Feb
14
Open… and Yet Shut
Filed Under Big Data, Blog, data analytics, healthcare, Industry Analysis, internet, Publishing, Reed Elsevier, Search, semantic web, STM, Uncategorized, Workflow | Leave a Comment
I am a passionate fan of the World of Open. Without a network ethic of Open we will strangle the world of connectivity with restriction and force ourselves into re-regulating just those things which we have so recently decongested. Yet not all the things we want to designate as Open will be open just because we put the word in front of the previous descriptor. In most instances being Open does not necessarily do the trick on its own – someone has to add another level of value to change Open meaning “available” to Open meaning “useful”. So, the argument that Open Access journals are an appropriate response to the needs of researchers and to a wider public who should be enjoying unfettered access to the fruits of taxpayer-funded research would seem to be a given. But creating real benefits beyond such general statements of Good seems very hard, and the fact that researchers cannot see tangible benefits beyond occupying the moral high ground probably connects with the grindingly slow advance of Open Access to around a quarter of the market in a decade.
I feel much the same about Open Citations. Reading the latest Initiative for Open Citations report at i4Oc.org, I find really good things:
“The present scholarly communication system inadequately exposes the knowledge networks that already exist within our literature. Citation data are not usually freely available to access, they are often subject to inconsistent, hard-to-parse licenses, and they are usually not machine-readable.”
And I see an impressive number of members, naturally not including either Clarivate or Elsevier. Yet using the argument above I would say that either of these is most likely to add real value to Open Citations, and certainly more likely than most of the members of the club. What we have here, all the time, is a constant effort to try to emulate a world which has largely now passed by, and we do it by trying to build value propositions from wholly owned artifacts or data elements, thus turning them into proprietory systems. This urge to monopoly is clearly being superseded: what has happened is that the valuation systems by which markets and investors measure value has not caught up with the way users acknowledge value.
Outside of the worlds of research and scholarly communication it seems clear that the most impressive thing you can say about the world of data is “Use it and lose it”. The commoditization of data as content is evident everywhere. The point about data is not Big Data – a once prominent slogan that has now diminished into extinction – but actionable data. The point is not collecting all the data into one place – it can stay wherever it rests as long as we can analyse and utilise it. The point is the level of analytical insight we can achieve from the data available, and this has much to do with our analytics, which is were the real value lies. Apply those proprietory analytics back into the workflow of a particular sector – the launch music around Artifacts in Healthcare in Cambridge MA was ver notceable last week – and value is achieved for an information system. And one day, outside of copyright and patents, and before we get to the P&L account, someone will work out how we index those values and measure the worth of a great deal of the start-up activity around us.
So from this viewpoint the press release of the week came from Clarivate Analytics and did not concern Open at all directly. It concerned a very old-fashioned value indeed – Brand. If the world of scholarly communication is really about creating a reputation marketplace, the ISI, Eugene Garfield’s original vehicle for establishing citation indexing from which to promulgate the mighty Impact Factor, is the historical definition point of the market in scholarly reputation. By refounding it and relaunching it, Clarivate seem to me to be not just saying how much the market needs that sort of research right now, but to be aiming at the critical value adding role: using the myriad of data available to redefine measurement of reputation in research. In many ways Open Citations will assist that, but the future will be multi-metric, the balance of elements in the analytics will be under greater scrutiny than ever before, and ISI will need to carry the whole marketplace with them to achieve a result. That is why you need a research institute, not just a scoring system. And even then the work will need a research institute to keep it in constant revision – unlike the impact factor the next measure will have to be developed over time, and keep developing so that it cannot be influenced or “gamed”. In the sense I have been using it here, ISI becomes the analytical engine sitting on top of all of the available but rapidly commoditising research data.
