Industry Update
Opinion Article21 December 2021

A Cautionary Tale About the Importance of Costs in Technology Acquisition and Service Delivery

By Aaron Shepherd, CEO and Co-Founder of APS (Above Property Services)

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They say that the only constant in life is change, and there is perhaps no better example of this adage at work than the world of technology. Technology is, after all, an agent of continued disruption. What once was will – at some point in time – no longer be, as innovation continues to rip the proverbial rug out from under our feet with one digital makeover after the next.

As new platforms and processes emerge with each passing year, our understanding of the world (and the way in which we interact with it) is subject to constant upheaval. We saw dial-up internet become high-speed connectivity, we saw the Walkman become the iPod, and then we saw the iPod cannibalized by the iPhone. We saw Blockbuster pushed out by streaming services like Netflix, and we witnessed (and likely partook in) the widespread embrace of formerly outlandish concepts like Uber and Airbnb. These evolutions represent incredible moments in history. In many cases, they also offer an important lesson to technologists and business owners who are eager to remain one step ahead of the continued technological revolution. In fact, the most valuable lesson of all can be gleaned from a brand that once dominated its respective market: RadioShack.

What Exactly Happened to RadioShack?

Initially founded in 1921, RadioShack was hailed as an industry leader in the tech world of the late 1970s and early 1980s with 4,300 franchises across North America. At that time, RadioShack was a beloved, one-stop-shop for all things electronic – from walkie-talkies to radios, stereos, cell phones, CD players, camcorders, and more. That is, until 2015. After decades of service, RadioShack made headlines as it underwent bankruptcy proceedings, and the brand was sold off to entities around the world. There was no denying it – RadioShack had made a fatal misstep and had failed to secure its place in the future while other tech brands surged ahead. So, what exactly went wrong?

From a product standpoint, RadioShack primarily focused its offerings on cell phones and various “gadgets” and components. While this initially worked, the retailer notably missed out on the personal computer revolution and instead chose to lean heavily into cell phones. The only problem? The sign-up process took 45+ minutes per customer and, as the cell phone market evolved, carriers began opening their own stores, which directly impacted RadioShack’s primary revenue stream. But, perhaps, the real nail in the coffin was the rise of the iPhone.

The iPhone is, quite literally, a jack of all technological trades. The individual items that once lined the shelves of RadioShack (and therefore were sold separately) were suddenly rendered obsolete by a smartphone that could offer users everything – right in the palm of their hand. Personal stereo? iPhone. AM/FM clock radio? iPhone. Calculator? iPhone. Portable music player? iPhone. Handheld camcorder? iPhone. The list goes on. Back in the 1990s, a consumer would need to spend thousands of dollars to purchase all of the individual gadgets and items that are now encapsulated within one central, easy-to-use device.

By consolidating core features of popular gadgets and streamlining service delivery via a singular, connected device, Apple had cracked the code and created a product that was not only more convenient and future-proof but also far more affordable over the long-term. It was precisely this shift that was the beginning of the end for RadioShack, and today, we witness the same trend unfolding across the hospitality technology segment.

Single Platform, Unlimited Functionality

Hoteliers are no stranger to the mention of legacy technology. From the hotel CRM to PMS, RMS, CRS, and more, hospitality professionals have spent years clinging on to cumbersome, antiquated operating platforms that lack the ability to scale alongside the continued growth and evolution of hotel properties and guest demand. As such, hoteliers frequently find themselves seeking new platforms and applications to add to their existing infrastructure to acquire the functionality their core system cannot offer. In simple terms, rather than buying the iPhone, hoteliers are still shopping at RadioShack. Not only is this a less efficient and streamlined approach to platform innovation – it’s incredibly costly and difficult to manage.

Technology platforms should not act as handcuffs, nor should they be viewed as a cost of doing business. Instead, they should empower continued growth and scalability, ease of connectivity, and enhanced revenue opportunities. From a guest data standpoint, working with various platforms that cannot integrate effectively can lead to an influx of data silos that are increasingly damaging in a data-driven market. From a cost perspective, hoteliers still relying on disparate legacy systems can expect to pay bill after bill – from vendor fees to upgrade fees, training fees, integration fees, and more. Finally, from a service perspective, working with multiple vendors and platforms means precisely that – working with multiple vendors and platforms. Managing countless vendor relationships behind the scenes can be a timely and frustrating experience, especially if those vendors are unable to “play nicely” with other applications your property uses..

Fortunately, there does exist a solution – the ‘iPhone’ of hospitality technology, if you will. Rather than subscribing to the limitations of legacy infrastructure, hoteliers can look to leverage a cloud-based microservices platform that is scalable, incredibly cost-effective, and entirely future-proof. Harnessing the power of a new architectural style, a microservices framework is a collection of services/applications that are loosely coupled, highly maintainable and testable, customizable, and independently deployable. Essentially, hoteliers can treat applications as digital “building blocks” that run independently of each other and integrate seamlessly to form a highly functional operational system. More importantly, this approach empowers horizontal scalability that – in the world of hospitality – creates the environment for growth and long-term success, rather than impeding on it.

Much like the consumers who turned their backs on RadioShack in favor of the iPhone, hoteliers switching to a microservices-based platform will benefit from reduced costs, streamlined service delivery, increased flexibility and agility, enhanced platform security, and a single point of contact. Finally, hoteliers can move away from a fragmented digital ecosystem to effectively manage their hotel from one singular, cloud-based hotel system that boasts deeper functionality and can effectively propel the hospitality industry forward. This begs the question – hoteliers, why are you still shopping at RadioShack?

Aaron Shepherd

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    About Above Property (APS)

    Above Property® is leading the charge to deliver innovative, scalable, and services-oriented platforms for the global travel industry and other related verticals. We think differently, and we are constantly innovating. Above Property Services (APS) offers the only platform that can evolve seamlessly in response to industry demands, with credit to a microservices architecture that empowers continuous development and refinement.

    Built from the ground up, the APS ecosystem empowers continuous development and refinement of your critical business processes via a unique microservice architecture. Designed for performance, flexibility, security, and stability, the future-proof framework is up and running quickly, delivering a scalable, cost-effective solution that can work with or replace your existing tools and investments. APS is a platform that adapts to you – not the other way around.

    Powering both large and small companies, we understand the industry's challenges in the past, and we have developed a platform that is suited for the future.

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