Tech Startup Simplifies Internet, Intranet Inventory
<B> Tech Startup Simplifies Internet, Intranet Inventory</B>
By Mary Ann McNulty
<I>Santa Clara, Calif.</I> - Taking Internet bookings to the next level, a start-up Silicon Valley company is marketing software that simplifies setting up an electronic storefront on third-party Websites, such as corporate travel intranets.
Focusing sales efforts on hotel companies, with Hilton Hotels as its first customer, car rental firms and then airlines, Ensemble Solutions, Santa Clara, offers software for those who want to distribute and control their inventory anywhere on the Internet or corporate intranets. Vendors simply license Ensemble's Travel eStore software for their network and distribute software via CD or downloadable files to the sites that want to be able to book their inventory.
Although the company isn't specifically selling its products to corporate travel decision makers currently, executives are well-versed on the potential benefits its Travel eStore and eVendor product, slated for release early next year, can offer corporations interested in direct bookings, managing the marketshare of their bookings and ensuring the corporate rate is booked every time. The big question for corporate decision makers is whether Ensemble's solution makes it easier than the existing process for travelers to book business travel.
For those who already have extranets to preferred vendors, Ensemble's offering might be an improvement. However, for those with integrated, third-party booking engines, it might be seen as more cumbersome than the existing process, said Bob Langsfeld, principal of Langsfeld, Fazio & Associates, Incline Village, Nev.
Beyond corporations, Ensemble offers a way for vendors to distribute their products at a convention and visitors bureau or meeting site or over "communities of interest," such as any of the millions of special interest Websites, said Chip Woerner, vice president of marketing.
Quietly developing the product and travel marketing strategy over the past two years, Ensemble plans to debut its offerings later this week at the New Frontiers in Travel Distribution conference in Phoenix.
Suppliers install a Channel Manager on their networks to serve as a secure gateway to manage real-time connections between their inventory and the Travel eStores located on other Internet or intranet sites.
Advanced programming, called object coding, and intelligent agents allow vendors such as Hilton to control the inventory that can be viewed and booked from each eStore and provide both the vendor and host site detailed reports on all transactions, said Woerner. In addition, once other vendors license eStore, these objects and agents can be programmed to handle multiple vendors from a corporate intranet or other sites.
Hilton Hotels is the first company to license eStore and is currently signing up associates that want to distribute the hotel inventory from their site. For example, a golf Website is expected to offer special packages at properties on or near golf courses.
Bruce Rosenberg, Hilton's vice president of marketing distribution, said "the technology is finding its own takers," as various sites suggest ways they can partner with the hotel chain. "We haven't pitched it to Fortune 500 accounts, although it can definitely be used in the corporate environment." Security concerns might even prompt some interest by corporations that want booking engines behind their firewalls in the future, Rosenberg said.
"In the future, I see negotiated rates based on eStore bookings, knowing that it reduces vendor costs" to book the reservation directory," said Scott Heidegger, general manager of travel for Ensemble.
Ensemble is pricing its product on a three-dimensional revenue model that includes a development and implementation fee for the vendor, a product licensing fee and transaction cost. For vendors paying GDS booking fees of $2 to $7, Heidegger assures that the bottom line costs will be "at least 50 percent lower."
An unnamed global distribution vendor even contacted Ensemble about the possibility of licensing its software to give subscribers access to inventories not stored in its system.
Two Sun Micrososystems executives, Jens Horstmann and Frank Spies, founded Ensemble after developing a trading engine for Wall Street. Since then, the two-year-old company has hired 30 employees and has received more than $3.5 million in its first two rounds of financing. It's currently out for a third round of venture capital financing.
The company has attracted some big names to its board and/or advisory board including Max Hopper, creator of Sabre; Gil Amelio, former president of Apple Computers; Philippe Kahn, founder of Borland; Steven Baloff, general partner at Advanced Technology Ventures; Regis McKenna, chairman of The McKenna Group; and John Burns of Pegasus' HCC. Top executives at the company include Eli Porat, former CEO of DSP Group, and Dee Cravens, former vice president of worldwide marketing at Adaptec.
Initially targeting travel and financial services--projected to be the two largest areas of business-to-business electronic commerce by 2001, Ensemble plans to expand into other markets.
For now, Ensemble is trying to capture a small portion of the travel booking space, estimated by Forrester Research to be a $327 billion market by 2002.