Jun
30
Reach for the Sky
Filed Under B2B, Blog, Financial services, Industry Analysis, internet, mobile content, news media, Publishing, Reed Elsevier, Workflow | Leave a Comment
Ye Gods! This industry is changing so fast that it is almost impossible to leave the keyboard unattended for a moment. No sooner had I entered a plea in mitigation for the survival of the Guardian than I saw that Ascend (http://www.ascendworldwide.com/), a company that I have been following closely for many years, had been bought by Reed Elsevier, and that the SBB Group had been bought by McGraw-Hill. What is this? Strategic purchasing in B2B? Has the world turned upside down (or back up in the direction it was before 2007)?
No, my friends, there is no madness here, or if there is it lies only in the multiples paid. What we are seeing is a continuation of the trend we saw with Thomson Reuters: refocus on broad verticals, buy data, go for the workflow, forsake advertising, consolidate to the point of duopoly and seek lock-in through adding value in essential process requirements for end users. Result of success: increased productivity, enhanced decision making and better and less costly compliance.
So lets look at our two acquisitions. Neither is huge, but Ascend would be much the largest. This company was formerly the database built by an aircraft industry loss adjuster, and Lloyds Development Capital saw the opportunity to prize them apart and create, under a very effective new management team led by Gehan Talwatte (D&B, Hoovers) an industry database service for the commercial aircraft lease-hire market. Still sound a bit specialized? Well, over 90% of aircraft in the skies are leased, and due diligence demands that the market has the ability to know the flying life of every part in every plane in order to establish valuations. Ascend data feeds the workflow of pricing and term decisions around those transactions, and Gehan and his team have been tireless in creating ways, through technology interfaces and, of course, the release of APIs, to ease their content into the core workflow of a very valuable market within the aircraft industry. (Note for future use – the collection of data in the first instance was for a different purpose than the eventually successful implementation. This is very often the case, but usually ignored by managers who argue that markets for this or that dataset are too narrow to exploit. They are almost invariably wrong).
So then Reed bought this asset for RBI. This in itself deserves comment. Having sold Cahners and removed itself effectively (construction is the great exception) from US B2B, Reed Elsevier are left with the more successful UK and mainland Europe B2B assets. There, for many years, they have been concentrating on a few vertical markets and have closed or digitalized much of their advertising dependent output. In data services with transactional workflow implications, their ICIS service (http://www.icis.com/home/default.aspx) in industrial chemicals pricing is a world leader. And other fields of vertical specialization include property (EGI remains the beacon for “community”, organizing an interactive grouping of property developers, vendors, real estate agents, lawyers and surveyors long before community was a key word in the information industry lexicon).They are also the UK’s leading commercial jobs mart (TotalJobs) and have a big share in the horizontal market for employment law compliance (XpertHR), and it must be supposed that one day these areas too will recover. Finally, they put all the data derived from extensive holdings in the aircraft industry magazine world into FlightGlobal (www.flightglobal.com). Now that unit has a sharp edge, a raft of data for potential re-use and a real workflow integration exemplar, since it has Ascend. The execution is everything, but this is a smart buy for Mark Kelsey, Jim Muttram and their team.
And a just-in-time purchase as well. If this one had gone to IHS (Janes) or to McGraw- Hill then the balance of power in the aviation and avionics vertical would have begun to change.There may only be room for two of these three. The decision to buy is remarkable since most analysts are still working on a scenario where Reed Elsevier exits RBI completely, and some believe that this applies to Reed Expo as well. In the absence of white smoke from Trafalgar Square, it is hard to tell, but clearly an argument that Reed had to make this purchase in a very competitive strategics market has prevailed, and it could be that alongside it an argument for reducing the number of verticals but intensifying the growth by acquisition is also being accepted.
