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Amadeus opens systems to kick-start innovation-driven ecosystem
By opening its systems, travel software company Amadeus is hoping to foster ecosystem-wide innovation in the travel industry
Amadeus is opening its systems up to third parties through its application programming interfaces (APIs) as part of a “distributed innovation” strategy that also includes partnering with or investing in startups.
With just under half of the travel software company’s 19,000-strong global workforce concentrated on research and development (R&D) projects, Amadeus is focused on keeping up with a world of “accelerating changes” in which technological developments such as quantum computing and space flight are just around the corner.
The company therefore wants to expand its capacity for innovation by tapping into talent from outside the company so that it can offer its enterprise customers in the travel industry – which operate with small margins and high competition – access to the latest technologies.
As such, the Amadeus for Developers portal gives a range of third parties access to the firm’s API endpoints, allowing them to build applications on top of the company’s cloud-based computing platform that its clients use to run and manage their applications.
The open portal is split into two sections, Self-Service APIs and Enterprise APIs, which focus on different segments of the ecosystem.
“We are very much aware that the next big idea in travel is likely to come from outside of Amadeus, so part of our innovation activity is to look outward and facilitate startups and other actors to create these ideas,” said Marion Mesnage, head of research, innovation and ventures at Amadeus.
“The Enterprise APIs are for our traditional customers who’ve been using our web services for a long time – airlines, hotels, and travel agencies, for example – while the Self-Service section targets a new segment of small independent developers and startups.”
While it could be argued these developers and startups represent a competitive threat to Amadeus, the firm’s senior vice-president of airline R&D, Christophe Bousquet, said that the firm’s value to its enterprise customers will only be enriched by the collaboration and variety offered by the ecosystem approach.
“You potentially have loads more people coming up with bright ideas. If you look at a company like Salesforce, it’s richness very much comes from the ecosystem – it has heaps of people just doing ecosystem management because they know that’s what brings their value,” he said.
Relationship building with startups and developers
The portal for developers has been open since November 2018, and is now being used by several thousand users. As customers of the self-service APIs grow, the plan is to move them over to the enterprise section.
“It’s also a way for us to channel these small and growing customers into our traditional customer base as and when they grow,” said Mesnage. “We expect a lot of new ideas and concepts will come from this segment.”
However, publishing well-structured APIs for open use is just one of the ways Amadeus is attempting to build a collaborative ecosystem.
Five years ago, the firm launched Amadeus Ventures, a funding program for making investments in early stage startups relevant for the travel industry.
Since then. the programme has invested in 14 startups, including Barcelona-based geolocation startup Avuxi, which partnered with Amadeus to create the Points of Interest API – the first third-party API to be published on the developer’s platform.
The API allows developers to access a trove of previously unavailable data on neighbourhoods, tourist attractions and restaurants so that they can build their own products and solutions with it.
However, Amadeus is highly selective about which startups to invest in, having screened more than 2,500 since the programme began.
“Investment is only one way we partner and connect with startups,” said Mesnage. “We also have a programme called Explore where we have a portfolio of around 30 startups that we select because we feel they bring something new or unique based on the screening.”
These partnerships do not involve investment, but allow Amadeus to jointly explore new technological solutions to travel problems in collaboration with others.
“It is very important for us is to jointly explore some use cases and collaborate with the startups,” said Suzanna Chiu, head of Amadeus Ventures’ corporate strategy.
“It can take the form of solution synergies where we work together, and they can build on top of our technology, or we can introduce them to our customers.”
In terms of securing investment, startups need to be at an early stage, have a minimum viable product that is scalable in a global context, and be team-orientated.
“The team is the most important thing in a startup. You can have an excellent idea, but if you can’t execute it then it remains an idea – so the team is always central to our startup investments,” said Chiu.
According to Amadeus spokespeople, the company is on track to spend more than €1bn on R&D in 2019, and plans to announce further startup investments before the end of the year.
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