Totality in Hospitality, Hospitality in Totality

Sudhir Raikar, IIFL | Mumbai | March 20, 2015 09:37 IST

Despite the abundance of vendors and their fancy USPs, most disparate hotel software solutions have inherent issues that only grow in complexity with higher scales and stakes. The Surat-based eZee Technosys with its integrated value proposition and global network is keen to carve a niche in what’s essentially a crowded marketplace. IIFL’s Sudhir Raikar spoke to the founders about the ethos, essence and credence of their company.

Hotel management software worldwide is essentially a cluttered market space. Many players have sprung up, more so in recent times, all clamoring for attention, all claiming definitive USPs in different market segments including multi-national hotel chains, mega hotels, resorts, boutique hotels, restaurants or eateries or joints. But in reality, most hotel establishments have to fight the demons of snags and glitches on a day-to-day basis, born from the inadequacy of their chosen software solutions in addressing diverse business needs across functions – reservation, front desk, house-keeping, restaurant, guest relations, maintenance or other support functions. eZee Technosys (http://www.ezeetechnosys.com/) – brainchild of Vipul Kapoor and Hitesh Patel - claims an enduring value proposition in the form of an integrated product catering to the diverse needs of the hospitality sector.
 
It all began in 2005, in a tiny room of Vipul’s Surat residence in the Indian state of Gujarat. This was the breeding ground for umpteen small-sized software projects, serviced with the help of only two employees and zero investment. Thanks to Vipul’s strong academic background (an MCA Gold Medalist) and proven analytical skills, a product focused on the hospitality sector was discreetly but definitively taking shape in software code form, parallel to the regular assignments. One of the prime challenges was the limited market reach that Surat provided, then a predominately blue-collar city of virtually no IT presence. The company’s lack of marketing experience made the task even more elusive. As a way out, it went about building partnerships with existing distribution channels and the strategy stemming from compromise reaped rich dividends as the robustness of the product helped the channels propose a better value to the market. At one point, sales through distributors went up as high as 70%. Today, eZee employs a judicious blend of reach-out options including direct marketing, partner programs and internet marketing. eZee clients across the globe include mega hotels chains, whole range of star hotels, fine dining and casual dining restaurants, fast food outlets, cafes, bars and lounges. Its solution suite includes eZee Front Desk for Hotel Management with multi-language support in English, French, Spanish, Arabic, and Chinese, eZee BurrP! for Restaurant management, eZee Absolute for Online Hotel Management, eZee Reservation - Online Booking Engine and Channel Manager, eZee Centrix – Hotel Channel Manager, eZee iFeedback – Guest Feedback System, eZee iMenu – Tablet-based Restaurant Menu, Appytect – Hotel Mobile App, Aruti – HR & Payroll Management and eZee Loyalty – Loyalty Management System.
 
Excerpts of the exclusive conversation with CEO Hitesh Patel and CTO Vipul Kapoor, in Q & A form:
 
1. How has the market responded to your 'integrated' value prop?
 
Hitesh: Information Technology, ever evolving that it is, has virtually transformed the hospitality landscape in the past two decades, touching every business aspect and streamlining interconnected operations. The industry has finally woken up to the actuality that integrated solutions under one roof resolve most of the critical pain points of day-to-day departmental operations. Imagine a hotel using a property management system, channel manager, online booking engine, and restaurant point-of-sale software, all from different vendors. The disparate setup needlessly burdens the staff with an intricate maze of multiple user accounts and different support teams, not to mention the turbulent experience at the user end. Integrated solutions offer a clear edge in that they remove the need for multiple logins, minimize human error, offer a single dashboard for multiple systems and provide one-point support. In our experience, nearly every prospect has insisted on acquiring more than one solution from us right from the formative stages of the sales process. Even our single product clients eventually opt for other products over time. Our internal survey based on three-month client sign up data reveals that every new client of ours buys an average of 2.5 products from us. And over a period of 12 months, the upgrades take the tally to 3.25 products. Thanks to our integrated package, we have been able to substantially expand our partner network of distributors around the globe. So, it’s been a win-win at both ends.
 
