Why buy when you can rent? That's the pitch from Trabacus Technologies, which rents enterprise-wide booking software.
Founded in India in 2012 by Frappant and Softappsit, Trabacus is planning to open a UK subsidiary in 2013.
The company is targeting small tour operators with its in-house, enterprise resource planning (ERP) reservation system. Trabacus also rents to larger companies, giving them the option to buy its software outright if they like it.
The software promises to automate every booking from the customer's first phone call or email message until the payment is processed by the accounting department.
The tool can be hosted on its external cloud or on a tour operator's own server, using Windows, Unix, Linux and many other operating systems.
Trabacus pledges a "plug-in-play" solution that lets tour operators go live within seven days, supporting multiple branches companies.
Trabacus currenly has 17 travel customers using its software in the UK, Germany, and India. It delivers the systems mostly as a cloud-based application, and the price includes public hosting on Amazon Web Services (AWS) in the UK.
The revenue model is to offer rental of software with rates inclusive of cloud hosting. It offers the option to outright purchase the software app.
During the next five years, the company's target for business in excess of $25 million a year.
It will be competing with legacy providers by offering its unique open-source app. Trabacus claims to offer broader functionality at a lower cost than legacy companies selling traditional user licences and annual support fee model.
Its team consists of two executives, Arun Kalikeri and Sunil Prabhakar, plus 15 developers and 5 support staff.
Q&A with managing director Richard Bristow:
Describe what your start-up does, what problem it solves (differently to what is already out there) and for whom?
Trabacus removes the problem of how small tour operators and online travel agents can best afford the best and most efficient booking business system – by renting the software without any capital expenditure.
Development costs for Trabacus costs much lower than traditional suppliers because of the open source (non-proprietary) platform it uses.
Renting software has been available in the market in various forms for over ten years but up until now it has still been relatively expensive. Trabacus marries the low cost of systems development with those of Cloud distribution.
OpenERP was established in 2005 but it has taken a while for travel applications to develop. The travel industry in the UK is being offered rentable ERP on an open-source platform for the first time with Trabacus.
Trabacus also lets customers customise the supplier links they need. For the European market we have added allocation controls and fully integrated email and the potential for VoIP systems links. The systems is designed to offer the customer choice and flexibility based on their own commercial requirements not forcing them to accept costly fixed links.
It also offers larger companies who want an in-house reservation system over which they have control over costs, functionality and development schedules the option to purchase the software, thus avoiding vast set up costs.
Why should people or companies use your startup?
No one else (again as far as I am aware – and I know most everyone in the market) offers full accounting ledgers, CRM, and human resource features as standard.
Trabacus stands out by offering full support and development services for our rental customers. We have lots of little touches, like the ability to schedule auto-SMS (text) messages to be sent to greet customers before their travel and on their return.
We provide security, too: Our software and servers are fully encrypted and client data is also protected. Clients no longer are responsible for backups, and server maintenance removes a whole level of potential security issues.
Enhanced levels of security can be offered for larger and more complex systems via a private or hybrid Cloud structures (at additional cost). This not only improves security it also lowers costs considerably.
We deliver consistent up-time as well. A few years ago, a tour operator using a leading software supplier's system had a major server failure and as a consequence lost a day’s booking at the height of the summer booking season. The costs of the bookings and the time and business disruption were almost catastrophic.
In contrast, our cloud systems are backed up in real time. The absolute worst case scenario is the loss of three minutes' data. The savings in staff required for support and security are considerable, if you use the cloud.
What is the strategy for raising awareness and getting customers/users?
We have established a local and European Beta site to validate the software functionality for the European market.
We will add a small number of new customers before embarking on a major advertising campaign as we see the marketplace for travel software is desperately in need of change.
How did your initial idea evolve? Were there changes/any pivots along the way? What other options have you considered for the business if the original vision fails?
The travel industry is in need of change in order to deliver two things: Improved business efficiency and lowering of IT cost. Currently, only the biggest companies can afford the best technology! We aim to change that.
The size of the Indian market for rentable is almost impossible to calculate, but like everything in the sub-continent, the demand for travel systems increases by multiples of ten, year on year! We could focus on the Indian market if Europe doesn't work out for some reason beyond our control, like further macro-economic turmoil.
Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome?
We expect the market to change with rental and purchase options to become established.
With the change purchasing methods will come a challenge from existing suppliers who will try and adapt their existing sales methods. However, this will prove difficult for them financially.
There will be other open source suppliers in the market, too.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Currently there is a lack of product and business flexibility while lower cost products do not offer the growth path or cost effectiveness that is required for a mature market.
‘In a nutshell’ our company's strategy is to offer more functionality at a considerably lower cost. Bring on the revolution!!!
The concept of rentable ERP has been around since the mid-1990s, when IBM was offering versions of it to companies.
Yet open-source solutions that are hosted in the cloud are only now coming to small travel operators.
Trabacus fills a much needed gap in the marketplace, assuming that its product delivers on its promises.
It's vital to reduce the number of application service functions, like billing, human resources, or inventory management, to streamline operations.
European travel software sales are appoximately 400 million pounds per annum. The market for systems rental is potentially all of that.
The choice of renting or buying for in house development is a new concept that the European market cannot afford to ignore as it offer business greatly improved agility and efficiency plus huge cost savings.
Is it hubris for Trabacus to think it can take the lessons it has learned in the Indian market and succeed by expanding to the European market? (Both of the companies behind Trabacus are based in Bangalore and its principal IT development centre is in India, too.)
Trabacus doesn't think so. Trabacus Technologies Pvt Ltd is a jointly owned company, and its co-parent, Travel Systems Associates, has many years’ experience in IT consultancy and sales in Europe.
We hope so, too, for its sake.
NB:TLabs Showcase is part of the wider TLabs project from Tnooz.