Building The Right Partnerships

By Patricia Brown
November 2003

Article URL: http://www.optimizemag.com/issue/025/customer.htm

Win-win deals. Intimate links. Long-term commitments to mutual success. These are just some of the catch phrases that vendors and customers alike use to define their ideal relationships. That ideal is typically represented by the term, "partnership," to give those who use it a sense that all parties are in this thing together.

But it is, for the most part, only an ideal. While there's little doubt that most vendors and users do their level best to achieve parity, the fact remains that many major enterprise initiatives for example, CRM, ERP, and supply-chain management haven't fulfilled their promise, to the consternation of those on both sides of the equation.

In fact, a significant percentage of vendor-customer relationships are stressed, if for no other reason than the fact that the normal, everyday dynamics of trade and commerce keep them on opposite sides of the negotiating table as they work toward signing the deal that links them for the duration of the contract. Technology providers must maximize their revenue, and users need to minimize their operational costs.

In this dynamic, the pendulum of influence constantly swings. Over the past two years, the economy has reduced demand, strengthening the hand of users who have hammered down prices while improving their value-added services. But equilibrium rarely lasts long. In recent quarters, we've seen increasing evidence that consolidation in the technology market is sapping excess capacity and giving vendors renewed leverage in their negotiations. It's bringing the pendulum back to center. Businesses and suppliers are managing to develop a joint vision that transcends the cyclical context of their relationship. In the pages that follow and on our Web site, we explore the nature of CIO/vendor partnerships.

Sabre Reserves Seats For Open-Systems Vendors

To maintain a leadership position in travel-commerce technology, Sabre Holdings has adopted a buy-versus-build philosophy for our IT infrastructure. As an extension, we take very seriously the need to choose a handful of vendors and create strong ties with these vendors.

The need for real-time data continues to grow in our industry as airline carriers and travel agents move much of their ticketing, scheduling, and customer service to the Internet. As a supplier to both of these customer segments, we have access to up-to-the-second information on flight prices and availability. Though the Sabre system was originally intended for expert travel agents, the Internet has led to a shift toward online shopping by consumers and businesses and has driven changes to our shopping and pricing technology. The keys to these changes are open-source solutions and horizontal scale.

One of our technical strategies is to identify the commoditization point as it moves up the computing stack the point at which buying technology is more effective and cost-efficient than building it. We've been successful in partnering with suppliers to put shared infrastructure components in place. In turn, we can leverage our developers' expertise to create new travel-commerce applications. In addition to strengthening the Sabre system's functional capabilities, the buy-versus-build philosophy for IT infrastructure permits greater emphasis on software performance, integration, interoperability, and reuse.

New hardware and software components are already in place to help us process critical data. Our next challenge is synchronizing data across heterogeneous systems, and we've worked with several good suppliers to help us solve this on our new shopping platform. We recently signed an agreement with GoldenGate Software to use its data-synchronization products to deliver our Air Shopping products, which are part of our Air Travel Shopping Engine platform.

Open systems and open source are attractive directions for us because they broaden our choice of suppliers. We're disciplined and deliberate about programming against open APIs, so we can port our applications to alternative platforms where it might make sense in the future. Yet we still find it essential to build strong ties with our vendors and create win-win intellectual partnerships.

Open systems and open-source software were critical to the recent success of our Air Shopping products even though they have only recently matured and come into commercial acceptance for the high-transaction volumes that were pioneered in the travel commerce market.

We're increasingly buying applications so we can shift our scarce resources beyond where we believe the commoditization point is and focus on where we can add real value. That's why we're strengthening ties with our strategic vendors. It's safe to say we save millions of dollars by maximizing our partnerships with vendors and open-systems providers.

Now, these aren't partnerships in the legal sense. I think that's the upside of open systems and open source. We're definitely programming against open APIs, which means the products themselves don't have stickiness and we can move from one to another pretty quickly. This creates a huge incentive, and it's the glue that holds business relationships together in an open-systems, open-source world.

The benefits of our close supplier relationships include evaluation of new products and the ability to share technology road maps and influence the vendors' directions. Our Product Development, Labs, and Architecture teams have worked closely with suppliers such as Hewlett-Packard and MySQL to deploy new low-fare search and pricing capabilities on a Linux-based server farm and NonStop servers.

We feel it takes both the user and vendor to build the best products. An organization like Sabre has a better feel for what the end customer wants, but the technology companies probably have a better feel for what's possible and for the state of the evolution of open source, such as the general public license and the commercial aspects of the technology. It takes both to drive the evolution to the next level.

Craig Murphy is SVP and CTO at Sabre Holdings.

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