandising Conference in Spain this year, a new 3rd party cloud-based platform is emerging that can integrate airline’s inventory system and central reservation system to display contextually relevant information or ads in real-time. So airlines can make the most of their data to garner incremental revenue. Also, in the wake of outages, it is being pointed out that mission-critical systems have to move to the cloud, ensuring stored backups are secure, data is stored in multiple locations to ensure sufficient backup etc.
Airlines are scrutinizing and even executing plans to embrace cloud transformation, banking on open-source offerings rather being bogged down by proprietary technology.
Focus is on ways to integrate real-time data, search, and analytics into applications to optimize travellers’ journey. This essentially has become an integral part of digital transformation, a massive undertaking that features speedy and constructive progress on several counts to strategically leverage digital technology.
In fact, considering the complexity of the IT set up that this industry has, there are options available to integrate applications, data and processes across both on-premises and cloud environments. There are 3 models for cloud computing - Infrastructure as a Service, Platforms as a service and Software as a Service.
Taking advantage of cloud computing:
· Use cloud as a route to market (APIs are the digital services)
· Garner data, integrate data from multiple sources
· Create and capture value – optimize traveller’s journey
Among established organizations in this industry, American Airlines has decided to migrate to cloud a quota of their crucial applications, including aa.com, mobile app and network of check-in kiosks. The plan is to enable developers to swiftly set up and modify application functionalities for American’s passengers. These customer-facing systems will be on cloud. As American chose to move its applications into the cloud, it considered factors such as security (the role of technologies such as encryption and tokenisation comes into the picture) as well as connecting legacy applications to the cloud at enterprise scale.
The cloud business model that the airline has chosen is a hybrid one.
According to the airline’s partner, IBM, the airline would maintain backend connectivity to other on-premise legacy and third-party systems, for “true hybrid cloud functionality”.
Cloud-native architecture as part of digital transformation
As American says, the goal is set up a cloud-native architecture.
What does this mean? It is about capitalizing on cloud computing – making use of vast computing power on-demand and pay-as-you-go. An organization needs a platform for running cloud-native applications and services, as a method for abstracting away from core infrastructure dependencies. For their part, American Airlines intends to create, try and release applications frequently and speedily. Also, all of this would be change ready for release as soon as it is ready. This would be made possible via a microservices architecture (working on an application as a collection of small services; each service implements business capabilities), agile methodology, continuous delivery (individual software updates available for release as soon as they are ready), DevOps (association between software developers and IT with the objective of automating the procedure of software delivery and infrastructure changes), and lean development. So a cloud services platform is must for operating cloud-native applications and services that automates and integrates all these concepts that fall under digital transformation.
Harnessing cloud for digital transformation isn’t a straightforward process, with re-designing of IT architecture or operating in functional silos within IT being primary challenges.
For cloud service delivery, some of the areas specialists recommend that airlines need to assess:
· Assess business goals and their alignment with current IT ecosystem
· How to move to a structured, agile program? Evaluate technologies and the role of staff to deliver new applications
· Ensuring IT understands the business challenges and is aligned with the DevOps cycle
· Finalising cloud service delivery model
· Operating model and training – detailed insight into IT architecture, data and technology
· How to migrate applications to a cloud-native microservice architecture? What makes for a resilient cloud native microservice architecture?
· To what extent one can bring down the probability of prolonged irregular operations?
The days of traditional software development and infrastructure management processes are getting numbered. Cloud has positioned itself as a competitive advantage, letting developers optimize what they offer and presenting airlines with an opportunity to run with lean methodology and automated IT operations.
Hear from senior travel industry executives about digitization and ancillary revenue at the upcoming The Mega Event Asia-Pacific 2017 - 4th Annual Profitabilty Summit, to be held at the Grand Mercure Roxy Hotel in Singapore (23-25 August, 2017).
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