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The Digital Revolution

Speaker Transcripts

Taking the Travel Intranet Route
Dave Robin, Imminus

My colleague John Phythian who is the director of our electronic commerce division couldn't be here, therefore I got the job.

I tend to deal mostly these days with electronic commerce in general or networks in general so hopefully we can bring it around at the end of this presentation back specifically into the travel industry. We will make some references outside of that, particularly in the financial sector which is another area of business that we actually deal in. So briefly, to bring you up to date as to where we all are, my name is Dave Robin, I work for General Telecom, not for Imminus, which is part of General Telecom these days. We started life as Midland Network Services and I'm sure a lot of you in this room know us as Midland Network Services or Fastrak or Fast Link or Travinet or various other names. Midland Network Services, as it was pointed out, actually became Imminus and we spent a lot of money on marketing. Now though we are part of General Telecom and General Telecom is again part of the General Cable group. General Cable came along about 1½ years ago, looked at what we were doing within the Imminus environment, specifically with the travel industry, and we also have another sector within Imminus dealing with finance and banking. They took a look at us as a cable operator, as a Telco, saw that we had a UK national licence for delivery of telephony services, looked at what we're doing in our valued added services division which is applying our services to our managed networks and selling as a banded service not as a bandwidth supplier which is traditionally the Telco side of things. So they took us on board, revamped the different parts of General Cable at the time which was Yorkshire Cable Corporation Limited and the Cable Corporation, Slough, Windor area and made it into General Telecom. General Telecom is one of the divisions. We have the cable groups which is general networks and we have the CCTV groups which are the General Cable Communications Group. Yet again, on 1 September we changed our name and we are now part of TeleWest and we don't know what's happening there yet because it hasn't been long enough. As General Cable, we are the business telecom service division. Our position in life is to sell business to business communications products and services. We're not there to sell bandwidth. We're there to offer services to end users such as, for example, Rob's Lonely Planet who actually get their information out to people like yourselves. So that's where we're sitting and gives you an idea of who we are.

Let's look at electronic commerce now, this is what it's really all about. In general electronic commerce, not just the travel industry. We recently took a survey of 120 professionals in 94 financial institutions and it gave us an interesting highlight as to what is actually going on out there. We noticed that most major organisations that we targeted had some e-commerce activity, but the amount of activity actually varies considerably and they are not quite sure what they want to do with it. It's obvious that organisations with a serious focus on customer retention and business development are giving high priority to this electronic trade in commerce. That's very much the case with ourselves because, as has been mentioned, we are one of really only two suppliers at the moment of Videotex services to the travel industry. We have a lot of customers. A lot of you guys are our customers. We want to retain you, we want to retain you as you move forward from Videotex to the new platforms and help you get the Videotex service and platforms. Customer retention. It's also clear that many High Street financial organisations are actually formulating five and ten year plans for electronic commerce. They've seen that they've got to set out and change the way they trade. An example of this is the Co-operative Bank. I don't know whether you are aware of the fact that the Co-operative Bank has got a very aggressive approach to electronic banking. The launch of their secure Internet site earlier this year gives the ability to check your financial statements on-line using an SMS message on your Vodaphone and before that they were the first bank to go on line with interactive teletext services on Sky TV and I'll go on to look at how they did that as we go through the presentation.

It was apparent though that only the majors had any comprehension about e-commerce. The problem we found was that smaller companies weren't really prepared to have the decision made for them, they only wanted to do it themselves. They want somebody to say you've got to do it this way. In fact, many small to medium enterprises aren't able to grasp the concept that size doesn't matter. Size doesn't matter when the e-commerce strategy is applied. It doesn't matter how big you are. The Lonely Planet guys have got a book, they weren't dragged into what they do, they decided to do it themselves. They've gone out, they've got on the Web and they will see some benefits from doing that - from being first. We've also looked at some of the developments around places, especially in the States. Some stats and figures now. We did look at the American market place as well to see what's going on. For example, a discount brokerage house in the States did half of its trade on line in the first three months of this year, that's 1998, compared to one third of its old business on-line during the whole of last year. So that's seen a change towards electronic commerce, trading electronically. In the travel industry, the boom in electronic commerce is obvious. In 1996, independent travel agents in the States handled 80% of US airline reservations. Today, ie earlier this year, that share is down to 52% as airlines deal direct with travellers off the Internet. For my holidays this year, I bought my flights from a High Street agent but I booked all the hotels on the Internet. It's very simple and pretty easy to do these days and it will change and move that way.

