Hotel chain bets on AWS migration for cloud IT strategy
Choice Hotels has placed its technological future in the hands of AWS. Choice's CTO says it's the right move at the right time, the potential for lock-in notwithstanding.
Choice Hotels has booked an extended stay at AWS as it goes "all-in" with its tech portfolio on the cloud platform.
The hospitality company has a complex corporate structure, with franchises and properties spread across a variety of price points and brands, from budget options such as Econo Lodge to high-end names like Ascend and Cambria. That means Choice Hotel's IT goals include not only automation, but also providing more personalized guest experiences and deeper insights into its diverse customer base.
Several years ago, the company found itself with a vast array of legacy apps in an increasingly fractious market. "We knew we had to evolve," said Brian Kirkland, CTO of Choice Hotels.
Choice Hotels began work on choiceEDGE, a new global reservation system built on top of AWS. It has since rolled out choiceEDGE to its franchisees. The company also built a property management system with AWS, and other core systems, such as data analytics, now reside there as well.
The company plans to continue its AWS migration over the next few years, on an app-to-app basis, Kirkland said. Some will be retired and replaced, others rehosted and rearchitected.
Brian Kirkland
"If it was just a lift and shift of all systems, when you land you're not taking full advantage of the cloud," he said.
To go all-in with one cloud vendor may provide economies of scale and hone a company's IT strategy, but the specter of lock-in looms large. Choice Hotels mulled the lock-in question, but moved forward with its AWS migration after it determined Amazon would be the most innovative cloud player over time, Kirkland said.
"The way we're leveraging the system, we understand what we're doing and what we're committing to," he said.
AWS migration taps data analysis, machine learning
Choice Hotel's franchise model means the company's IT strategy must address two groups of customers -- franchisees and their guests -- although it doesn't necessarily change its technology procurement strategy.
For the latter group, Choice Hotels wants to adopt more machine learning capabilities, which will help them better understand customer behaviors and desires.
In the past, a customer might use a travel agent who would make a single search a day on their behalf, but today customers shop for rooms on their own with scores of searches based on a slew of different characteristics, Kirkland said. Other data sources that allow for deeper analysis include mobile apps, surveys and loyalty programs.
Overall, Choice Hotels wants to tap into this rich data pool for insights so it can deliver an improved guest experience, he said.
More enterprises take the all-in cloud plunge
Choice Hotels isn't the only AWS enterprise customer to put the majority of its core tech on the platform. Other notable examples include Capital One, Time Inc., Santander's Openbank and Epic Games. "Large enterprises finally trust the cloud enough to put some of their crown jewels in there," said Hyoun Park, founder and principal analyst at Amalgam Insights in Arlington, Mass.
Large enterprises finally trust the cloud enough to put some of their crown jewels in there.
Hyoun Parkanalyst, Amalgam Insights
For many companies that significantly invest in a cloud platform, the tradeoff is vendor lock-in, which is a longtime enterprise IT concern. However, IT organizations moving to the cloud are less worried about lock-in than the speed of innovation, Park said. "AWS is answering the questions IT needs to move forward with an all-in approach, especially in markets such as hospitality where the current stack of tech may be outdated."
Many enterprises take a multi-cloud or hybrid cloud approach to hedge their investments, cherry-pick the best capabilities from various providers, and address the realities of heterogeneous environments they may have inherited through acquisitions or other means. Nevertheless, giving everything to one IaaS provider is a valid strategy if enterprises weigh the value provided by the IaaS vendor versus the cost of lock-in, said Holger Mueller, an analyst at Constellation Research in Cupertino, Calif.
The good news is competition among the biggest IaaS vendors will keep prices in check. "For the next three to five years CIOs don't have to worry too much about cost disadvantages from lock-in," Mueller said.
Enterprises should evaluate a move to the cloud as a long-term strategy, and weigh whether their IaaS vendor will be as innovative in 2024 as they are in 2019, Mueller said. They also should consider whether an IaaS provider will become a direct competitor to the customer in the foreseeable future.
That dynamic is present in the retail industry, where the likes of Target, Kroger and Walmart have shied away from deep ties to AWS, given its massive e-commerce business and its purchase of Whole Foods' brick-and-mortar retail. Kroger instead has partnered with Microsoft Azure on a new technology stack for retailers, which it will use in its own supermarkets and also license to other chains. Walmart likewise has partnered with Azure, and also maintains an OpenStack private cloud.
Brian Kirkland
