019 | Technology Innovation, Big Data Analytics and Cyber Security with Fortune 500 CIO Les Ottolenghi

Les brings 30+ years of experience as a Fortune 200 IT executive, an entrepreneur, and a creator of several of the travel and entertainment industries’ most game-changing technologies. He’s been lauded by top executives at many of the world’s most respected technology companies including HP, Microsoft, Google, Dell, and Cisco as the best CIO they have ever seen and he’s earned the distinction of a top 50 CIO by CIO Magazine.

LL19-Les_OttolenghiAfter earning his MBA in Internet, Information Technology Strategy from Emory University’s Goizueta Business School, Les joined Holiday Inn Worldwide as their Director of Emerging Technologies where he planned, developed and implemented the hotel industry’s first web-based, Internet travel reservation system for the company in 1994. Les then joined Carlson Wagonlit Travel in 1996 as their Chief Technology Officer where he built the industry’s first Internet-based system for the travel industry. In 1999, Les Co-Founded AgentWare where he designed and developed the first and most comprehensive Meta-Search Engine for the travel industry, and he then licensed it to Kayak.

Over the next 10 years, Les founded and grew two more tech companies – INTENT MediaWorks, a file-sharing content Management & Distribution platform in the entertainment industry, and PLAT4M, where he built highly scalable SaaS applications for the Web 2.0, Media and Travel Industries.

Most recently, in 2013, Les returned to the corporate world as Global CIO & Chief Innovation Officer for the Las Vegas Sands.

Resources & Links

Les Ottolenghi

Hit list (application)

Kayak Co-Founder Steve Hafner

Netscape Co-Founder Marc Andreessen

Interviews referenced in this episode

[spp-transcript]

I just interviewed Mike Leven, and during our conversation, he specifically named you as the person with the vision and the skills to build the industry’s first web-based, Internet travel reservation system for Holiday Inn Worldwide. After hearing an industry icon like Mike Leven talk so highly of you, I just had to have you on the show.

The context for what Mike was referring to was is going back before the Internet existed and thinking forward as to what is going to be the best approach for a business that is online. And specifically, a hospitality business – a hotel company who is trying to achieve greater scale – that is more reservations, more customers, etc., but maintain cost, and then position themselves in a way that leaves them strategically ahead of their competitors. And so the thinking that went back into the idea for going online before anybody else did and putting the first travel reservation system, much less hospitality reservation system online, was just that. What kind of advantage can be gained, how much more money could be made, and what cost could be saved.

I got online in 1996 and, as I understand it, you had launched this for Holiday Inn back in 1994?

Yes, so this was 1994. This is literally the first days of the Internet, and actually, the thinking was prior to the commercial opportunity of the Internet. So, when we did this, or when I guess I did this, there was one other person in the company who understood what the Internet was. We actually had to approach what was Netscape at that time, and I approached Marc Andreessen and became the fourth customer of Netscape and Marc Andreessen and actually became friends with him, flew him out to Atlanta, where we were headquartered with Holiday Inn, and he physically sat there with me and we installed the server software that became the basis of the first reservation platform that would attach itself to the Internet. So, when you say 1996, that’s when I think most people got involved with the Internet in some form or fashion as a consumer. But, as a business, we approached in June of 1994 and went online later that year, approximately October. But, it was very early days, it was considered to be something that, as most people didn’t understand, would be new science. But ultimately, they realized it was commercially the wave of the future, so it was this whole transition into a new way of doing business with the consumer.

I think at that time, people didn’t realize the commercial implications for a business to do that. So, to see that kind of a vision coming out of you and for that company, and be able to see how it could help the hotel industry in 3-5 years when there was no one is doing that kind of thing, is just mind boggling for me.

Well, you know, it’s been rewarding. It’s one of those experiences that you look back on and, not only do you smile about and think ‘Hey, we did something cool. We did something important. We did something that has become really big.’ We still get a lot of credit, myself and Mike, and the executive team that support this, in the present. I remember running into the CEO for Holiday Inn just a few years ago. I had never met him, and he said to me, ‘Oh, you’re that guy. You’re the guy that started that for the company. You know, we have made over a billion dollars with that, and you guys spent around $100,000 to put it in, and we made a billion dollars. And, when you think about the enormity of that type of return on an investment – that is mind boggling to me. But, it became the largest single change in business for Holiday Inn at that time. And, then according to I would say present executives, they probably attribute it to the biggest shift in their approach to the market, and to the way that they market and to the way they align themselves with their customers, has been taking things online. And literally it’s just looking at what is a technology opportunity, but then assessing what is the consumer going to do with it, how is the consumer going to use this, and how will they benefit? And it’s putting those two things together, which is sort of the ingredient for success behind something like that.

