Jun
20
How Do You Grow STM?
Filed Under Big Data, Blog, data analytics, eBook, eLearning, healthcare, Industry Analysis, internet, Publishing, semantic web, STM, Uncategorized, Workflow | 2 Comments
Two events this week turn us back towards this perennial question. One is the purchase of Springer by BC Partners after a prolonged affair and a lover’s tiff which forced the price up a notch to $4.4 billion, but left 10% of the equity in the hands of the sellers. The other is the latest set of results from Wiley, covering the fourth quarter and thus the complete picture in 2013. While Wiley is the larger company, by virtue of its major presence in education markets, the two are very comparable in size terms in the science, technology and medical sectors. Both have STM units of plus or minus a billion dollars, and both have STM market shares of around 3% each. And they have another shared characteristic: neither of them is showing much by way of organic topline growth, and there are some very good reasons for this. Global recession and library budget cuts do not suggest growth, and nor do the consequent falls in book and journal purchasing. But both companies have gone digital to the extent that print declines are largely offset by eBook and eJournal supply, though often at lower revenues (and greater margin). This again does not indicate growth, but confirms a view of settled publishing environments in fairly stable markets with high margins: the impression that they like to give, and which analysts and investors like to believe. But underneath the surface, I believe that these markets are now boiling over with activity, and that both of these companies, and all of their peers, now face challenging growth targets if they are to deliver to private equity investors and shareholders real growth in returns in recovering economies, as well as investing in retooling for a digital data age.
In the first instance, digital transition from print is now over. Nothing more marks the point than the news this month that Elsevier the sector leader in journals, is to outsource its eJournal transaction completion to Atypon. This then is just a cost, and each player will seek opportunities to drive it as low as possible. Journal articles are getting commoditized and will be universally available before long, so this is not a growth area. Wiley’s growth in its Research sector – its new name for STM, was -1% in FY13. It is hard to imagine that Springer was more than low single digit, and indeed it is possible that the industry average is less than 2%. Given current constraints on price increases (between 5 and 9 % across the sector) and it is easy to imagine that we are suffering a market contraction. Yet private equity investors cannot do financial restructuring all the time and shareholders expect dividend growth as markets come back. So what are the growth strategies which will deliver that?
It seems to me that there are two current hopes for sustainable long term growth. Neither will be new to these two companies, since in a number of ways both of them are experimenting here. Both involve investment, but in both cases the investments will lead directly to productivity gains, and to the possibility of very rapid new product development. Neither is a long stretch beyond the current managerial capacity of these players, since both have strong and capable technology strength. The key question is whether they are flexible enough in managerial terms to embrace a future beyond the formats and business models on which they were reared and upon which they have grown comfortable in historical times. The two directions both rely upon the data they already hold, and data which they can obtain by alliance and joint venturing with third parties. They can be described as the development of workflow tools for the processes of research on the one hand, and the building of analytical tools and datasets/knowledge stores for researchers on the other. In order to play here the publishers will need a data platform which allows the cross-filing and searching of content-as-data, and ways of developing search in this context on both structured and unstructured files. They will be pushing the envelope on metadata development, imposing text enrichment disciplines to increase the value of their content, building extensive triples stores, and using their expertise as a draw for researchers to deposit experimental/evidential data with them, as well as publishing their articles. And, having decided their niches, they will be collaborating with other publisher data-holders, sourcing Open Data deposits and turning themselves into a part of the research value chain itself. When peer review gives way to PPPR (post-publication peer review) their grip on the “barrier to publication” cycle, in which the publisher-managed peer review is necessary for the researcher to enter the market, will be broken anyway.
So what will these new products and services look like? Well, both of these players already know something about that. Springer has successfully re-platformed on the widely-used MarkLogic system, which creates a completely different data-handling opportunity and is widely used in the sector. And Springer has form in the researcher workflow market through its recent purchase of Papers, the Dutch article production software (Mekentosj BV). Likewise, Wiley have made real strides in developing knowledge stores in support of their chemistry browser project and in response to the strength of their chemistry list (as noted here already). But these instances are swallows, not summer. There has to consistent and sustained development to create batteries of data services in chosen sectors, and the data enrichment must be widespread, not experimental. The workflow tools will include some acquisitions, but will reflect a great deal of home grown learning as many publishers discover, for the first time, what the eventual user (not the library intermediary) does for a living – and how he can be helped and supported by data-charged service modules which will become as essential to his view of research as, well, journals once were. The real issue, then, is not technology: it is the mindset to forge a new business out of the old, with end-users, not buyers, and with data, not pre-formatted reporting, at its core. It sounds like a choice, but it isn’t really. Growth in real terms is the key to survival. It is time to start thinking again about how we satisfy markets, and investors.
