MINICASE: Consulting for the Royal Hotel The Royal Hotel in New York City is a luxury all-suite hotel primarily serving an executive clientele who are visiting Manhattan on business. Typically, these business guests stay for three to six days, during which time they use their hotel suite as a temporary office. Thus Royal Hotels management has positioned the property to cater to the many needs of this busy and demanding audience. Amenities include in-suite printer and copier, three two-line telephones with voicemail and remote message alert, 24-hour business center, wired and wireless Internet access in rooms and public areas, fitness center, in-suite dining, laundry service, complimentary shoe shine, complete Bluetooth audio system, dedicated high-speed elevators, and more. Hotel management is proud of their capacity to always meetand sometimes anticipatethe evolving business guests needs. Back in the 1990s, they were one of the first properties to offer wired Internet connection in every room. Today, guests can control room facilities through their smartphones, select TV and radio channels, and stream content from their devices to the large-screen wall-mounted television. However, as the old saying goes, the cobblers children go unshod. The hotel was still using an aging server lying on a rack in a small equipped room converted from a managers office. The system is critical for hotels operations taking care of bookings, accounts receivable, accounting, materials, payroll, and maintenance. The server is a tier-1 enterprise class hardware with associated storage and backup units. It is running 24/7 with the exception of scheduled downtimes for maintenance and upgrades. The server costs the Royal Hotel $25,000 and has operating costs (e.g., electricity, software licenses and maintenance) of about $2,100 a year. It has a usable life of five years. WizTech, a California-based high-tech firm specializing in cloud solutions, has recently contacted the Royal Hotel. This contact is very timely, as the Royal Hotel was about to replace the aging server and assume the costs discussed above. WizTech is beginning to commercialize a cloud solution of the same system the hotel uses that enables any computer connected to the Internet to access the property management system (PMS). Thus the cloud solution is a perfect substitute for the server. Moreover, to ensure a degree of business continuity, WizTech offers, free of charge, a work offline service that enables temporary operations in case of unavailable Internet access; this service is secure and managed seamlessly by WizTech until the connection is back in operation. WizTechs premium solution costs $500 per month. Each customers cloud solution costs WizTech $1,500 to setup. Discussion Questions 1. What should the Royal Hotels IT department do? 2. Does WizTech enjoy a competitive advantage (or disadvantage) in this market? 3. Can you quantify such advantage (or disadvantage)?