HOW OYO ATTAINS HUGE HEIGHT IN THE MARKET AFTER USING AWS SERVICES.
I hope all you have heard about OYO rooms and most of you all book OYO rooms whenever you plan your trips. We all know that there hospitality is excellent.
Introduction:
OYO Rooms is one startup that needs no introduction. Now 23 years old, Ritesh Agarwal, Founder and CEO of OYO, began his journey in January 2013, starting with one hotel in Gurgaon. The company, as of October 2016, has around 6,500 hotels in over 220 cities in India, and has been named India’s largest budget hotel chain.
HISTORY:
In 2012, Ritesh Agarwal launched Oravel Stays to enable listing and booking of budget accommodations. After undertaking months of research and staying in various bed and breakfast homes, guest houses, and small hotels across India, he pivoted Oravel to OYO in 2013.
OYO partners with hotels to give similar guest experience across cities. Shortly after launching Oravel Stays, Ritesh Agarwal received a grant of $100,000 as part of the Thiel Fellowship from Peter Thiel. OYO currently has over 17,000 employees globally, of which approximately 8000 are in India and South Asia. OYO Hotels & Homes is a full-fledged hotel chain that leases and franchises assets. The company invests in capex, hires GMs to oversee operations and customer experience as well as generating around a million job opportunities in India and South Asia alone. OYO has also set up 26 training institutes for hospitality enthusiasts across India.
Oyo Rooms (stylised as OYO), also known as Oyo Hotels & Homes, is an Indian hospitality chain of leased and franchised hotels, homes and living spaces. Founded in 2013 by Ritesh Agarwal, OYO initially consisted mainly of budget hotels. The startup expanded globally with thousands of hotels, vacation homes and millions of rooms in India, Malaysia, UAE, Nepal, China, Brazil, Mexico, UK, Philippines, Japan, Saudi Arabia, Sri Lanka, Indonesia, Vietnam, the United States and more.
The company’s investors include SoftBank Group, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb and China Lodging Group.
The company is currently valued at $10 billion as per the last round of funding.
In September 2018, OYO raised $1 billion, of which the RoC filing for the amount of $100 million raised from Star Virtue Investment Ltd. was made on 13 February 2019.
In October 2019 — Series F funding of $1.5 billion led by SoftBank Group, Lightspeed Venture Partners and Sequoia India.
Founder & CEO, Ritesh Agarwal, through RA Hospitality Holdings (Cayman) in 2019 signed a $2 billion primary and secondary management investment round, supported by global institutional banks and his financial partners, subject to regulatory and shareholder approvals. Lightspeed Venture Partners, and Sequoia India, OYO’s early supporters, are selling part of their holdings in order to help the founder increase his stake and thereby commitment while remaining invested significantly in the company’s long-term mission.
Problem faced by OYO
Oyo undoubtedly faces a tough challenge for the larger hotel chains, say analysts.
“While Oyo has been attempting that (data analytics), they are not able to match the big hotel chains because, usually, the property owners are not willing to share customer data with Oyo,” said Sanchit Vir Gogia, chief analyst, founder and CEO of Greyhound Research. Calling Oyo “a disruptor when it started”, he is of the view that over time, the entire premise of Oyo has been “weakening”.
“If you look at the Starwoods and Hyatts of the world, they have been using a ton of technology to understand customers and serve better deals to them. This is something that Oyo has not been able to counter,” said Gogia. The large hotel chains, according to him, use customer data from multiple sources to know about their dining or stay experience and offer them standardized yet tailored experiences across properties. Also, he said, Oyo’s main customer base is budget travellers, who do not spend much on in-room dining and other services, which is where hotels make the most money.
Gogia also asserts that in terms of tech spend and usage, it is not just Oyo but Indian hotel chains in general that fare poorly compared to their multinational counterparts. “They typically spend 0.1–0.5% of their revenue on technology whereas the ideal situation would be 2 to 3%,” he said. However, he added that the annual technology spending in the hospitality segment in India is growing at a relatively fast pace of 30–35%. “Hotels are increasingly looking at emerging technologies such as AI and virtual reality,” he added.
Now , lets talk about how OYO named India’s largest budget hotel chain.
