WTP Tech Sister To Acquire ISP

<B> WTP Tech Sister To Acquire ISP</B>

By Sarah Welt

WorldTravel Technologies announced last month that it had signed a letter of intent to buy International Software Products, the McLean, Va.-based data warehousing company. The deal is set to close within 30 days.

Under the terms of the agreement, ISP and WTT's independent technology companies--Travel Technologies Group, which licenses its software to independent travel agencies, and Online Fulfillment Services, which services Microsoft's Expedia--plan significant joint product development.

A similar deal with another top data processing company, whose strengths on the agency side mirror ISP's on the corporate side, also is expected to be completed soon.

"We both sell and license software to leading travel suppliers around the world. We both believe in providing clients with independent technology solutions, and most importantly, we both believe that the customer owns the data," ISP president Christopher Brittin said. He also noted that WTT and ISP already have worked together on data solutions for several customers, including Gillette and PepsiCo.

Added WTT president Danny Hood, "Corporations should have rights to the software licenses because no corporation wants to train all their employees on self-service reservations and build a data warehouse with our tools only to have it taken away when they change travel management companies."

Brittin and ISP founder Susan Hopley will report directly to WTT CEO Jack Alexander. In the near term, Hood said, WorldTravel Partners-BTI Americas likely will distribute a target list to cross-sell ISP's product and focus on integrating WTT's CoRRe pre-trip reporting system with ISP. The cash and stock deal will provide ISP with shares in WTT. "We are excited because we retain our independence and this gives us equity interest in the organization," Hopley said.

All this begs the question of whether the WTT companies will be the next travel technology candidates for an initial public offering, but only time will tell.

Alexander noted that WTT plans to actively market ISP to other companies beginning this fall. While he wouldn't comment on whether or not that would include agencies in the BTI global network, or more specifically, that one of those companies would be the U.K.-based Hogg Robinson. That would seem a likely choice in light of the new long-term partnership agreement signed with BCD Holdings, WTT and WTP's parent company (<I>BTN,</I> July 19).

The acquisition provides WTT with a core competency it previously lacked. While it has been able to leverage quite a bit of TTG's and Electronic Data Systems' technology, it did not have success developing its own data warehousing system. "We were not really good at that," said Hood. "Our strength is as a systems integrator." Hood said he would have a hands-off approach to "our software sisters. We have to have firewalls between us and ISP, like we do with TTG." Still the deal likely will give WTP, which ISP will treat as one of its clients, a foot in the door when it comes to bidding for new accounts or retaining business, since it will allow easy access to a wide range of products and services. "We view the move as very strategic. We can bundle products and services for a competitive advantage," Alexander said.

The deal also allows ISP, with 30 clients worth $3 billion in volume, to retain its name and continue marketing to corporations and other travel agencies under the WTT umbrella.

ISP and Carlson Wagonlit Travel client Joseph E. Seagram & Sons Inc. is not worried about the new alliance. "I have always been an ISP customer and I will always remain an ISP customer," said Seagram director of global travel management Earl Foster. "For clients like me, there will be virtually no change." Indeed, he noted that ISP needed a larger partner in order to be able to more broady apply its technology. "Up to now, it has been strictly travel--and other data warehousing opportunities exist in the marketplace," he said.

Mark Walton, principal of Consulting Strategies of Rolling Meadows, Ill., also saw the acquisition as a positive step for ISP. "This gives ISP a name and a financial situation that will allow it to continue to grow and better develop its product from a marketing and internal development perspective," he said. "The industry has been pretty limited in terms of third-party data consolidation. Obviously it is difficult to manufacture or there would be significantly more competition."

Walton noted that the relationship between ISP and WTT likely will not cause a conflict of interest, even though WTT and WTP-BTI Americas are closely linked.

"All ISP clients have a direct relationship with the corporation. All they are doing is dealing with data that by their contract with their client, to the best of my knowledge, is proprietary. Since WorldTravel Partners and ISP are two separate companies, I don't think they can share data. Even if they wanted to, what benefit would it provide a competitive agency? Everyone knows that General Motors is a $250 million account. If American Express was bidding on it versus WTP, what value would it be to know segment data that existed within the GM account? That does not define advantage for an agency in a bidding situation."

ISP's data consolidation and mining expertise becomes a critical component for WTP's TTG and OFS units, especially as WTT plans to launch Corporate OFS to handle the file finishing and fulfillment for tickets booking through corporate online booking systems. Corporate OFS will handle fulfillment for any corporation or agency. While pricing is still being determined, it likely will cost between $10 and $20 to issue tickets, instead of the $45 many are paying today for full support.

The new unit already has three customers slated to try its new service, one using ResAssist and two on other online booking products. In instances where a corporation is using both a full-service agency and Corporate OFS, it will be crucial to offer a service to integrate the data.

TTG debuted a new product called ProfileSync.com that will allow corporations to own and manage their own profiles. The profiles are stored on a database that can be accessed via a secure Web site. Both travelers and travel managers can access individual or group profiles to update preferences, cost center numbers, credit card or other data, which will then be uploaded to the GDS. Now available to all agency customers, the product will be offered to other corporations in the fourth quarter. Pricing details were still being finalized, but Reynolds said TTG will charge a set-up and monthly maintenance fee for each profile, perhaps $1 plus 25 cents maintenance. The offering currently works with Sabre and Worldspan, with Amadeus and Galileo to be available shortly.

TTG also announced significant enhancements to three other products, its ResAssist online booking tool, CRS Screen Highlighter point-of-sale software, and Meeting Assist end-to-end meeting application.

The latest version of ResAssist now offers hotel mapping, the ability to drag and drop itineraries into calendar applications, such as Outlook or Organizer, and search multiple airports for the lowest fare. TTG has licensed the product to more than 400 corporate customers of parent WTP or other agencies, as well as an additional 400 Worldspan customers using a private label version called Trip Manager.

Enhancements to CRS Screen Highlighter were designed to let large corporations maximize the POS tool for improved policy compliance and agency efficiency. Corporations can use the tool to book Southwest flights from non-Sabre GDSs or book corporate apartments or jets, Reynolds said. Most often, corporations use the tool to maximize use of their negotiated deals.

Hood also said a new version of the CoRRe mid-office product, called EnCoRRe, that can access the airlines' and other companies' databases to get the lowest fares over the Internet, is now in beta test and will be totally implemented by the end of the first quarter 2000.

--Mary Ann McNulty contributed to this article.