"People try to categorise SITA but it's just a phenomenon," says its chairman John Watson. The fact that it exists at all is thanks to the foresight of the 11 airlines that first brought SITAto life back in February 1949. If it had not been for them, he adds, the air transport industry could not today hope to own a telecommunications network on such a global scale. But that is about as far as the nostalgia is likely to go as SITA turns 50.
For all that SITA represents a unique piece of air transport history, its business is also deeply rooted in information technology (IT) - an industry now running at full spate, where history can happen overnight. Birthday celebrations aside, SITA's ambitions are firmly fixed in the future as it prepares to help steer the airlines towards this brave new world of IT.
Watson argues that there have been two key revolutions in the past 20 years. First was the transformation of the microprocessor from a rarefied piece of business technology into a commercial system - a move which has turned the desktop computer into a retail commodity. Second, is the emergence of the internet protocol (IP) as a global communications standard.
The convergence of these technologies has already begun to change the way the world works. The days of proprietory protocols, massive mainframes and scores of dumb terminals are numbered and with them the airline legacy systems of the 1970s. In its place are the bright lights of network connectivity, with its promise of systems transparency and new links to customers, including e-commerce.
Bridging that gap, believes Watson, starts with putting the infrastructure in place on which to hang new applications. "Getting the infrastructure right is becoming a major corporate decision," he says. And that is where SITA's future ambitions lie. Today over half of its business still comes from the core telecoms services, but the plan is for the balance to shift over the next three years, with infrastructure integration starting to take the lead.
Watson swiftly dismisses any lingering doubts about SITA's continuing relevance as an industry-specific player in an IT sector dominated by some definitively non-niche technology giants. That, he argues, is to miss the point. He is happy to concede that perhaps as much as 80%of IThas moved away from specialist systems towards a commodity market, not least with the advent of the desktop PC. But while purchase prices may be falling, ownership costs are not.
"People believe that the infrastructure is becoming simpler, but the complexity is in how you link the desktops to one another...how you manage the infrastructure," he says, adding that there may be serious penalties attached to getting it wrong.
Best reckonings from the computer world are that lifetime costs for a PCmay be five or six times that of the initial equipment price. And the technology is turning over every two or three years. "Chief executives need to get an idea of what the costs of these systems are, because use is going to grow whether they like it or not, " warns Watson. Airline boards will have to wrestle with the classic issue of whether they want to take on full management this new environment in-house and he argues that many will not. SITAis positioning itself as an industry insider to help take on that task. "We're the child of the air transport industry," says Watson. "We're changing the nature of our role because that's what the airlines want."
His point was underlined in February as Lufthansa's passenger airline signed up a $215 million five-year deal which gives SITA the lead in managing its desktop requirements around the world. The carrier also handed out a two-year contract to handle its global communications network, including laying the foundations for the migration to IP.
The nature of the management contract, which involves over 6,000 PCs across 100 countries and 400 locations, plays to SITA's strengths, says Watson. As SITA is ever quick to point out, its reach is truly global, like that of the airlines that still own it, with a presence in over 220 countries - more than the United Nations. The Lufthansa contract will also draw heavily on the integration experience gained through CUTE (Common Use Terminal Equipment), the system that SITA first launched over a decade ago to allow sharing of airport check-in terminals.
Other major airlines are watching with interest. "A lot of carriers have heard what we're doing," says Watson. Internal talk is of signing up up two or three such deals a year. And it plans to offer everything from setting up servers and networks through to software distribution and even computer financing.
Watson stresses that SITA sees itself not primarily as a partner. On the Lufthansa contract it is part of a "virtual enterprise" with the airline's sister systems house and an arm of Deutsche Telecom.
SITA is also seeking out partnerships in the IT industry. In pursuit of a viable path towards IP networking, it has already signed up teaming agreements with IBM and Cisco Systems, a company born of the internet age.
It has been a long journey from the morse code and ticker tape of 50 years ago but SITA still has plenty of ambitions to travel.
Source: Airline Business