May
22
Education: Ignore the Tablets, Eat the Box!
Filed Under Blog, eBook, Education, eLearning, internet, mobile content, Publishing, social media, Uncategorized, Workflow | Leave a Comment
Yesterday may have seen the largest single step forward for school-based educational publishing globally for a decade, which makes it confusing, but rather appropriate, that the word “education” did not intrude at all in the hullabaloo of the major product/service launch on the West Coast. Yet I suspect that if we convened a panel of enlightened educationalists from all sorts of international K-12 environments and asked them what they needed in order to deliver a vision of tomorrow’s educational technology then they might put together a shopping list something like this:
* Video, video, video – from the internet, terrestrial and satellite, and DVD/Blu-ray, all in one place, seamlessly
* Games – serious gaming in a context that makes sense to kids in and out of the classroom, capable of collaborative or single user working anywhere
* Connectivity, making the learner a real participant in the process as well as ensuring that all online and broadcast environments were linked into this hub
* Voice and gesture control, and the ability to profile and remember individual participants
* Multiscreen and split screen working, using video and internet at the same time
* Skype connections to remote teachers or wider collaborative groups
* Each user to have the computing power of a top range laptop at their disposal, backed by a network of 300,000 servers – the computing power of 1991 in one application
These are, of course, the headlines from yesterday’s launch of Microsoft’s Xbox One (http://www.wired.co.uk/news/archive/2013-05/21/new-xbox-console). And I do not care about the numbering system, or whether we get Halo or Call of Duty: Ghosts. Or that some platforms are more backward-compatible than others. Frankly, my son had passed me by as a gamer by the time he was seven, and was making allowances for my mental and physical inability to keep up. But Convergence – that is something else. In the long years while we lurched from one technology to another – from CD-ROM to the iPad – all of our efforts seemed one – dimensional. Which is not to say that the iPad is not a useful tool in an educational context. But dilute the Apple Kool-Aid, please. Whatever Steve Job’s lifelong wishes were about creating a new start in education, nothing that has happened since Apple made its specific education launch convinces me that it is the textbook of the future. Or, as far as el-hi education is concerned, that it is desirable or appropriate to look for an eTextbook of the future. “Textbook” may be an albatross that we have to cut loose from the neck of education 7-18, and especially 11-18, if we are going to make meaningful progress at all.
If education at these ages is going to enter the immersive world of the network, then it has to be rooted in the multiservice environment of the home, as well as the school. Indeed, looking at the expensive and pitiful struggle in the UK to keep the actual physical buildings of the school together I wonder sometimes about how we will keep these locations open for more than one-on-one progress checking and assessment. As K-12 becomes more virtual, here are some of the issues we must look out for:
* the continuing progress towards personalised education, driven through specified learning journeys which are loaded with appropriate learning outcomes. Education is Workflow.
* the ability to monitor in the network the compliance of these outcomes with overall curriculum requirements demanded by education authorities, politicians, parents
* the ability to monitor and assess learner progress on the fly and tweak the system to allow repeat/re-iteration on topics where a full understanding has not been achieved
* the ability of teachers to morph into moderators, enabling them to select and suggest good learning strategies for individual learners, adopt best practice from successful peers and recognize, with the assistance of good monitoring and guidance solutions, where progress is made and when help is needed
* the ability to use this system architecture to keep parents informed of progress and problems, using the same systems for communication and dialogue as those in place in the home. Education is social media.
In this world there will be no examinations, since we shall know who knows what at which required level. In this world, every parent, every night, will be able to know what has been done and how well it has been accomplished. In this world, education will return to being the exploratory journey towards understanding that it has been at its most successful. And while it will take a long time for this world to come about, I think that the only road to the future is not the route of adding more and better devices at the edge of education, but by taking a holistic view through the only available architecture – the games platform.
All of this begs many interesting questions. Will Sony come up with a better answer in the new PlayStation? Perhaps. Will Nintendo make the Wii move here as its gesture control gets refined? Maybe. Of more concern to me is that now that games have come out of the bedroom and into the living room, and are now bidding to be the multiscreen service that runs television and streaming DVD in the home as the Home Hub, it will not be long before they emerge in the school as well. And this time teachers will not be able to say “leave your devices at the door”. OK, Microsoft may have to rebrand and call it XBox Ed. And make it available through its smartphone technology. But maybe, just maybe, yesterday was a new dawn. As EM Forster could not have resisted saying at this point: “Only Kinect”.
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