Why don’t we start out with you sharing a little bit about your background so our listeners can get to know you?

My background has always been business and technology. From my earliest years of thinking about business or doing business, even as a kid, it’s always been around something technical. And then my career as an executive, as an innovator, and even as an entrepreneur in my own businesses, it has been since the early 90’s in thinking about network technologies. So, after coming out of graduate school and starting with Holiday Inn, and my very first project at Holiday Inn in those first months was to put them online, I moved from Holiday Inn to the role of CIO for Carlson Travel Companies, Carlson Wagonlit, coming in on the leisure side of that business and establishing their online presence as well as their business to business systems in an Internet platform.

So, in 1996, I joined Carlson and created the first Web-based, or Internet-based reservation system for travel agents, and that allowed Carlson to stay in the game and scale the business. And, Marilyn Nelson at the time was the CEO, had wanted me to make that kind of change, be that kind of innovator. And, much like Mike, had the vision to give people with a certain new creative idea latitude to grow that idea and benefit the business. And, much to her credit, she supported all of those efforts, along with Mike Batt who was the President of that division. And, between the three of us, came up with a whole new way to reengage or re-intermediate the travel agent.

Subsequent to Carlson, I started a company called AgentWare, and AgentWare was a travel search engine for travel agents and it still exists today. It pulls together data across all the Web, pulls it into this meta search engine, and with that meta search engine, you can scan all the different Web fares. That was licensed to Kayak and became the core engine of Kayak so Kayak was built on this application, this tool that I built with AgentWare. Actually, I knew one of the founders Steve Hafner because he had been at Orbitz and he had dealt with us when we were pulling fares from Orbitz, and he actually said to me one day, he said, ‘Why don’t you start a consumer side of this?’ I said, ‘I think our Board is heading in one direction so we’re not ready for that.’ Two months later, he had started Kayak. So, much to his credit, he had the wisdom to take it further and sell it for $1.7 billion, so very smart.

Subsequent to AgentWare which I had sold, I started an online cloud content management system called INTENT MediaWorks and that content management system for music was the ability to distribute independent music to the likes of iTunes and Warner Music and other music labels and businesses who wanted to be online with their music stores which has now become commonplace. Even Apple now has a streaming version of the same thing.

Sold that company in 2007 and started PLAT4M, and PLAT4M was a company that created what is now social search, or social data analytics. And, then was hired by the Las Vegas Sands Corporation where, today, I’m the Global CIO. And, as we speak about these things, I just want everyone to know in the audience that the opinions I express are my own, they’re not those of the Sands or any other company or individual.

[spp-tweet tweet=”‘My track record has really moved from one innovative project and idea to the next.’ ~Les Ottolenghi”]

My track record has really moved from one innovative project and idea to the next, and that includes working within organizations as an Executive or Chief Innovation Officer, and then as a CIO or an entrepreneur. So, working again inside organizations, outside organizations, and my role at Sands is as the Global CIO and Chief Innovation Officer.

Your career is kind of peppered between working for the corporate environment and then doing your own start-up environment as an entrepreneur. So you did that for, it looks like almost 15 years that you were the entrepreneur building solutions. Why did you make the leap back to Sands?

Well, Sands had Mike Leven as their President and COO, and he just retired at the end of 2014, but the Sands is an iconic company with an iconic leader who is an entrepreneur, and so the culture is very entrepreneurial oriented. And, as a result, entrepreneurship is reward, is recognized, is appreciated. And, as such, the job was an opportunity to exercise again a vision of the future, and how a business could capitalize that. And, capitalizing upon it on a global stage. Meaning, the opportunity to capture new ideas, new ways of doing business, new ways of looking at the customer, and servicing that customer’s needs with technology as the leverage point. And I think most importantly, just a recognition that technology is the fundamental of driving new economic value in any business. And so, in that type of environment, it made a very easy decision to go to work for the Sands.

