Why Google Matters in HP’s $800 Million Deal With Travel King Sabre Holdings

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Sabre Holdings logo Sabre Holdings has a considerable data trove. Its holdings span reservation systems for airlines to the online travel service Travelocity.

Its databases are spun out across the network. There are databases for IBM mainframes, Oracle systems and those that serve its online services. Pooling that data could be a gold mine.

That’s where HP Enterprise Services comes into play. HP announced an $800 million deal with Sabre this week that will span more than six years. In the first 12 to 18 months, Travelocity will phase out its Cisco network and EMC storage and replace it with HP Networking and 3Par storage.

The reason for the change out comes down to the data. 3Par is an intelligent storage solution that gives Sabre the opportunity to manage its data more efficiently. That’s important, especially considering that there’s a new upstart in the market.  And that’s Google.

Sabre certainly provides legacy technology. It was originally built by American Airlines in the early 1970s. In 2000, Amercian Airlines spun out the technology infrastructure as Sabre Holdings.

Travelport. Sabre’s main competitor, was formed in August 2006, when Cendant sold Orbitz Worldwide and Galileo to The Blackstone Group in a deal valued at $4.3 billion.

Consolidation has a tendency to keep innovation at bay. But with Google looming in the background, there’s a certain pressure facing these kingpins.

Why? Google’s success comes in how it uses data. If Sabre does not innovate, then it faces a threat from a company that is arguably the most data efficient company in the world.

In 2010, Google acquired ITA Software, a company founded in 1996 by a group of computer scientists from the MIT Artificial Intelligence Laboratory. QPX is its core technology. You can see a demonstration of it here. It is used by such airlines as Orbitz (a Travelport company), Bing Travel, Kayak.com, CheapTickets, and airlines such as American, United (an HP Enterprise Services customer), US Airways, Virgin Atlantic, Alitalia, and ANA

Constellation Research CEO Ray Wang explains that Sabre is at a point where it has to innovate. Itss systems have not adapted to the advent of social technologies. It can’t use the data it has in an effective manner. For instance, it can’t do demand based ticketing. With its current technology, it can’t readily access transactional data.

“The beauty where 3Par comes in?,” Wang said. “They now have ways to start dealing with big data. They can federate across the world.”

The HP Networking technology does give Sabre more flexibility in the data center. It’s an interesting play. The technology uses OpenFlow, a software defined networking that opens up the data center network for data to flow more efficiently. That’s critical for Sabre, especially as the competition intensifies in fast growing economies such as Asia and Brazil.

Services Angle

Travelport faces the same challenges as Sabre. Its legacy technology is no match in the brave new world of data driven markets. It’s unclear what Google will do with ITA. Google has a deal with the U.S. Justice Department to continue licensing the ICQ technology until 2015. That’s not too far away.

Russ Krauss, Vice President and Chief of Staff for HP Enterprise Services said in an interview that Autonomy technology may be integrated into Sabre’s solution. That’s an interesting possibility. But I wonder how that would help a company like Sabre face Google, arguable the world’s most threatening data powerhouse.

About Alex Williams

Alex Williams is an editor for SiliconAngle and lives a charmed life in Portland, Or.