The main and the key reason is AWS
“Scaling our technology stack to support growth and deliver a consistent and standardized experience to guests would be extremely difficult without the scale, services, and elasticity offered by AWS.”
Anil Goel, Group Chief Technology & Product Officer, OYO Rooms
To manage the complexity arising from a diverse set of hotel owners and operations spanning 230 cities across India, Malaysia and Nepal, Oyo has opted for a cloud computing model to host its applications — thereby saving on capital and allowing it to be more agile technically. “Oyo is 100% on cloud and all our infrastructure is on AWS (Amazon Web Services) across multiple availability zones,” said Goel. He added that the company works closely with its affiliates and property owners, involving them in product development and incorporating their feedback in new app features.
“About 95% of the demand (for rooms) comes through our own (distribution) channels and the largest chunk out of that comes through the website and mobile apps. We also get bookings through our call centre,” Goel said.
Big data analytics, according to Goel, is one of the foundations for Oyo to understand customer behaviour, as it generates “hundreds of gigabytes of data” on a daily basis. This helps Goel and his team also “understand demand patterns and maximize the occupancy rate in hotels by dynamically changing pricing”. For analytics, Oyo uses a combination of a data warehouse built in-house and open-source softwares such as Hadoop, Hive and SQL databases. It also uses third-party tools such as Tableau and Silk.
AWS SERVICES USED:
A) AWS Elastic Beanstalk:
AWS Elastic Beanstalk is an easy-to-use service for deploying and scaling web applications and services developed with Java, .NET, PHP, Node.js, Python, Ruby, Go, and Docker on familiar servers such as Apache, Nginx, Passenger, and IIS.
You can simply upload your code and Elastic Beanstalk automatically handles the deployment, from capacity provisioning, load balancing, auto-scaling to application health monitoring. At the same time, you retain full control over the AWS resources powering your application and can access the underlying resources at any time.
There is no additional charge for Elastic Beanstalk — you pay only for the AWS resources needed to store and run your applications.
Benefits
Fast and simple to begin
Elastic Beanstalk is the fastest and simplest way to deploy your application on AWS. You simply use the AWS Management Console, a Git repository, or an integrated development environment (IDE) such as Eclipse or Visual Studio to upload your application, and Elastic Beanstalk automatically handles the deployment details of capacity provisioning, load balancing, auto-scaling, and application health monitoring. Within minutes, your application will be ready to use without any infrastructure or resource configuration work on your part.
Developer productivity
Elastic Beanstalk provisions and operates the infrastructure and manages the application stack (platform) for you, so you don’t have to spend the time or develop the expertise. It will also keep the underlying platform running your application up-to-date with the latest patches and updates. Instead, you can focus on writing code rather than spending time managing and configuring servers, databases, load balancers, firewalls, and networks.
Impossible to outgrow
Elastic Beanstalk automatically scales your application up and down based on your application’s specific need using easily adjustable Auto Scaling settings. For example, you can use CPU utilization metrics to trigger Auto Scaling actions. With Elastic Beanstalk, your application can handle peaks in workload or traffic while minimizing your costs.
Complete resource control
You have the freedom to select the AWS resources, such as Amazon EC2 instance type, that are optimal for your application. Additionally, Elastic Beanstalk lets you “open the hood” and retain full control over the AWS resources powering your application. If you decide you want to take over some (or all) of the elements of your infrastructure, you can do so seamlessly by using Elastic Beanstalk’s management capabilities.
B)Amazon Relational Database Service:
Amazon Relational Database Service (Amazon RDS) makes it easy to set up, operate, and scale a relational database in the cloud. It provides cost-efficient and resizable capacity while automating time-consuming administration tasks such as hardware provisioning, database setup, patching and backups. It frees you to focus on your applications so you can give them the fast performance, high availability, security and compatibility they need.
Amazon RDS is available on several database instance types — optimized for memory, performance or I/O — and provides you with six familiar database engines to choose from, including Amazon Aurora, PostgreSQL, MySQL, MariaDB, Oracle Database, and SQL Server. You can use the AWS Database Migration Service to easily migrate or replicate your existing databases to Amazon RDS.