We have come very quickly from a world where owning copyrights in articles and defending that ownership was important, to this position of commoditized content and data as a precursor to analysis. But we must still be prepared for further shortening of the links and cycle re-adjustments. Citations of evidential data, and citations on Findings-as-data without article publishing will become a flood rather than the trickle it is now. Add in the vast swathes of second tier data from article publishing in India, China or Brazil. Use analytics not just for reputational assessment, but also for trend analysis, repeat experiment verification and clinical trials validation. We stand in a new place, and a re-engineered ISI is just what we need beside us.
Feb
2
Thomson Reuters: Owners and Expectations
Filed Under B2B, Big Data, Blog, Cengage, data analytics, Education, Financial services, healthcare, Industry Analysis, internet, news media, Reed Elsevier, Thomson | Leave a Comment
Thomson Reuters recent decision to sell over 60% of its share in its Finance and Risk division to Blackstone has met with a mixed market reaction. Analysts are divided on why this was done and what it means. Here is an interpretation gathered from internal and external evidence.
BACKGROUND
Thomson Reuters brought together the financial services interests of both Thomson and Reuters, alongside Thomson’s US-dominant legal and tax information services. Reuters had been a public corporation in the UK, owned by the newspapers who bought its services (like PA or AP). Its culture was very much a market services culture. Thomson was a Canadian corporation in newspapers and radio that sold its major interests there in the late 1950s to move to the UK, and, fuelled by its North Sea oil investments, developed into one of the largest UK media groups. Its culture was as the investment portfolio of founder Roy Thomson, who became the first Lord Thomson of Fleet. The group acquired ruthlessly through the 1960s and 1970s until union difficulties and a negative view of the future of the UK outside of the EU led to the sale of most of the UK assets and the rebase-ing of the company in the US. This strategy was created by Roy’s son Ken Thomson, who led the company after his father’s death and who retained the family holding, 70 % of group equity, in the family’s Woodbridge Trust in Toronto.
Under Ken Thomson the group expanded still further from its Stamford, Conn. HQ, but it also began to vigorously re-assess its holdings as well. Disposals became as frequent as acquisitions and ex Thomson companies are widespread: Thomson regional newspapers (Trinity Mirror), Thomson B2B (EMAP), Thomson Learning (Cengage), Thomson Nationals (News International) and, more recently, Thomson Healthcare (Truven IBM), and Thomson Science (Clarivate Analytics). The idea of disposals and portfolio management is hard-wired into this group.
Under David, the third Lord Thomson, now a man in his mid 50s, a serious attempt was made to focus and reconstruct. The purchase of Reuters, while enriching the cash-starved newspaper owners, was intended to provide a competitive bulwark against Bloomberg . It was also argued that the Reuters managers would refresh their Thomson senior colleagues – many of whom took the hint and left. Finally, here was a chance to put together something wider in scope than Bloomberg: a solutions company for the financial services and legal and tax requirements of the worlds corporates.
This strategy appears to have failed. The Woodbridge Trust, which in the Reuters deal had diluted itself to 53% of the group, has now increased its holding through share buy backs, but is relinquishing its position in the Financial Services and Risk side for $17 bn to Blackstone.
WHY?
Decisions of this type do not arise overnight and this one had its makings in the original Thomson Reuters deal:
That agreement did not work out as envisaged. The combination of Thomson Financial and Reuters hardly rocked Bloomberg, though the latter was more expensive. The management team was not as effective as had been hoped, and Tom Glocer and Devon Wenig left the business. And the integration took longer, cost more, and and was less effective than hoped.
The Eikon programme began in the teeth of a recession, and far from being the competitive lynchpin became an expensive passenger until it really began to get some momentum in the past two years. Integration of the three parts into a corporate whole has been slow. Data is still largely siloed and across the board joint developments are few. If the businesses are to split up then it makes sense to do it before parts of the group start mixing each other’s data seriously in new product development.
Growth has been elusive. With average growth in the mature businesses in the 2-3% range post-recession, earnings and market ratings have been subdued. The sole bright spot has been the rapid rise of Risk and Compliance, now with growth rates in the 15-18 % range. However, nothing Thomson Reuters were doing seemed likely to unlock rapid growth elsewhere.