We are all fairly familiar with what we have to do to set these things up. People like ourselves at General Cable and General Telecom have to deliver these services to you. It's all very well passing on megabytes of information backwards and forwards across the pond, but how do you actually do it? Who do you pay to do it? Who has the infrastructure to do it? Basically, that's us. We have a core network based on technology such as Asymmetric transfer mode, frame relay, the IP based services today, high band width pipes around the country based on the Telewest network and traditionally the X25 network. Don't forget the X25. It might be a legacy but it's how most of your trading is done today across the fastrack videotex networks. You musn't forget these legacy systems. Secondly, then, forget about the core because quite a lot of people provide bandwidth and let's look at where we move next. We've got to manage services. That's what we sell, that's what we provide, a managed service at the end of the day. We hopefully tell you if something has gone wrong as opposed to you telling us that something's gone wrong. Some of you guys in the audience might disagree with that but that's what we try and do. Our managed route services and fast access services and the traditional dial-in Fastrack videotex service. They have all been around for a while, they are all managed services and they all enable you, travel agents and tour operators, to do your business. You may not realise it but they do.

What we are seeing now are people like ourselves needing to add more to this managed service than just providing connectivity. We have to be providing you with the ability to supply extra services. We have recently moved into messaging systems and managed Internet access within our group, both for the travel sector and the non-travel sector. And electronic funds transfer at the point of sale is becoming more and more the way that that's needed, especially if you are going to provide a true e-commerce solution. If you can't pay for it, you're not going to send it. Credit card transactions need to be checked. These services need to be made available to the people who build these services on the Internet.

That's what we need to build on to get an effective e-commerce solution. As I said to you earlier, we're not just focusing on the travel industry, we're focusing on travel and financial sectors as general telecom. Imminus only focuses on the travel sector so it's with this e-commerce level in those two sectors plus a bit further down, the managed Internet and messaging EFTPOS is where we're trying to focus on the Intranet. An Intranet is effectively a closed network to a closed group of people which can then be managed and supplied on a basis where service levels can be associated to it. The Internet is fine. It's open, it's not managed, you can do what you want with it but sometimes it goes dead slow. The thing about Intranets is that you can actually now supply a managed service with service levels associated with it that allow you to trade correctly across that network without any danger of slowing down or not getting the information from point A to point B. It makes a more reliable open service for people to use. Another phrase that tends to be used is Extranet. I don't agree with that particular phrase but Extranet tends to imply value added closed Intranets within a particular closed community. I think that the Intranets that we deal with, in particular the business sector, are what people call Extranets.

So why should you believe a word I'm saying. This is the point. A lot of people tell you it's great, super, we can all do it. Why in General Telecom do we stand up here and say this is where we think it's going. Just to blow our trumpet a little bit here, three examples of why we can say we know what we're doing. We had the first TV banking system that was ever made available on interactive TV. We supply the Co-operative Bank service to Sky and it's actually one of their most popular services at the moment. You can actually go on line, check your balance, check your statements, etc all on Sky TV via interactive teletext. It's been around since 1996. It was the first toe in the water for both Sky TV and for interactive television before they went digital and ourselves for the delivery of systems and services other than our traditional managed networks. We also had the first integrated TV and Internet system which again was in 1996. Again, it was with the Co-op Bank. The same computer system, the same IBM main frame that sits up in Skelmersdale and supplies the information for the interactive teletext, supplies the same information to the Co-op Banks closed Web site. Finally, the ability to be able to stand with your Vodaphone in the shop, check your funds, see if you can buy what you've got in front of you.