2. What are the key market challenges for your industry?
 
Hitesh: Ever since the emergence of advanced technologies, competition has skyrocketed, especially in the cloud computing space. The heavy influx of investment in the Software as a Service (SaaS) business model has seen a host of start-ups entering the fray. This is great news for the industry as businesses today have more options to choose from than ever before. The downside is the rise of the blind customer acquisition model, whereby newer companies offer solutions at low profit margins or even free in some cases. This has a cascading effect in the form of fractured product development and poor customer service as companies are then forced to cut corners to ensure sustenance, as against sustainability. Further, there’s a lack of complete solution providers. A whole lot of companies claiming to provide integrated solutions are in reality selling OEM products acquired by other organizations. The needless supply-side hierarchy weakens support and causes an uneven product experience in terms of use and quality. We strive to make a positive difference by giving our clients a truly integrated product of uniform user experience and seamless access to multiple technologies.
 
3. How is your clientele spread across the globe? Can you name a few of your success stories?
 
Vipul: We have clients in around 140 countries, spread across Asia-Pacific, Europe, Middle East, the Americas, and Africa. Our clients are incredibly diverse; we cater to numerous star properties and high end resorts, but majority of our clients fall in the small to mid-range bracket. One of the most recent success stories is that of Zostel (http://www.zostel.com/) - India’s first chain of branded backpacker hostels. Spread across eight cities, they offer a unique value proposition - accommodation options for the compulsive backpacker that are safe, hygienic, affordable and centrally located…all in the same breath. They sought a cloud based PMS to manage their connected hostels, an online booking engine for their website, and a channel manager to distribute their rates and inventory on hostel websites with an integrated Restaurant POS. Hostels catering to a niche market have been around for decades in other countries, however, it is still a new concept in the sub continent. Quite obviously, there’s hardly any specialized hostel software solution and certainly none with the kind of flexibility they were looking for. They zeroed down on our name after evaluating multiple industry vendors. The obvious advantage right off the gate was the single vendor integrated solution pack – which is our cloud solution eZee Absolute – comprised of property management system, online booking engine, channel manager and POS – coupled with our restaurant POS, eZee BurrP! This made the Zostel configuration and implementation easier and quicker. In addition, they were able to extend the solution across hostels exactly in line with their expansion strides. We provided them with what they sought and much more. Our approach to potential clients has remained the same ever since inception: we carefully study the client’s operational landscape to come out with the most optimal solution combo addressing its diverse needs.
 
4. Technology seems to be the real value-add of your proposition…
 
Vipul: In only a span of a decade, we have transitioned between three different technologies - from Visual Basic (VB) to .NET to LAMP. Enhancing our technology and pushing the limits of our products has been our constant endeavor. We are arguably the first company to offer a robust property management system on premise and on cloud. Our comprehensive set of integrated solutions sets us apart from the pack. Closely aligned with our customer-centric approach is our unflinching focus on continuous innovation. Both have fuelled our exponential growth over the years. eZee products are bug free, rigorously tested, regularly updated and upgraded in line with tech and domain developments and offer smart and secure interfaces with disparate third party hardware and software. Today, we are one of the few companies offering a robust property management system in both versions - Desktop and Cloud.

We were experimenting with cloud technology way before others and the choice of cloud as the platform for our newer products was only natural. With on-premise solutions, as robust as they can be, clients often run into sticky issues like hardware failures, upgrades and virus attacks. With cloud computing, issue resolution is instant, whatever the number of snags. Given the apparent advantages, we are able to offer fast, efficient, risk-mitigating and cost-effective solutions. Cloud also helps us reach out to more markets and more distributors. Customer centricity is at the core of our software development. Our IT team works closely with clients and resellers at every stage of development constantly upgrading and updating products. As far as innovation is concerned, it was more need-based to begin with. Once the base was solidified, we had to innovate to differentiate ourselves from the competition.
 
