<B>Booking Surprise</B>
<I>Microsoft Mandates Use Of Online Entrant Highwire</I>
By Jay Campbell
Signaling that competition can thrive on the large-buyer end of the automated booking market, Microsoft Corp. has domestically mandated a virtually unknown booking tool provided by Seattle-based Highwire Inc.
Microsoft made the switch to Highwire's Travelport from the AXI product it co-developed in 1997 with American Express. American Express now hopes it can bury AXI by the end of May in favor of its GetThere-developed CTO product, assuming clients are ready by then.
Less than three weeks after a March 15 mandate that 25,000 travelers use the Highwire product for domestic trips booked at least 48 hours in advance, Microsoft already exceeded its usage of AXI, which over a three-year span never achieved its original goal of handling half of tickets issued, peaking at 25 percent.
That Microsoft did not go with Sabre's market-leading GetThere unit is not a surprise, given the cutthroat competition between Microsoft's Expedia and Sabre's Travelocity. To say the least, Microsoft and Sabre have a mutual distaste.
In selecting Highwire, though, Microsoft contracts manager for global travel and relocation Jill Donnelly said, "The big win for us was the aggressive timeline. From when we knew we'd use Highwire to the launch on the intranet was eight weeks and that covered Christmas and New Year's--and they did not revoke any features for that timeline."
Donnelly said Highwire's Microsoft implementation team included a product manager, project manager and developer. She agreed that being Highwire's first big account was partly responsible for drawing extra attention. "They made their strategy meet what we needed," Donnelly said.
Others factors Donnelly cited included low pricing, even for "significant customization," and Highwire's ability to integrate with Microsoft's intranet to offer travelers a common user interface and single sign-on based on American Express' existing profile system. Travelport also integrates with Amex's proprietary faring system, the Preferred Rate Database System.
Not a factor, however, was the recent marriage of Highwire CIO Ken Warman to Microsoft manager of global travel and events Zoe-Ann Bartlett, who removed herself from the selection process because of the obvious conflict of interest.
Microsoft is seeking 60 percent usage of the system and 50 percent savings on fulfillment, provided by Microsoft's local American Express office. Already, the "guilt factor," as it's known in the Microsoft travel department, is driving users to select fares in Travelport that on average are 20 percent less than the company's average ticket price, though Donnelly deemed it unlikely that that number would hold up in the long run.
Microsoft created the mandate's 48-hour window to be "extra careful" and provide time for file finishing, but the company is considering dropping the window to 24 hours. All international passenger name records, meanwhile, still flow through the American Express rate desk.
Clearly, the deal is a boon for Highwire, which previously only revealed testing with Amazon.com and Nordstrom (BTN, June 12, 2000). Now the company's challenge is to prove itself with Microsoft in an attempt to move 30 other customer sites from "soft" to "hard" launches--as well as gain new clients.
"I believe the second quarter will be when everyone says 'I'm mandating this now,' " said Highwire co-founder Marka Jenkins, who also is president and CEO of Metropolitan Travel in Seattle. "Companies will be looking that way because the economy has changed so much. I know in Microsoft's case this will bring them 20 percent savings, and they already had a well-managed program."
Highwire created Travelport using Galileo's XML Select, a structured data application programming interface with which developers can integrate data from the Apollo system to create Web-based booking engines and other applications. Galileo owns a piece of Highwire, and Apollo is the only global distribution system from which Travelport pulls fare and schedule information. The Highwire product initially was designed for the middle market, but Jenkins said she found large-market needs were not all that different.
Meanwhile, Sabre's purchase of GetThere has made GetThere's substantial Galileo customer base a bit uneasy. All around, executives at Galileo, Sabre and GetThere have assured the market that GetThere-Galileo users should not be concerned that Sabre now owns GetThere, but that doesn't mean buyers are convinced.
For some, it means there is a void in the market for reselling booking tools by Galileo-based agencies. Jenkins said Highwire is on the verge of announcing new agency distribution partnerships, but she would not name them.
Bob Lichtman, a partner in The Corporate Solutions Group based in Incline Village, Nev., said there is "probably" some fear in the hearts of Galileo users regarding market-leading Sabre. "But to me, it would be lunacy to select a system purely based on which GDS is involved, even with enticements," he said. "And are there corporations getting enticements from the associated GDS? Yes."
GDS usage aside, Lichtman said there are a number of companies seeking an alternative to Sabre, including several of the Corporate Travel 100 accounts and existing GetThere customers. Lichtman suggested that Sabre is alienating some customers by increasing fees for existing BTS contracts (BTN, Jan. 29), particularly in light of the fact that it is not the BTS platform to which customers ultimately will migrate.
Norm Rose, president of Travel Tech Consulting in Belmont, Calif., has heard similar stories, at least anecdotally. "My sense is that while there are a lot of assurances from GetThere that things remain the same, between the lines things have changed," said Rose.
"They are risking their customer base, their credibility," said Lichtman. "I know of other companies, even larger than Microsoft, that are looking at other suppliers. I guess it's just human nature when you have one company controlling so much of the marketplace. Very few companies want to get involved with a neo-monopoly organization, for fear their wishes won't be looked after."
Indeed, one strategy for BTS users is to look at alternatives if only to get better pricing for what will end up being the GetThere platform.
Asked whether there were plans to "sunset" BTS, GetThere COO Jeff Palmer late last month said, "We've had a sunset in terms of sales to new customers, and we're making the combined platform a very evolutionary product, avoiding any big bangs there in terms of the change." The new, multi-GDS platform will be available "later this year," said Palmer, but "we're in discussions with numerous BTS legacy customers interested in transitioning sooner rather than later."
As far as meeting customer needs, a company spokesman cited the sheer size of GetThere as evidence of its customer service and support capabilities. Further, he noted, no product has shown return on investment for more clients--even as the highest-priced vendor in the marketplace.
Still, the Microsoft news gives the Highwire product an entrée into the larger-account market shared by American Express' CTO, E-Travel's E-Traveler, Sabre, TRX's ResAssist and Worldspan's Trip Manager. Another product, PowerTrip by Xtra On-Line, appears to be in flux, as its primary distribution partner, Rosenbluth International, seeks closer ties with E-Travel (BTN, March 12).
"The reality is this is a challenging world for Internet companies," said XOL CEO Bill Diffenderffer. "Our relationship with Rosenbluth is a little bit in question, but they keep putting customers on us, including one recently." He said recent internal issues have kept the company relatively quiet, but "we'll have something big. We do need to make something happen in terms of a deal that will allow us to compete with the GetTheres of the world. We can't win from where we are."
Galileo, meanwhile, is behind schedule on the release of its Corporate Travelpoint 2.0 product, which is par for the course when it comes to technology development in general. Though it originally was scheduled for release earlier this year, the product (not to be confused with Highwire's Travelport) now is in soft launch with five corporate customers following a number of demos. Galileo views its partnership with Highwire as complementary to those efforts.