How this 21st century disruption will change casinos forever
One of the most significant and massively transformative technologies to shape the 20th century was the introduction of the mass-produced automobile. Henry Ford’s Model T freed everyday people from the limitations of their geography on a scale never known before. The automobile created immense mobility. It also changed the very nature of commerce, as producers and manufacturers could more efficiently and economically transport their goods to markets across vast distances. It is fair to say that the automobile was THE disruptive technology of the early 20th century.
In this century, an equally disruptive change is upon us, a change that will reshape the very fabric of our economy. Cloud computing is altering the way we live and work at an unimaginable speed. It has triggered a sea of change in the way that companies manage and deliver resources and technology to employees and customers. It has radically changed business models and cost structures, while also creating new opportunities. We are at the dawn of a new era – and casinos have an opportunity to play center stage in this new world order.
Many casino applications are candidates for a cloud solution
Cloud computing is computing delivered over the Internet. Rather than using a desktop or a laptop computer with locally installed software or software connected to a corporate server, cloud computing enables users to access similar applications through the Internet. These applications are often referred to as SaaS or Software as a Service. This category of cloud applications delivers the software as an on-demand service and is licensed as a monthly or yearly subscription.
Cloud computing is all around us. Google Apps, WebEx, and Salesforce.com are all examples of software that is delivered in some form over the Internet as part of a subscription model.
SaaS software is popular with corporate IT departments because it reduces cost and simplifies deployment. It is also popular with IT because it can help offload non-mission critical applications while holding costs considerably lower than its on-premise alternatives.
So, what does this new world order look like for casinos?
Speed matters. With SaaS software, the problems that casinos are trying to solve with software are delivered faster. Unlike on-premise software, SaaS software is set up and deployed by the vendor rather than the customer. If the software needs to be upgraded or customized, the vendor can do this work much faster by relying on webdelivered updates.
SaaS-based services are ideal for casinos that want to grow into new product offerings over time. If a property’s needs change, it’s much easier to bring new services online. Likewise, if a casino wants to turn off services that it is no longer using, this can be done with relative ease. This type of agility can give a casino a significant advantage over competitors that are struggling with monolithic, on-premise software.
SaaS solutions don’t require the casino to have an IT staff to manage and maintain the software. The SaaS vendor takes care of all of this – software upgrades, security patches, backup/recovery, etc. This means that casinos don’t need to invest time and energy in non-core activities, and can instead focus on the business.
Buying on-premise software requires a fairly significant capital expenditure. In addition to the software license, commonly there are yearly maintenance and support costs (usually 20-25% of the license cost). Typically, an investment in new infrastructure software and hardware to support the on-premise deployment would need to be considered. There will also be initial setup services required to customize the software for the environment. And financially, a property would be required to invest in expensive IT resources to manage and maintain the solution. Over time, these costs can amount to hundreds of thousands of dollars year over year for a single solution.
SaaS software cuts out these costs. Using “pay-as-you-go” subscription pricing, a casino uses only those services that are required. If a property is unsatisfied with the service, it can just end the subscription.
Deploying any type of on-premise software can be risky and time-intensive. With SaaS software, the solution is delivered to a customer without changes to internal IT. The project delivers value in the solution much faster and in a more predictable way.
Challenges and Opportunities for Casinos
Security and data sovereignty are generally the biggest concerns that most operators have when it comes to embracing cloud solutions. And while for certain types of activities these concerns may be warranted, for many applications, including core business applications, SaaS solutions can be more appropriate and cost-effective.
Some points to consider:
- SaaS solutions can be configured in a way that does not use sensitive, personally identifiable information.
- SaaS solutions use sophisticated encryption technologies to secure the transmission and storage of data.
- Cloud providers may provide better security than a casino operator, especially small and mid-sized properties that have small IT departments and resources.
Many casino applications are candidates for a cloud solution. For example, hospitality management, host CRM, and gaming analytics solutions can all be delivered securely over the cloud today. And many casinos have already made significant cloud investments in these areas.
Harrah’s Entertainment (now Caesars) was one of the first commercial casinos to embrace the cloud back in 2008 when they announced a transfer of their internal applications to Salesforce.com. More recently, Live! Casino & Hotel Maryland announced that it was deploying Infor’s cloud-based Hospitality Management solution. Robert Norton, President of Live! Casino & Hotel, stated, “Infor’s HMS will help us provide the ultimate guest experience and improve our overall operations by shifting to the cloud.”
Henry Ford once famously quipped, “If I had asked my customers what they wanted, they would have said a faster horse.” For casinos, that “faster horse” is already here.