How easyJet keeps IT costs down while still delivering innovations
European airline easyJet runs its IT department at about half of what it costs its competitors as a share of annual revenue.
The secret to the airline's thrift, according to the company's enterprise architect Bert Craven, is not to burden in-house IT with running anything that it doesn't really have to.
easyJet runs an IT team of about 120 people on 0.85 per cent of annual revenue, compared to an average of 1.65 per cent of revenue for the airline industry.
The airline uses SaaS to provide much of its back office systems, including payroll, engineering and crew email, and has been using managed hosting to provide a range of non-essential services since 2006.
”These are commodity things, there is no competitive advantage to be gained from running them,” said Craven.
easyJet owns two datacentres, which contain both internally managed IT systems and a private cloud platform managed by Savvis. It also uses the Microsoft Azure cloud platform to test out new business ideas before rolling them out, such as allowing staff to use mobile devices to check in passengers and their bags.
Farming out the non-essential systems frees easyJet's in-house team and infrastructure to be dedicated to tasks that are core to the business.
”Something is either the crown jewels because it’s operationally critical or because it represents massive commercial advantage,” said Craven.
”We have to run a reservation system and departure control system that have to be up all the time. We don’t sell cans of beans or books, we sell aircraft seats, and you can’t sell that seat twice. The idea that we can have any kind of inconsistency in that data is an anathema, we can’t really do that. Those systems must also be massively disaster resilient."
A specialised distributed SAN fabric between the two datacentres allows easyJet to carry out transaction-by-transaction global replication for its core systems.
"You just can‘t run that as private cloud, it’s not commodity enough," said Craven.
Over the last 18-months the number of people within the IT department has grown from about 65 to 120, as the department has stepped up operations to support changes like easyJet offering passengers the ability to book seats onboard flights.
”We're now delivering an awful lot more but we're now 0.85 per cent of revenue,” he said.
”As you grow in size the circumference of your perimeter gets bigger and bigger. No organisation is going to let its IT function expand at that rate. They're going to say 'No, we want you to stay this big and deliver more'. It changes your focus and you say 'Let's try and get more of our perimeter delivered by third parties.”
Craven isn't just talking about making greater use of hosted services and SaaS, he's also referring to building APIs to internal systems so external developers can build apps and services that benefit customers, for example offering an APIs that feeds flight pricing to a travel comparison app.
"If organisations focus on building real value in their corporate systems and surround those in a really rich set of APIs this opens up a world of opportunities that don’t necessarily require any additional IT resource to exploit. If somebody says ‘I've got a brilliant idea for a mobile app’ you can say ‘go ahead and build it, here's our API, here's a key, knock yourselves out'."