The Value of Software as a Service (SaaS) for the Travel...

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Galor Systems and Software Development Ltd.

Azrieli Center 1, 67021 Tel-Aviv, Israel | Tel. +972-3-6076300 | Fax. +972-3-6076310

Email: [email protected] | Website: www.travelbooster.com

The Value of Software as a Service

(SaaS) for the Travel Industry

Published by Galor Systems & Software Development, March 2009. This publication may be

distributed freely in its entirety. Content must not be changed.

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Executive Summery

This paper provides a comprehensive overview of Software-as-a-Service (SaaS)

from the perspective of the travel market. Topics include a description of the SaaS

business model and an explanation of how the service works. This paper brings to

light recent market research regarding trends and mainstream adoption, along with

an explanation of the specific advantages of a SaaS solution over on-premise

applications for the travel industry. The paper concludes with important tips on how

to choose a high-quality SaaS provider, such as finding a trusted industry expert with

experience and a full support team, and always checking security services to ensure

your intellectual property and data is protected.

What is SaaS?

Quite simply, Software as a Service (SaaS) is a service that allows you to outsource

the technical aspects of your business. By finding a good SaaS provider, you can

eliminate the worry about purchasing, installing and maintaining software or

hardware, and focus on managing and expanding your business.

The SaaS model is expected to become an important alternative - especially during a

financial crunch - not only for larger companies but also for small and medium

businesses with low budgets for IT. Since a traditional IT budget is made up of an IT

team, SW licenses, and equipment such as servers, Saas offers a significantly

reduced TCO (total cost of ownership). This is due to low cost of deployment, no

expensive equipment purchases, and the ease and speed of implementation. As

SaaS is often put into service on a pay-per-use basis, or subscription based on

usage, this further reduces corporate expenditures.

The right SaaS provider offers a business approach to ease your decision-making

regarding IT and will reduce your budget. Implementing SaaS also eliminates the

time spent for upgrades and maintenance.

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SaaS provider handles:

Implementation

Updating

Troubleshooting

Patching

Monitoring & administration

Backup and storage

Upgrades and everyday support

Eliminates need for software or hardware purchases including servers

Mainstream Adoption & Market Growth

Without a doubt, mainstream adoption of SaaS is growing in leaps and bounds, and

is no longer considered a solution for early adopters or large conglomerates only.

A recent THINKstrategies report (on behalf of Salesforce), entitled “Why SaaS and

Cloud Computing Solutions are the Perfect Remedy for Today’s Scary Economic

Times”, demonstrated the significant turn in adoption for SaaS solutions.

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Additional data from Gartner's “User Survey Analysis: Software as a Service,

Enterprise Application Markets, Worldwide, 2008” demonstrates that SaaS is

becoming more mainstream. 60% of respondents have used SaaS for more than two

years, which is “indicative of projects moving beyond a pilot stage to becoming a part

of the respondents' enterprise application landscape.”

Moreover, 66% of respondents believe SaaS investments will increase, and new

spending associated with SaaS is expected to increase.

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In a separate 2007 report, Gartner predicted a $19.3 Billion SaaS Market by 2011

with a compound annual growth rate of 17% for Small and Medium sized businesses.

Gartner predicts that by 2011, 25% of new business software will be delivered as

SaaS. Market analyst IDC estimates that “by 2011, this opportunity will reach $14.8

billion, representing a compound annual growth rate (CAGR) of 32%.”

Market analysis firm IDC recently published its market size projections for SaaS in

2009, given the financial crisis “… the harsh economic climate will actually

accelerate the growth prospects for the software as a service (SaaS) model as

vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise

applications. Buyers will opt for easy-to-use subscription services which meter

current use, not future capacity, and vendors and partners will look for new products

and recurring revenue streams.”

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Benefits of SaaS vs. On-premise Applications for the Travel Industry

Many tour operators and travel agents are small or medium sized businesses that

have the need for computerized solutions, but not the budget to invest in hardware

and infrastructure. Most would prefer to focus on successfully managing projects

than worrying about purchasing, installing and maintaining software or hardware.

Most small or medium sized tour operators operate with an IT budget that is made up

of infrastructure, SW licenses, and manpower salaries. Monthly delays due to backup

or system upgrades are times when the team is not able to work productively and

must be taken into consideration.

Integrating a SaaS based solution means finding a provider to alleviate the burden of

maintenance, ongoing operation and support, and impacts business processes,

administration and people.

A good SaaS provider can offer a quick and significant ROI using a calculation based

in factors such as benefits, risks, flexibility of the deployment, security and of course,

cost.

SaaS On-premise

Deployment in a matter of days or weeks Deployment of months, or years

No upfront costs, pay-as-you-grow Heavy capital investment in equipment,

consultations and staff

Minimal IT staff Large IT staff

No SW licenses Renewal and purchase of SW licenses

High security, low hassle Security configurations needed, firewalls,

etc

No maintenance Ongoing maintenance costs

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How does it Work?

SaaS is based on an open communication protocol so the software, which resides at

a hosting facility, can interface with virtually any external system.

Applications are accessed using a web browser or other web service, so all the user

needs is an Internet connection.

Pricing is generally based on system usage, with some form of ongoing royalty or

subscription fees. This means that fees are controllable and can vary according to

usage, so user determined budget according to amount of time spent on the system

and applications accessed. Fees are typically based on active users within the

system for a month or other defined period and include ongoing support and regularly

scheduled software updates.

What to look for in a SaaS provider?

There are a number of elements to consider when evaluating a SaaS provider.

Industry expert – Ideally you want to choose a provider who is familiar with the travel industry. Familiarity with your specific vertical market ensures the solution that is tailored to your needs.

Experience – Finding a Saas provider with a solid customer base who can prove their capabilities.

Team – ensure the team who will be servicing your business knows the ins and outs of your industry.

Support – make sure your SasS provider includes implementation support, help desk, and training in your agreement.

Security – always check security services are included. This includes backup, recovery, encrypted data, firewalls, and unique ID and password access.

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About Galor

Established in 1989, Galor is a leading supplier of travel technology, boasting a client

base of over 700 customers and innumerable users in 26 countries around the globe.

Galor was founded on the belief that to promote growth in the global travel industry,

sophisticated but simple technology must be accessible to all. Our vision is to

upgrade the industry by introducing cutting edge technological solutions that answer

the evolving needs of the market, reducing costs while expanding business

opportunities.

Based in Israel (the second Silicon Valley), our highly experienced international team

of executives includes over 70 people focused on excellence in development,

product application, customer support, training, installation & implementation,

administration and finance.

About Travel Booster:

Travel Booster is a SaaS based end-to-end tour operator software with a complete

suite of front, mid & back office tools. The product acts as a hub for a range of

different services that include single components such as flights, hotels, cars,

attractions and tours, as well as dynamic packages, static packages and shopping

cart options. Members of the Travel Booster community can access the system over

the internet anywhere and at any time and effortlessly load and manage their own

content as well as integrate with GDS and third party interfaces.

With an intuitive web based interface, Travel Booster includes all the tools necessary

to handle reservation, operation, administration, and financials.

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