Where do you see technology going for hotels in the future?

I think the technology in hotels is very exciting. This is an interesting inflection point, if not a critical juncture. As an inflection point, it all has to do with how intelligent the customer is, and the device that makes them smarter. And that is, they’re carrying around their own phone, they’re now starting to bring wearables into the hotel environment, and they’re changing then how they want the experience to unfold. In fact, they’re selecting how they want to describe their own experience, or define their own experience, and they’re doing that literally by using these devices to make selection of services. And so, the hotel is at the point now where it must provide channels of communication that allow that customer, or that hotel guest, to then define what their experience is going to look like. And it is true throughout the entire journey of that customer in their relationship with the hotel. So, for example, if booking online, there should be a way, if it’s a direct booking with the hotel, for that guest to receive messages as soon as they arrive on premise. That is, the moment they break the physical barrier of the door, or they’re in close proximity to the hotel, they should be messaged about all of the services awaiting them. Such as the ability to bypass the front desk, and then when exactly their room is ready, they should be messaged about where their room is, and when it’s ready, and be able to check in with a mobile device.

Now, a number of hotels are already going in this direction, but the extension of this experience certainly needs to go further, such as the configuration of the room. It should be set to preferences that are already defined inside of a customer record, or in the reservation itself, or as part of a loyalty program. So that the customer feels comfortable in their environment and knows exactly what they’re getting before they get there, so they can go on to do the things that are more important to them; the things that they’re going to find are more interesting, fun, or part of their business, if they’re on a business trip. And, it’s integrating those core services at the beginning of the journey with everything else that accompanies that – food and beverage, entertainment, meeting and convention, third-party services, and of course, the ability to interact with other guests that they might want to interact with if they’re on a business trip for the meeting, or with their own family members or third-parties that they’re trying to meet up with, and say a great vacation that they gone to, or a resort, or on vacation; something that they’ve wanted to do. As opposed to going around and colleting a bunch of brochures, having to go to a bunch of different websites, download everything, try to put it in a single calendar, and basically spend all this time trying to manipulate information.

If that is flattened out, streamlined, and connected back directly to the customer, which the systems exist to do that today, by the way, then the new experience for the customer is much different than the old experience and that is what wins. And, this is particularly true, by the way, with Millennials. If you look at Millennials and what they want, they would like to have information pushed to them; they want to get an alert as to opportunities to do something, and this extends, by the way, back to the beginning of the stay. There are programs and applications like Hit List – I think that is one of the sort of forefront applications for particularly Millennials that is coming along now. And, I believe it is Gillian Morris who started that company, and it’s http://hitlistapp.com. I think you’re going to see more and more of those types of applications and services being promoted in a way that then allows a hotel or hospitality provider to interact in a favorable way with the customer. So, that’s one of those apps that I would say for your listeners, go try it out. It’s at http://hitlistapp.com.

I’ve heard of people using the Apple iWatch to access their room, and bring-your-own media. But a lot of these things can be a major expenditure for the property.

I think that’s one of those challenges – that’s where we’re at a juncture. For the in-room experience, for instance, the juncture is – what do I do with my infrastructure in the hotel? What do I do with the infrastructure throughout the actual physical plant of the building? And the change that should be focused upon should be – the priority is not maintaining that physical structure internally in your physical plant. Everybody talks about “the cloud,” and when you hear the word “cloud,” they’re usually referring to applications in the cloud. Well, actually, your infrastructure should be in the cloud. You really shouldn’t be thinking about putting lots of new servers and everything else inside of your environment. You should be thinking about, if you’re a hotelier or hospitality company, connecting your pipe to actually a virtualized environment; a virtualized set of servers and infrastructure that lives in the cloud in a secure environment. That is, in secure containers so that other people can’t get into it; bad guys can’t try and knock it down. And from there, connect back out further to additional services, because once you do that, the refresh costs just plummet, and you’re always contemporary. And that migration to the cloud shouldn’t be just your application like your property management system, or for that matter, it shouldn’t be just your entertainment system, because your customer will come to your room and want to do one or two screens, but they are going to bring their own content; they are going to bring their own media. And so the days of in-room entertainment, as we’ve known them, are either limited or disappearing rapidly.

