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| Zombie image courtesy of Farelogix (airplane made out of dollar bill and dinosaur courtesy of Solutionz Media) |
Thanks to Jim Davidson of Farelogix for the fodder for my blog today. It had been a little while since I’d taken time to write and I so love new inspiration!
The Global Distribution System companies (aka GDS – Amadeus, Sabre and Travelport’s Apollo, Galileo and Worldspan) have long been dubbed as dinosaurs. In a recent article by Jay Campbell of the Beat, Airline Direct Connect (provided by Farelogix and others) has a new moniker – the Walking Dead (aka Zombies).
[the Beat is a subscription only newsletter, but worth the money if only for the spirited banter that is sure to emerge between Jay and Jim over this article]
The fact of the matter, as Jim so aptly brought out in his tome is that this is a very complex matter. Indeed!
While technology plays a central role in this argument, from where I sit, it is really about business models, ecosystems, litigation and yes, even egos (gasp).
The bottom line is that this is indeed a battle of the century, as there is an enormous investment at stake.
At this juncture, more than 34 years of R&D and marketing spending has been poured into the GDS, which if you count the Private Equity investment, now numbers in billions of dollars. And of course, let us not forget that the foundational investment was made by the very companies that are now challenging the status quo (the airline founders of the GDS).
Sandler Capital, the Private Equity firm that holds a majority share in Farelogix has certainly invested tens of millions, if not nearing a hundred million in the Direct Connect solution used by a wide number of airlines, including American.
Interestingly enough, in American Capitalism, there is no
birthright to either completely changing an ecosystem with a new
invention, nor is their a birthright to preserving the status quo.
As
the various players in this tableaux have found, all they can do is
either go on the offensive, or remain on the defensive in the attack on
the status quo.
He who has the most stamina (or perhaps the most
attorneys and the biggest war chest) wins.
Clearly the war rages on. Who are you betting on?
Stay tuned.