This is our first foray into this partcular environment but it is a very good example of how this financial sector is moving that way. High Street banks are saying, "We want to move away from the High Street. We still want a presence in the High Street. We wish to trade outside of the High Street as well," and they've got a very, very aggressive approach as to how they are going to take that forward over the next five to ten years.

The concept of our e-commerce facility is delivery of services through multiple channels of distribution. You've got a service like the Co-op Bank and want to distribute it through multiple channels. It's data coming from one source but going to lots of different end points. It can be taken other ways as well. We also do the same thing for What Car? magazine. We supply What Car? on line, on the Internet, and we also supply What Car? on line on interactive teletext for Sky TV. This idea of taking information and delivering it to any end point from a single start point or from multiple start points to a single end point is what it's all about. As far as we're concerned, as there's a communications environment supplier. We want to be able to deliver our services or your services and your content to the Internet, web based TV services. All the hype about digital TV is great but I actually believe that good old analogue TV with a box that looks likes a PC plugged into it is going to takeover within the next 18 months before real digital TV comes along. Kiosk systems are going to be more evident. Again we have a pilot running at the moment with a major chain whereby we are delivering our Intranet, our banking services, through a touch screen kiosk system to their central site, there's a cataloguing system there. You can actually pay for things with your credit card and get a receipt from the kiosk. So if we start to look back into what's been around before, now it's becoming more viable to use it. We see lots of kiosk style services.

Now turning to digital TV. Although I'm not a digital TV supplier there is a part of the parent company that I don't work for that will be a digital communications supplier by next year. I actually believe that digital TV will be the prime channel for this release. At the moment it's not capable of taking the web browser, it's not capable of taking the catalogues. But there's ways of doing this. Intranet technology associated with digital television will be where it's going. You will have a television set as the front row in the front room. We see it going that way as well. So we need to be ready for when that happens. It isn't going to work with good old teletext, long live teletext. I've been told for the last 10 years since I joined the company, Teletext is going to die next year, we're going to take it away. We are actually increasing our X25 network capacity because Teletext hasn't gone away and there's more and more uses coming on to it. It will eventually go away but only when there is a valid viable alternative. Why don't tour operators want to change their teletext front ends? At the moment they don't want to spend many millions changing their front ends just because you want something different at the far end. It's a viable sales tool as it stands at the moment. Therefore it will stay, there's no reason to change it. What we have to do is put in place the means for changing it and then ask people to judge if they want it.

I would like to introduce the concept of what we're calling e-commerce. This is effectively a Web site, a fairly complex Web site, which takes information from a number of sources and re-presents it back to a number of different sources. It's the bit in the middle that changes the data format, that changes the information appearance, so that it can be displayed in the style of service you want. I have already given you an example in the Co-op Bank and What Car? magazine. We have, for example, P&O Ferries on the interactive teletext service as well. The ability to change things around and move things in and out of this hub to provide the definition and display wanted at the other end is important and the key to it. I don't own the information flowing through this, you guys out there own the information flowing through. I merely have the engine that allows the information to go from one site to another site in the form that's required. Also there's a business model associated with it. I think Rob mentioned in his session about the fulfilment of the sale. Our electronic commerce hub, the commerce hub in the middle is there to enable the buisness model. The business model is that you have got a service to sell, we need some form of payment, we need some form of fulfilment and at the end is a customer. What we're interested in and what we're actually enabling with our Intranet style of operation is the fulfilment of the sales bit. The e-commerce hub is able to take, for example, the credit card organisation of payments and validate the sale for you. We are giving the tools to the end-user of application writers to actually be able to do what we have all been talking about, which is, e-commerce. Commercially viable applications on the networks.