[spp-tweet tweet=”‘Your infrastructure should be in the cloud.’ ~Les Ottolenghi”]

And, it is servicing that customer with these new contemporary services so they can feel connected to the world that they are normally connect to that is the key ingredient in winning and keeping their loyalty. So, if you think about it, you don’t have to keep refreshing your infrastructure, and your in-room entertainment and your in-room technologies, you have to refresh it once – move it up with the infrastructure and applications into the cloud, and then those, as a third-party provides those services, are always refreshed, always contemporary, always new. Very similar to Google. Nobody worries about upgrading their Google. You just go to Google.com – there it is. They got some new stuff for you to play with. Whether it’s applications, services, maps, whatever it is, hotel companies have to operate in the same exact way. You just show up to the hotel and there are all these new services everything you come there and they’re cool to explore and figure out. They could be maps, they could be entertainment, they could be opportunities for meeting new people. It could be new services. So, it’s a whole new way of changing the experience for the consumer, off prem and on prem.

What kinds of things can hoteliers do today so 6, 12 or 18 months down the road, they’re not obsolete?

I think you’re hitting it exactly. So, they have to look at their wireless network, and then they need to look at their physical network so that they see that there’s a big enough pipe on both of those networks. So if you think of the applications and services that can be attached to the physical network, those could be any of the devices that are around and physically inside of the hotel. And as long as those pipes are big enough, and the type of pipe is fiber optics and it has all of the right kind of cabling to it, there’s going to be the ability to transport lots and lots of data. And if that connection point outside of the hotel is big enough to the main parts of the Internet, the secure parts of the Internet, then they’re in a good spot. The won’t have to worry about refreshing things every year, 18 months – it’ll be ten years before they need to refresh anything, and by then, depreciation will be complete and the cost and return on investment will have been met, and they can put in new infrastructure.

For the wireless side, I think it’s really looking at some of these intelligent wireless networks that are being deployed. You have Aruba and you have these other networks that are very high bandwidth and are designed for hospitality, but you also have Internet of things that will be attached to these networks, particularly the wireless ones. So these could be sensors, sensors that are in the drive up area that already sense a car when it comes in and the guest parks. Or, if the hotel has valet, already senses who they are, and lets the people in valet know that that person has just arrived, and you’re able to greet them directly by their name. It could be interaction of Internet of things with smart keys in cars. Since a company like Panasonic makes these smart keys – makes most of the smart keys – they have the ability to work with the hotel company and tell you who that person is before they even walk through the door, just through their smart key. So there are types of services that expand off of the wired and wireless network, that move into now internet of things, that will provide customers better understanding of where they need to be on premise.

Another example, Panasonic has this as well, they have a way to, through their light fixtures, so when you retrofit your light or you fix a light fixture, it actually acts as a wireless beacon which can detect the individual guest as they walk through the premises as to where they are and what they’re looking at and taking a measurement of them. Meaning, are they interested in the window shopping, are the stopping to look at a menu, that sort of thing, and actually signal the guest on their mobile device, or on their watch, or other wearable, of an opportunity – like there are three tables available over at the luxury café, or there are five people in line for tickets, but you can be the sixth one and just reserve your spot. Or in retail – hey, here’s an augment reality; here’s another shelf of products that you haven’t looked at or services that you might want to buy. So it’s that extension of Internet of things to the broadband network, both wireless and wired, that will become the next big opportunity for new revenue, high margin, and high quality of service for the customer.

What are some of the issues that you think hotels are facing today around security, and what can they do about that, so they’re not spending $100,000 on technology support, but they are more protected?

That’s an excellent question. There is even, in what I said, a lot of concerns that an organization should have around security, particularly around Internet of things, and around the broader band access points, whether they’re wireless or whether they’re wired, for their customer, because it is a question of security for the company itself – it’s internal and back office operations, and then of course the security for their guests. And the things they can do are actually fairly straightforward. They don’t all have to be Fortune 100, Fortune 200, security-level organizations. This is an issue I’ve had to face materially and faced head on.