5. You are a TripConnect premium partner. How much of a market advantage it offers you?
 
Vipul: TripAdvisor's TripConnect platform is quite robust and provides hoteliers with the unique opportunity to play a bigger role in online distribution. Having said that, the platform is still young and we have yet to experience its full potential as such. It does open up the market for our online booking engine but the sale, all said and done, happens only if and when the hotelier prefers to opt for the service.
 
6. Your website link 'Investors' seems to imply that you are open to new investments. Are you looking at private equity or plan to launch a public issue?  
 
Hitesh: In self-sustaining mode right from the first year, we have been able to maintain a CAGR of 60% throughout. We aren’t that big in size to explore the capital market route, nor do we have any such plans. Through both our real estate investments - regional offices in Malaysia and Goa - we have established eZee as a leading hospitality solution brand. To expand our customer base, we wish to open more sales and support offices in different geographies for which we are open to strategic partnerships with professional fund houses. More than investing in the eZee value prop, we would want them to help us further expand our presence worldwide.
 
7. Given your long presence and enviable tech proposition, you maintain a relatively low profile in the media.
 
Hitesh: eZee is a conventional startup when compared to today’s venture capital-backed aspirants. Based in Surat, potent exposure channels were hard to find and to be honest; we were quite oblivious to them. Our approach was always more grounded and client oriented, and the single-minded focus was on consistently delivering products of measurable business value to our clients. Even today, we are rather skeptical about media activity purely based on its obscure ROIs. We would rather gainfully employ the same time and resources for direct marketing, our prized trump card over the years. Furthermore, we enjoy an enviable position in the Google universe, on majority of the top-searched industry keywords. Our inbound marketing effort has been as effective.
 
8. What are the key eZee aspirations going forward?
 
Hitesh: As we move forward, and continue to evolve and grow, we’ll set realistic goals in the operational context of evolving market conditions as also our strengths and weaknesses but we’ll definitely stick to our time-tested fundamentals of delivering competent products. We’ll also remain ever-vigilant about funds deployment being a privately funded enterprise. By 2017 end, we intend to cross the 5000 mark in our diverse and unique clientele, and hope that each client makes the most of our all-inclusive solution suite.
 
9. How has the 2015 budget impacted your prospects?
 
Hitesh: With 85% of our business coming from overseas, it’s safe to say that the new budget has had no significant impact. As an aside though, we feel the proposed cut in corporate tax rates is a welcome move but the dividend distribution tax seems harsh and a bit illogical. We would have liked this year’s budget to address this nagging issue.
 
Unlike many startups, tech in particular, which take the easier route midway in their evolutionary voyage, of either merging with the big fish or swaying to the tunes of private investors with deep pockets, eZee has fervently held on to the cocoon of its true-blue character, rooted in scalable innovation and sustainable growth. This non-conformist stance undoubtedly deserves rich accolades. Having said that, eZee should place more faith in the value of a well articulated value proposition to the world at large which is not necessarily synonymous with a superficial media promotion of debatable ROI. Notwithstanding the strong fundamentals, eZee deserves a gainfully visible brand, not just a manifestly viable proposition, to help it create a vibrant ecosystem of stakeholders including compatible investors, steadfast alliance partners and technology collaborators.
 
If eZee’s software development shift from Visual Basic to .Net was evolutionary, the eZee move to the LAMP stack was revolutionary, and far from easy, as WAMP would have proved a cozy choice given the tryst with the Microsoft environment. Yet eZee placed its faith in Linux for its flexibility and security in development and deployment and the collaborative charm of community support. Starting afresh on the Linux command line and creating a robust product in a globally competitive market is by far a phenomenal achievement. Like how eZee smartly transitioned from the cold confines of proprietary environment to the green house of open source software, it needs to transition from its unknowingly apologetic small-town fixation to emerge as one of the leading global contenders in end to end hospitality solutions. Being rich in stories – whether of remarkable technological innovation or incredible market triumphs - is simply great, but credible story-telling is equally important.      

 

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