Benefits
Easy to administer
Amazon RDS makes it easy to go from project conception to deployment. Use the Amazon RDS Management Console, the AWS RDS Command-Line Interface, or simple API calls to access the capabilities of a production-ready relational database in minutes. No need for infrastructure provisioning, and no need for installing and maintaining database software.
Highly scalable
You can scale your database’s compute and storage resources with only a few mouse clicks or an API call, often with no downtime. Many Amazon RDS engine types allow you to launch one or more Read Replicas to offload read traffic from your primary database instance.
Available and durable
Amazon RDS runs on the same highly reliable infrastructure used by other Amazon Web Services. When you provision a Multi-AZ DB Instance, Amazon RDS synchronously replicates the data to a standby instance in a different Availability Zone (AZ). Amazon RDS has many other features that enhance reliability for critical production databases, including automated backups, database snapshots, and automatic host replacement.
Fast
Amazon RDS supports the most demanding database applications. You can choose between two SSD-backed storage options: one optimized for high-performance OLTP applications, and the other for cost-effective general-purpose use. In addition, Amazon Aurora provides performance on par with commercial databases at 1/10th the cost.
Secure
Amazon RDS makes it easy to control network access to your database. Amazon RDS also lets you run your database instances in Amazon Virtual Private Cloud (Amazon VPC), which enables you to isolate your database instances and to connect to your existing IT infrastructure through an industry-standard encrypted IPsec VPN. Many Amazon RDS engine types offer encryption at rest and encryption in transit.
Inexpensive
You pay very low rates and only for the resources you actually consume. In addition, you benefit from the option of On-Demand pricing with no up-front or long-term commitments, or even lower hourly rates via our Reserved Instance pricing.
Amazon Elastic Container Service for Kubernetes :
Amazon Elastic Kubernetes Service (Amazon EKS) is a fully managed Kubernetes service. Customers such as Intel, Snap, Intuit, GoDaddy, and Autodesk trust EKS to run their most sensitive and mission critical applications because of its security, reliability, and scalability.
EKS is the best place to run Kubernetes for several reasons. First, you can choose to run your EKS clusters using AWS Fargate, which is serverless compute for containers. Fargate removes the need to provision and manage servers, lets you specify and pay for resources per application, and improves security through application isolation by design. Second, EKS is deeply integrated with services such as Amazon CloudWatch, Auto Scaling Groups, AWS Identity and Access Management (IAM), and Amazon Virtual Private Cloud (VPC), providing you a seamless experience to monitor, scale, and load-balance your applications. Third, EKS integrates with AWS App Mesh and provides a Kubernetes native experience to consume service mesh features and bring rich observability, traffic controls and security features to applications. Additionally, EKS provides a scalable and highly-available control plane that runs across multiple availability zones to eliminate a single point of failure.
EKS runs upstream Kubernetes and is certified Kubernetes conformant so you can leverage all benefits of open source tooling from the community. You can also easily migrate any standard Kubernetes application to EKS without needing to refactor your code.
Benefits
High Availability
EKS runs the Kubernetes management infrastructure across multiple AWS Availability Zones, automatically detects and replaces unhealthy control plane nodes, and provides on-demand, zero downtime upgrades and patching.
Serverless option
EKS supports AWS Fargate to provide serverless compute for containers. Fargate removes the need to provision and manage servers, lets you specify and pay for resources per application, and improves security through application isolation by design.
Secure
EKS automatically applies the latest security patches to your cluster control plane. AWS also works closely with the community to ensure critical security issues are addressed before new releases and patches are deployed to existing clusters.
Built with the Community
EKS runs upstream Kubernetes and is certified Kubernetes conformant, so applications managed by EKS are fully compatible with applications managed by any standard Kubernetes environment. AWS actively works with the Kubernetes community, including making contributions to the Kubernetes code base that help you take advantage of AWS services and features.
After using AWS benefits gain by OYO :
- Scales to support rapid annual growth
- Forecast to reduce infrastructure management time by 50%
- Automates deployment and provisioning
- Supports plans to provide analytic capabilities
CONCLUSION :
Now after reading above blog you can understand how OYO is using AWS services and how it is managing its business. So you can think by this how Ritesh Agarwal became world’s youngest self made billionaire after Kylie Jenner.