It’s really three things:

  1. Defining what your data is inside your organization and securing it
  2. Protecting your company’s perimeter (firewalls)
  3. Monitoring the outflow of information

Defining what your data is inside your organization. In other words, what are the different classifications of data, and have you made that data secure? That means, have you looked what is not just PCI and PPI, have you looked at what is your legal records and financial records and so on, and have you put a priority on those particular types of records as to how secure they need to be? And one of the least expensive, and I think best ways to approach this, is to provide inside your organization a way to encrypt that data at rest, meaning when it’s sitting in someone’s hard drive, or sitting on one of your servers, and then encrypt that data whenever you decide to send messages back and forth to each other. And that’s not a particularly expensive process, and if you approach that one thing, you will have removed a lot of the anxiety that you might have as an organization. Because, you can protect your company’s perimeter which is the second thing, and you can monitor the outflow of information which is the third thing of the three things I was mentioning, but even if you do the second and the third thing and you try to do them really well, there’s always some gap, there’s always a problem. It’s not exactly “Whack a mole” but there’s always some problem that pops up because a patch on a software wasn’t updated, or something else doesn’t happen, and there’s a hole, and you’re just not aware of it and you can’t always, always 1,000% be on top of that. However, if you encrypt your data and it gets out in the wild, bad guys don’t have a lot to do with that. In other words, it’s encrypted – I guess they could spend 20 years figuring out how to decrypt it, and if they do, okay. But the fact is, if it’s encrypted at rest, and it’s encrypted in transit, then you’ve created an environment where people who are trying to do bad things to your organization, and to your guests, have little effect. You’ve almost neutralized them.

And so the approach that I would take is, yes, everyone says go protect the perimeter, put up these firewalls and then put up end-point protection on all your devices, and that’s all great. And, you should do it; no question. But if I had to give advice on priorities so you’re not have to spend tons of money, and re-spend it, re-spend it, re-spend it, I’d focus on the data. And then for the data that is most important to you, don’t necessarily connect it all to the Internet. You don’t have to all the time. And you can, by the way, archive a lot of things and put it offline and store it somewhere so that it’s not accessible to bad guys. And so, you have your most just immediate and contemporary data available to each other on a network basis. And that is not a particularly hard thing to do. It just is tedious – you have to sit down, the business owner in a line of business, and the IT people, and the cyber security people if you have them, but mostly the IT people operations people most likely, along with the Chief Legal Officer or Risk Officer, and if you don’t have those, it’s the CFO or the Controller, and you define what is most important to protect, encrypt it, encrypt it at rest, encrypt it in transit, and then take away a lot of the sleepless nights that you’re going to get otherwise, and take away a lot of the cost in having to protect yourself. I think that would be the most pragmatic approach.

You’re an expert in big data. What I want to do is to uncover some of the things hoteliers can do with their data to try to unlock some of the insights that aren’t necessarily apparent by looking at a night audit report coming out of their property management system. Do you have any recommendations on that?

Yeah, I do. By the way, security is very analogous to this because the best security when you see things are starting to happen, where people are trying to penetrate or intrude inside your organization or exfiltrate or pull data out, have to do with analytics, but these are real-time analytics. And, I think that’s the key.

There is the “at rest” analytics which is you pull a lot of data in, you could get it from your property management system, your loyalty system, even your point of sale systems, and pull it together, put it in a model, and then determine patterns so you can be prescriptive in the future – you can start to see what’s going to happen down the road. And those are typically trailing, from my experience, maybe 30 days, and they you could, if you model it out over 12 months, predict the next 12 months, but then again, things could change.

What I really like, and what I think is simple, are basic social analytics. In other words, temperament, and what would be sentiment, about a property, about their service levels, and understanding real-time reputation monitoring, so you can get a lead on either service, or a lead on sales, by looking at what people are saying, the sentiment that they’re typically using, and then ultimately reacting to them in real time as much as you can. It also gives you threads as to where those people go as watering holes for marketing. You know, one of the things that I’ve seen when companies are using big data analytics is to try to figure out what can we do with our website, what can we do with this, what can we do with that? What can we do with our social media campaigns? The truth of the matter is that most people are not going to go to your social media Twitter account. They’re not. They’re going to go to somebody else’s, but you want to figure out who that somebody else is. And if I were looking at data analytics, I would try to find out who your true influences are, and not just your TripAdvisor reviewers, but your true social media influencers for the Geo location you’re in, and then the types of services your company provides, or your hotel provides, and then ultimately what your hotel is about. And, if you can get yourself in the stream of those conversations, your data analytics have now done you favor because you’re either going to get new opportunities, or you’re going to fix problems. And getting leads I think is the number one thing, I would say – leads for either new opportunities or fixing problems, and it’s the real-time analytics out of social media that I think makes the most sense.

