3 New Reasons to Choose Cloud Over On-Premise

Lets face the facts. Larger or high-end enterprises are reluctant to choose Cloud over On-Premise solutions.

The current trend is that secondary services such as Channel Management and Revenue Management can be moved to the cloud, but core systems such as the PMS require an on-premise solution.

But current trends are rarely predictive of future success. Peter Drucker, one of the founders of modern business strategy, taught that leaders must look past current trends and instead focus on the changes in current trends which may lead to future opportunities.

Below are 3 new reasons that will help change the trend from On-Premise to the Cloud.

The Reliability Myth

Reliability and stability is one of the key metrics for any hotel management software. The traditional belief is that On-Premise systems are more reliable and stable.

This is a myth because locally sourced hardware is just as prone to failure as hardware that belongs to the cloud. In fact, On-Premise servers are more susceptible to fires, power outages, corrupt data, and physical theft because the hardware is not maintained in a professionally maintained Data Center.

What makes things worst is that the IT Administrators in the hospitality industry have high turnover rate. After a few years, it is common for new IT Administrators to know very little about the existing infrastructure, maintenance, and support needs of an on-premise solution.

You’re Big Database is Already Late

Data, more specifically Big Data, is the new oil of the future. This is because Big Data enables hotels to find competitive advantages, gain awareness over all aspects of business operations, and unlock innovation. Those hotels that have Big Data will prosper, those that do not will not be able to compete with the next wave of competition.

Data is the fuel that will allow the newest Yield algorithms to calculate the best rates. Data is the fuel that will allow future AR/VR applications to automatically notify your front desk who is a VIP List and who is on the Blacklist. Data is the fuel that will power future Robots so they will know which room to deliver a toothbrush.

Every new innovative feature you will want to use in the future will require access to a hotel’s cloud-based Big Database. This database needs to already be filled with years of operational, finance, customer, partner, employee, and transactional data.

Those hotels that do have a Big Database will be able to immediately reap all the benefits of leading edge technology. Those hotels whose data are fragmented, offline, and inaccessible will not only have to make an expensive switch, but will have to spend years rebuilding their database. In this day and age, time is something we cannot afford to give to our competitors.

Time to Value Ratio

Slow + High Value = Bad

Fast + Low Value = Bad

Fast + High Value = Good

(Slow + Low Value = Really Bad)

Cloud-based implementations significantly reduce the time and complexity needed. By reducing the time and complexity, a business is able to realize value from the project sooner.

Cloud-based systems are setup and configured remotely so that project teams can begin implementing immediately. Everything from account creation to configuration can be done online which removes the lead-time needed for each project. Also, infrastructure such as hardware servers, databases, and support teams are already in place with prepared rapid implementation procedures.

OK so we’ve established that cloud-based systems are fast…so what’s the big problem?

Most cloud-based systems are low value systems.

It takes a long time to accumulate the industry experience and knowledge to develop a full comprehensive management solution that can support professional multi-property enterprises. Anyone can develop a simple check-in/check-out system in a week (and many have done so). But, any industry professional will tell you that well-managed hotels require a comprehensive management solution that covers all aspects of the business such as Front Desk, Back Office, Guest Management, Cashiering, Membership, Reporting, OTA/CRS, Hardware Integrations, and more.

In the current marketplace, there are very few high value cloud-based systems. Luopan is one of them and is one of the only cloud-based PMS providers who can support the complexities of full-service hotel enterprises.

About Michael Li

Michael Li, Director at Luopan, is responsible for product development, international business development, and he’s also the chief coffee maker. He has worked on creating hotel technology solutions such as PMS, Channel Managers, Websites, Booking Engines, and Mobile APPs. He has also led large hospitality project implementations and software integrations.

Michael has a BS in Cognitive Science from the University of California, Los Angeles. For more information, contact Michael at mli@luopan.com.

About Luopan

Luopan is Asia’s most trusted provider for cloud-based hospitality management solutions including PMS, Channel Manager, Website, Mobile APPs, and more. Learn more at www.luopan.com.