Corporate attitudes tend to get entrenched around getting the numbers, and thus feeding the sales and operational management incentive schemes that are based upon them. While Jim Smith and his senior colleagues were clearly up for the challenge of digital in a data driven networked world, the ship they were piloting was sluggish and not particularly responsive to calls to go beyond satisfying the performance requirement. This is not to say that Thomson Reuters were not innovative. From Open Calais to Project BOLD they often set industry standards and showed real insight into the needs of their digital customers. But has this innovation reached deep into their operating divisions, and done so fast enough to engage their customers in a way that changes the nature of their work? For Thomson Reuters the answer must be, as for many of their peers “sometimes, not often, too slowly, and less often than start-ups less encumbered by history and performance expectations”.
The Woodbridge Trust is a family vehicle. No other siblings or their descendants work with Thomson Reuters other than David Thomson, as non-Executive Chairman and owner. The trust had expectations of growth and performance that were almost certainly not being met. It is easy to envisage the way in which this put pressure on the chairman and induced a radical change of direction. As indicated above, the Thomson family have never been wedded to particular businesses (minor exceptions would be Janes Defence Group, now part of IHS Markit, and Arden Shakespeare, now part of Bloomsbury). But these are exceptions to the Roy Thomson ethic of leaving the management (and the editors) to get on with the job – and selling out or firing them if the results did not meet the promised performance.
So the final word under this heading may be a reflection on what may have been the owners view. He could with justice say he tried a massive merger to change market positioning, he tried a completely new management team, and he kept faith with their successors for a decade. He still does not have a satisfactory market recognition of the huge investments made, or the growth and margin improvement promised, or the competitive edge on Bloomberg. Time to go.
WHAT NEXT?
Thomson Reuters Financial Services and Risk will now be a separate business, though Woodbridge remain minority investors. Yet it is hard to see the former group ideas around corporate solutions surviving the changes. Thomson Law and Tax is a major stand alone business and can easily survive on its own, though it will need to move even further downstream into the digital solutions market, beyond even the place where the PLC acquisition took it, to maintain its competitiveness in a market where data is vital, but workflow solutions that intelligently take the work out of legal analysis are now commonplace at private practice level.
Both of these two groups, the one that now goes its way and the one that remains, have huge data problems. Silos and the need to enhance and enrich data are widespread issues all over the place. In future however they may be working to a different rhythm. Matching Bloomberg with Schwarzman is an ego battle that intrigues the markets, but suggests a fairly interesting ride for managers. The normal PE cycle – 2-3 years of firm friendship followed by the end of fund race for the line at all costs to get the 6X result, or whatever target has been set, may never take place here. Instead we could be chariot racing from day 1!
Will Woodbridge sell Law and Tax? If the criteria are now purely financial and performance driven, that must be a possibility. Tax would be easiest, having better numbers and a historically closer link to tax practice management and computation services. Both have huge problems with very large headcount preparing and updating documentation. RELX is likely to be blocked from bidding but there would be plenty of interest. Timing is everything. Woodbridge Trust may be well on its way to developing a PE model of its own.
Data remains a key asset in both entities. And in both places there is the problem of “platform” (by which I mean here the neutral software – managed context in which previously siloed data is held, remixed and made available to applications, sales outlets and clients). Much major work in both places mixes client data, third party data and Thomson data to create workflow and service solutions. Sometimes this is on client platforms solely, sometimes the data is in several places, and often Thomson try to host the solution and make it replicable to other clients. These shared platform environments will be a hot topic, until common platform solutions emerge.
In Thomas Mann’s influential 1901 novel Buddenbrooks, the wealthy family of a German grain merchant move through four generations, from a high level of entrepreneurial creativity, to management and maintenance, and then on to a greater interest in culture and the arts, supported by historic wealth. The Thomson family have only reached three generations in the Buddenbrooks sense, so comparisons are impossible, but research economists often use the expression Buddenbrooks Cycle to describe some of the complex issues of family ownership across time. Maybe it was just time to part.