Nov

24

Springer’s Dance to the Music of Time

Filed Under Blog, Industry Analysis, Publishing, STM | 2 Comments

Once again the hills around Heidelberg are alive to the sound of music.  This time, however, we know when the music stops.  As the Springer debt of around £2 billion matures in the next year, owners Cinven and Candover must decide whether to renegotiate with the banks – expensive – or sell and trigger the change of ownership clauses that allow the banks to renegotiate the debt – very expensive , but someone else’s problem.  After all, Cinven and Candover have already cleared their profits in the three re-financings they have already led and will not wish to stick around to see that margin diminished. The FT (24 November 2009) says that the private equity owners will now sell the whole of Springer for less than the €400 million which they had hoped to get for only 49% just a few months ago .

Those private equity players still in the bidding (the FT says they are EQT and Apax) must be very miffed by these proceedings.  And the Springer management team, which has done a splendid job in reviving the margins of a great but wasted asset since it took over in 2003, must also be scratching their heads, and wondering if this is the moment to leave the dance floor and head for the bank.  But if the price is really where the FT says it is, then the door would be open for many more players to join the game of musical chairs.  The private equity players are put off by the debt , the regulator would rule out Elsevier, Wiley-Blackwell are still swallowing and saying never again, but a joint enterprise of Thomson Reuters Science and Healthcare with Springer, floated in New York , would make great sense.  It gives Springer more US exposure and adds a healthcare arm, and the potential of using ISI as an upward step into academic and research service markets.  Which is just where a major primary content publisher should be wanting to go.

Verdict: this is just too obvious ever to take place. When the music stops, you usually find you are on the wrong chair, and sometimes that you do not have a chair at all.

Nov

23

Progress is always circular

Filed Under B2B, Blog, Industry Analysis, Workflow | 2 Comments

It is never a waste of time keeping a close eye on Globalspec. The engineering design community has been for a number of years the poster site for B2B community. Under Jeff Killeen’s outstanding management, and with an understanding investor in Warburg Pincus, which now holds a very considerable asset, the service has shaken the engineering information sector from end to end with a demonstration of what the power of user-contributed content really means – and what it can accomplish if users become wedded to sharing it.

Even so, some may have glanced with surprise at last week’s announcement of workflow tools on the site.  After all, supply chain management, parts catalogues and project management tools were early plays in the late nineties as Reed Business Information and others sought to drive into supply chain management issues as a natural follow through to their own web content. Right idea, wrong time.  We may have spent a decade now demonstrating exactly how much first rate content you need, and how much third party content as well, in order to carry this off.  Most of those services died on the vine: who now remembers VerticalNet?  But Globalspec did not come from proprietory content, but from community content.  Its users came to contribute and utilize, thus building their own directories (Globalspec has 148,000, but users can import their own) and their own parts reference space, cross-referenced to the use of those parts in other designs, which are both natural extensions of why those users are in Globalspec to begin with.  Adding project planning tools on top of that  is a no brainer.

So the lessons are simple: workflow moving towards supply chain management is possible if you have a compelling content place for users and a natural, neutral meeting ground for a community.  There were no short cuts.  Timing depends on brand credibility, traffic volume and community recognition.  You have to be permitted by the community to act for them.

Have Globalspec got this precious timing right?  With the ink not dry on the press release, it is hard to tell.  However, as in other verticals, players will find that users are tending to polarize on one or two services.  These duopolies make it tough to be an outside competitor.  In engineering it may come down to Globalspec, IHS and McGraw-Hill.  Someone has to be a loser.

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