Do you have an insights, things that you’ve uncovered through the years of working in the industry, on things that people can look at to expose reality?

I believe that there’s, in a more contemporary sense, what I see as traffic patterns, and then again, conversation patterns, that you start to correlate between your internal data and some external data. So, if you look at social media effect on how you may refurbish, redress, or redo your hotel, you might see a correlation between what people are saying and what they’re looking for in a certain design and actually put your hotel in that form factor. And also take a look at your data, as you were saying, internally as to when is our peak, and how well we operated and what are our services like, and see where there are some correlations. For instance, if you wanted to, you could create selfie spaces inside your hotel, and you could see if that works against service levels. Whatever it may be in order to determine how you’re going to further engage that particular customer. I think from an analytics point of you, it is looking at however (you don’t have to be that sophisticated in taking a look at it), but a set or algorithms, if you will, of variables from services in your food & beverage, on your check-in, on the key points of what are considered value in the customer journey. And usually, it’s in those highest rating things, like how is the room; how clean is it; how accessible is it? But maybe drilling down a little bit further and saying, how many outlets do we have inside that room? Because, that’s a big deal for people today.

We talk about innovation in the room. It’s not even just the two screens and the entertainment, it’s how many outlets do I have. Is the bathroom adequately sized verses the room itself. Most people want the bigger bathroom, so when I looked at data, I found that what customers have said is that I’ve enjoyed this place … but I wish something and something about the bathroom. You always see that in the data sets. And, if you start asking those questions – what I’ve found is you can ask those questions back through social media – they’ll tell you, ‘I just want a bigger bathroom; You can actually make the room a little smaller; I’d like the bigger bathroom.’ And I think that’s kind of a trend you should be looking at when you look at data analytics. And then of course there’s the usual personal flavors like whether it’s natural materials and so on.

It’s the correlation of your internal data, and their (guest) comments about you, and you asking questions to them, that gets you the right answers. So, don’t let your data just sit inside your four walls and make analysis of it. Use that data to pose questions to your guests by reaching back out to them through that online relationship, and then you get the full picture and the full model.

Tell me about ROI for technology. I’m sure you’ve fought that battle for most of your career. I know you always want to tie it back to, if you invest this, you’re going to get this in return.

I think it has to do with an innovation business framework rather than an innovation technical framework. And what I mean by that is you have to lay out the big picture and get them enthusiastic and excited about the opportunity for change. But, you have to also lay out each step in that change – the operational and technical function – and with each operational and technical function, there has to be a P&L. So, in convincing, for instance, Mike Leven to go on to the Internet, it wasn’t, ‘Hey Mike, we’re going to go on and spend $130,000.’ It’s, ‘Mike, you know, I have to build these servers. It’s going to cost $15,000 to do, but that is a key element of this part of the overall project, which is going to cost $135,000. And with that, we’re going to get a return right away of more efficient reservation processing, and then we could use it for our call centers so that there is at least an immediate or tangential benefit. And then it is a weighing out, frankly, ever element and testing it out as you go along, to show that you’ve succeeded in one of the steps, rather than a big bang theory.

Tell me about a defining moment in your career. Take us there. What did it feel like?

I think there are a couple of them, but one was early on. A defining moment was putting Holiday Inn online before everyone else. And I think a second was being able to stop some major issues from occurring over at Sands under a cyber-intrusion. And I think the way I felt in both cases was, I’m doing something big; I had the idea in front of everyone else, and it was either intelligence, intuition, and hard work all converging, or maybe a little bit of luck as well, and I was able to achieve something very, very big. In one case, opening up a whole new market. In another case, helping protect a major brand or a company. And, it’s those experiences where you put yourself out there, and it turns out it’s right – you trusted yourself and your intuition, that are extraordinarily rewarding. You know, no one ever takes them away from you; they are the facts. And, it also identifies kind of like who you are, and it’s the ability to look back on that and go, ‘Look, I did that; that’s cool.’ So, I’ve always felt good about taking big chances when I felt passionate and right about it.

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