Skift Take
Oracle Hospitality doesn't fold sheets, bus tables, or stock shelves, but its software does keep hotels in order. It's taking a few years for the company to get itself in order, too.
Three years ago, business software maker Oracle acquired Micros, a hotel and restaurant technology company, for $4.6 billion net of cash.
Micros was the market leader. More hotels used Micros's software to check in and check out guests than any other company's reservation management software. For more than two decades its servers hummed under the front desks and in the back offices at tens of thousands of properties worldwide.
One of the knocks against Micros' hotel software was that it was antiquated. One hotelier called it "a DOS pig with lipstick," referring to the 1980s Microsoft disk operating system for computers.
Oracle found the integration of Micros tough sledding in a few ways. Execution of the merger did not meet the expectations of many hotel customers.
Oracle was caught off guard. As a company not used to dealing with call-center-based customer service, it suddenly had to handle help desk requests for thousands of vendors — half of whom were outside of the United States and Canada. At the time of the deal, Micros software managed payments and reservations for more than 300,000 hospitality owners worldwide.
Customers were also demanding cheaper software that is much more adaptable to today's best practices and third-party tools. Some hoteliers were on versions of Micros that were 15 or 17 years old.
It took Oracle awhile to figure out how to plot a multi-year transition of Micros customers from license-based deals to Web-based, subscription services. The older deals represented more than 90 percent of Micros's revenue at the time of the transaction.
Oracle did come up with a fix. But it took time to release product updates. For instance, it took two years to roll out a new solution suite that runs in the cloud and that replaces Micros' typical on-premises applications.
When preparing our Skift Research’s Strategic Guide to a Modern Hotel Stack one year ago, we talked with hoteliers who, speaking anonymously, complained about the sluggish pace of change.
One hotelier said, “I know that Oracle recognizes that and [they are] very open about how much investment they need to make, but it is a risk to us as a business. As we are looking to try and innovate, not being able to plug other systems into Opera easily constrains what we can do.”
Some industry analysts have been disappointed at the company's slowness in shifting its customers over to a software-as-a-service model. Yet they have said that the potential be
