If you have been around the technology industry for any length of time, you have encountered a number of “buzz” words. One of the latest is “Cloud Computing” and you are probably asking yourself – What is it and why do I care?

Cloud computing is a term used to describe a variety of computing models that involve a collection of computers housed in a secure facility accessed through a network connection, typically the Internet. However, cloud computing isn’t new, in fact it has been around since the early 1950s.

Large-scale computer systems date back to the 1950s when mainframe computers were available to corporation and accessed over a private network via what is now referred to as “dumb terminals”. These facilities were referred to as “service bureaus“ since they provided a 24 hour service to the subscribers.

While the advances in technology have increased significantly over the last 60 years, the concept remains the same – shared services at a reduced cost. There are those that would argue that the “Cloud” systems of today are very different then the service bureau of the past, but the underlying business reasons remain the same; provide a service at an overall reduction in cost. This concept spawns another technology “buzz” word – Software as a Service or commonly referred to a SaaS.

The terms “Cloud Computing” and “SaaS” are not new to the hospitality industry. In fact, all of the central reservation systems (CRS) in use today whether branded or independent are basically cloud systems operating under the business model of Software as a Service (SaaS).

With all of the technological advances over the last few years, many software providers including property management systems (PMS), point of sale (POS) and even telephone systems (PBX) are offering their software in the cloud as a service. This has had the effect of really driving down the “Total Cost of Ownership – (TCO)” and has opened up the market so even the smallest properties can now afford these systems at a reasonable price.

You may ask yourself; why do I care? There are a variety of benefits that are inherent in subscribing to a cloud based system or Software as a Service. Given that your primary responsibilities are managing your inventory and rates and delivering superior guest services. The daily task of managing your information technology infrastructure is now outsourced to an organization whose primary responsibilities are to manage these tasks.

• Accessibility – with a property based solution you can only access your information when you are physically on site. However, with a cloud based solution you have access anywhere you have an Internet connection. Additionally, with the advances in mobile technologies many companies will offer application connectivity via smart phones and tablets. Multi-property owners/operators can access information on all of their properties from a single location allowing better use of their time.
• Information Security – the responsibility for securing your computer systems and protecting sensitive information rest with the property, however, by utilizing a cloud solution this responsibility shifts to the service provider who has far more experience in providing these types of services.
• Payment Card Industry (PCI) Compliance – protecting sensitive credit card data traditionally is the responsibility of the software provider. The majority of software providers will encrypt or tokenize the credit card numbers so even if an intruder gains access to this data it is un-usable.  However, even with these safeguards many properties still store credit card data in un-encrypted format not realizing the liability they are exposed to if their systems are breeched. A responsible provider of a cloud base solution will run periodic scans of the data to ensure no un-encrypted credit card data is stored in their systems.
• Software Maintenance and Upgrades – while software upgrades and periodic maintenance of the system is usually the software vendor’s responsibility, it still requires the property to execute the procedures issued by the vendor. This can be a time consuming process and best performed by technical personnel trained to execute such tasks. In a cloud base solution, the service provider executes all of these sorts of tasks, often with no disruption to the property operations.
• Hardware Refresh – we all wish that our computers would last forever, but the fact remains they need to be refreshed periodically. The properties would still be responsible for the workstations on property, but the more expensive servers would be upgraded and maintained by the service provider. All the environmental and operating system software would also be upgraded and maintained by the service provider as required.
• Scalability – as your requirements grow over time, you may want to add workstations. Most service providers don’t charge by the workstation, so you can add as many workstations or mobile devices that you want without additional cost and the responsibility to ensure good system performance is the provider’s task. Whereas, if you owned the system and wanted to add additionally connectivity, you may have to upgrade your hardware to achieve acceptable performance.

While these are just a few of the many benefits to cloud computing, they are significant enough to consider this approach when evaluating your next system upgrade or replacement.

Cloud Computing is the result of evolution and adoption of existing technologies and paradigms.  The goal of cloud computing is to allow users to take benefit from all of these technologies, without the need for deep knowledge about or expertise with each of them.  The cloud aims to cut cost, and help the users focus on their core business instead of being impeded by IT obstacles

• Patrick Barfield is Sabre Hospitality Solutions’ Director of Strategic Sales