We can't do it alone and at the end of the day we are a network supplier, a network provider. Our valued added services team or e-commerce group is there to help people get to this position. We do need partnerships and strategic partnerships are important to us in order for us to get there. In order to develop the profile to start to show what people can do in the travel industry, we are in partnership with a couple of companies to make the first demonstration in Intranet. A device which was shown last year sometime which is to show people how they could go forward. We won't say this is how you have to do it, we're saying this is what we can now do with the communications protocols, with the openness of an IP network environment, this is what you can now do. We stick ourselves with people like Microsoft, we're Microsoft Solutions providers. We are a systems integrator for some Internet services. We have all these partnerships associated with us that allow us to help you get to this position. We've done it for a number of names already, you can help yourselves.

Just to finish then, I want to go through and show you the sort of things that have been seen before. We never developed this to actually become "the" tool that you had to use. We developed this to show you how people could develop it if they come together within partnerships and that's what is starting to happen now. We have changed the approach. Pictures are different. It's a bit like the teletext we saw earlier. We can now display different things, we're using HTML, we're using an IP based network. We're able to take information from videotex machines, from non-videotex machines from NT servers, from wherever they come from. It allows us to display them, in this instance in one format, which is in Internet Explorer using HTML. This actual demonstration was set up to do bookings of ski holidays. So once you get through the front door, it now looks totally different. Everything is now in the familiar tabular format that you see on the Internet. You go in, you give the information you want, you don't go trawling around, you go for the information at once. Having got the information and given it what you need, you may get back a list of potential services. I did a session about two years ago and I could hear an argument across the table that the operators don't want to lose their branding, the retailers want a list of what holidays are best. That's what I got out of it. What we're trying to show here is that you don't have to lose your branding but at the same time you can enlist. We're still talking about the retailer and the operator, we're not talking about the home user. Obviously you can extend this outside the closed Intranet into the Internet itself. We can now offer other services and sites. We can offer from the central server site the brochure picture, the video of the hotel and the pages out of the book that tell you what it's like out there. You can now actually go ahead and do this, based across these new HTML based services. Somebody said to me the other day: "That's great Dave, that's super but my videotex computer doesn't send pictures like that." It doesn't, that's right. So, if I'm going to take a retail agent and give them the ability to move away from the X25 services and ancient fast track services to the new services, we have to have marketing plans that allow you to migrate. If I want to migrate you to a network computer or PC with a piece of software in it that allows you see pictures like this, I have also still got to allow you to see pictures like that. This is where it all comes down to being able to take translational pictures from legacy systems and place them on modern technology. It's very important because not all operators are going to go off videotex. Ultimately somewhere down the line there's going to be very few on there but, in the meantime, there are still going to be a number of people who do not wish to go this route because it is not commercially viable for them and who am I to force them to go that way. I'm merely trying to put a platform there to retain my travel industry customers. Therefore I need to supply this end to end service that allows them to basically carry on trading and still use my network instead of our competitors' networks.

In conclusion then, we've seen in terms of electronic commerce that you really need to get in shape. The fact that you are sitting here today I believe means that you are trying to get in shape. You have got to have five to ten year plans to understand where you are going to go. You've got to start looking today as to what you want to do tomorrow and you will change. We believe that you can develop strategic partnerships and I'm sure there's enough people who have been standing up here today who have given you enough information to enable you to start studying where you may take some of those partnerships and most of all I think you need to start now. We've been talking to a number of operators and retailers as to how we can move forward with them in strategic partnerships to deliver this sort of technology. We need to create a community because if the community isn't there to use it, you are not going to provide an e-commerce solution. Like in the old days of EDI. If you didn't have an EDI it didn't work. You have got to make it easy and I'm sure you can see from what I've shown you that it's not as difficult as you thought. The tools have been made for you over the last two years and you are ready to start taking these tools to market. We've given you the ability to use multiple distribution channels, especially from the operator point of view.

Thank you for listening to me.

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