Heads in the Clouds
Airline Chief Information Officers are scrutinizing the potential of cloud computing
Despite the name, it’s far from a nebulous idea. Its supporters claim cloud computing has the potential to transform the air transport industry, streamlining not only information technology (IT) departments but also entire business processes.
Cloud computing is essentially a way to store and manage data via the internet rather than local servers. Electricity is often used by way of explanation. The end user can turn on a light switch without worrying about the power grid behind it. Similarly, a cloud user can go online anywhere using any appropriate device to access all relevant applications and files with the latest content. The connection, in theory, is instant.
A community cloud
There are several different types of cloud. The two receiving most press are public clouds and private clouds.
Public clouds bring economies of scale advantages, such as lower unit costs, and no capital expenditures investment, but there are legitimate concerns over reliability, data privacy, security, and corporate oversight. Private clouds mitigate some of these risks, but the tenant has to build the cloud infrastructure, which requires massive investment in terms of expertise, equipment, and support. And as a single tenant, the economies of scale from a shared environment are lost, undermining the economic business case that makes cloud computing a compelling concept.
However, a third approach is starting to get serious attention. For vertical industries, where businesses have similar goals, a community cloud can offer a very high value proposition. In essence, it is a best of both worlds scenario. It captures the significant benefits of scale and higher utilization rates offered by public cloud services while retaining the security and reliability of a private cloud.
The benefits of a community cloud have generated a great deal of interest in the air transport industry. Such a cloud can provide a platform for delivering common business applications and processes, and other IT services, while also ensuring that they conform to the accepted standards and practices of the industry. It also represents a unique opportunity for the industry to move away from the legacy technologies on which it depends and capture the benefits of the digital revolution.
A cloud for all seasons
In the current economic climate, cost is clearly one of the main drivers. Greg Ouillon, Head of SITA’s Air Transport Industry (ATI) Cloud program, which launched in Summer 2011, says SITA is working with one airline that has been able to directly save 20–30% on its IT costs. “You can get rid of servers, personal computers, applications, and licenses,” he says. “With the cloud, airlines only pay for what they use in a secure and high performance environment.”
As befits a cloud concept, however, there are a host of intangible advantages brought about by a fundamental shift in the way airlines will approach IT. “It turns computing from being a product to being a service,” says Ouillon.
In the cloud, staff have complete access to company systems wherever they are, boosting their mobility and productivity. No longer will work mean being deskbound using a workstation or office laptop. This has benefits enough on a day-to-day basis, allowing workers to access real-time data during an offsite meeting, for example. But the real boon will be in rapid response times to an unforeseen event. “All available personnel can immediately log on to carry out their work regardless of where they are,” says Ouillon. “Just an iPad at home is all they need.”
Some airlines reported as many as 500 extra staff needed to be drafted in when the Icelandic volcano erupted in 2010. Such expensive solutions could include the need for basic training, extra equipment, and result in tardier customer service. A community cloud potentially negates all of that as it would allow all existing employees to be part of a solution.
Malaysia Airlines has begun to investigate cloud technology. Abdul Mutalib, Vice President, Retail Business and Distribution, says the airline has tested the technology with a proof of concept on the community cloud. “The cost reduction opportunity, being quick to market, and a requirement for mobility are driving the project,” he says. There have been challenges though, including service level agreement negotiation and ensuring active directory synchronization between the provider and MAS to provide a single sign on.
Changing with the wind
It is the inherent agility of the cloud that will define its future. From the restrictive legacy systems of old, airlines have moved towards ever greater freedom in their IT architecture. The cloud represents the conclusion of that journey.
It hasn’t come a moment too soon as an increasingly volatile market demands equally fast-moving airlines. “IT infrastructure used to be very cumbersome and rigid—both physically and in terms of what it allowed,” says Ouillon. “It was very expensive to make changes. Now airlines can rapidly adjust to market conditions for a fraction of the cost. Because the applications and the data are hosted offsite it is a very simple matter to scale up or down according to demand. Changing locations is no problem either.”
But it is not just about what the cloud can do. For the air transport community, cloud computing is an advantage in itself. Its pervasive nature means there is ample scope to develop cooperative platforms in various industry sectors. The buying and stocking of spare parts might be one area that could benefit from a communal zone in future.
This is not to say airlines will lose differentiation, however. Customer-facing technologies will also benefit from the cloud as it should actually provide much greater scope for demarcation in customer services.
Common-use kiosks, for example, usually work off local servers that do indeed force a degree of compromise because of the fairly restrictive infrastructure. The cloud has no such shackles and so offers huge flexibility within the common-use parameter. It will give airlines greater brand control and really raise the bar for common-use technology. The challenge is getting more airports involved in the community cloud as this will give them the opportunity to offer a solution that benefits the airport, the airlines, and the passengers.
Fuzzy round the edges
IATA is working on an industry strategy that will encompass cloud technology. Paul Behan, Head of Passenger Experience, says questions are centered on whether cloud computing will be for direct customer facing systems and solutions or whether it will target operational areas such as airport systems. “Is the cloud resilient and responsive enough for real-time 24/7 operations?” he asks. “Also, we need to understand how the cloud will be utilized in the current IT infrastructure. Many airline systemsare of a very old vintage and so are not necessarily so easily adaptable today.”
Behan acknowledges, however, that many large carriers are moving to modern integrated platforms that offer a range of opportunities, including the cloud concept. Implementing a private cloud strategy has few hard and fast rules though. Time and cost really depend on the size of the airline and the existing level of IT infrastructure and applications. For a smaller airline simply looking to migrate basic programs such as Microsoft Office products it can be done quickly and cheaply. Other airlines that have complex systems that interact with a number of partners will have to be more patient and dig deeper into their pockets.
What is clear for the community cloud is that the level of investment cannot be compared with major IT innovations from previous generations. The community cloud doesn’t need capital investment from the airline as this is set up by the cloud provider. For the airline it is more about stripping away hardware than adding to it.
Security is always a concern with airlines worried about losing control of their data and having sensitive information accessed by other parties. Clearly, every possible precaution will be taken and regulators around the world are working to ensure that encryption technology satisfies all requirements.
Cloudy days ahead
The cloud is an interesting concept. For public clouds in particular there are security and data issues and it is yet to be proven that the cloud will indeed offer real-time access to thousands of workers at any one time. There is also the question of how to provide reliable connections in areas of the world where Internet access is still patchy. But the potential of greater speed, agility, and reliability seems too good to ignore under current market conditions.
Response to the air transport community cloud has been very positive, covering airlines large and small as well as all regions. In Asia, the interest is in the way the cloud can facilitate efficient growth as it can be scaled up so readily. In the United States and Europe there is a greater focus on reducing cost. But in all cases, there seems to be an acknowledgment that the cloud does indeed have substance.