Certainly these events have impacts for McGraw-Hill. How many verticals can they be in? SBB Group is a UK start-up of 2001 in the steel pricing and analytics business. It has indexation ( www.thesteelindex.com) and pricing analysis, and sells both to producers/wholesalers/stockholders and to commodity analysts and traders. It thus supports the thrust at Platts, so long pre-eminent in oil and petrochemicals (but now having to suffer the indignity of seeing smaller upstarts like Argus Media nibble away at some of its prime positions) Other McGraw verticals also want to get to this workflow /embedded service concept. McGraw Construction Network was a good start in moving F W Dodge and Sweets away from look-up and into workflow (maybe a way of stopping current lawsuits would be to merge this with Reed’s isolated US construction efforts – now that would be the workflow of the industry!) McGraw’s major interests in aviation and avionics will undoubtedly feel the loss of Ascend. As indicated above, Reed have just evened up a three way struggle in this vertical.
So lets watch for more examples of this type as B2B changes its nature, turns into data and workflow, and the players who want to stay in the game in big verticals have to consolidate in order to become one of the 2-3 core services in the sector. And lets keep pondering on the nature of workflow, a world where all the information required to make a decision has to be gathered in one place and you can only usually deploy one solution at one time. As well as consolidation, I see data sharing and service collaboration where one powerful player decides with another to allow X to do the industry job, while Y concentrates on the financial markets and analysts. Except that the financial services players are playing in that latter workflow (Bloomberg v Reuters in carbon pricing is the classic). Going to be very competitive, these markets!
May
20
Publishing as it Will Be
Filed Under B2B, Blog, eBook, Education, eLearning, Financial services, Industry Analysis, internet, mobile content, news media, Publishing, social media, STM, Thomson, Uncategorized, Workflow | Leave a Comment
A wise man said that “Content without Technology is lame; Technology without Content is Blind”. Einstein was working his way towards this conclusion, but it was in fact Timo Hannay of Macmillan/Digital Science who came out with this formulation during this week’s ePublishing Innovations Forum at the IET in London (http://www.epublishing-forum.com/). Incisive Media, who also do the Online conference and exhibition at Olympia in December, having been doing this Spring meeting for four years, and I have been their privileged chairman for each. So I know the sea change of the past half decade, I know that change just gets quicker, and I know that Timo is fundamentally right and is one of only a handful who are doing something about it. I also see that “publishing”, if it is useful to retain the term, is almost redefined everytime we hold this meeting, and that the players making strides in solutioning (ugly term), collaboration and community seem to be mining the seams that have revenues and margins embedded in them.
The conference contained several beautifully worked case studies. Take Timo as an example. His themes are about knowledge discovery, research management and software tools (http://www.digital-science.com/). The ability today to read chemical names and turn them into chemical structures and use them to cross search literature and patent databases is a beautiful expression of what we mean when we say that we have to produce solutions that reduce costs and increase productivity. Tomorrow we will want to take this, and his ability to track and map research patterns and structures, and his investments in experiment and project management systems and roll them into career duration, compliance required Electronic Lab Manuals (ELN). Then a few of us will sit down over a beer and reflect that Elsevier sold the ELN market leader, MDL, almost a decade ago. The circularity of markets is only a wonder to those who have been swept full circle several times!
Then lets take David Craig, who came to the microphone to announce that his Thomson Reuters GRC (Governance, Risk and Compliance) division (http://accelus.thomsonreuters.com/) had the day previously finalized the acquisition of World-Check (said on the New York grapevine to be a $530m dollar deal), and was now pushing hard towards the content integration and software services needed to flesh out the complete solutioning picture around regulatory compliance in all its phases. He too speaks the language of collaboration, and now appears to prefer the term “community” to “workflow”. And the distinction is interesting and not an idle one. He does not want to build content-injected process models for the individual corporate units that severally and separately do compliance. He wants to do corporate engines that unite functions to get results, so that he is not tied to the future fortunes of compliance officers or finance departments or auditors or corporate counsel or tax advisers, but provides structures in which they all participate, share content and create outcomes. And if that argues for a different culture in the fully networked corporation, he also sees content creation and sharing between corporates, professionals and othe participants (especially regulators) which allows risk information to be shared rapidly in the network. Again, the high ground is becoming a universal solution which is so widely plugged in that unplugging threatens the health of the participants themselves.
And then take Donal Smith. The CEO of Data Explorers (http://www.dataexplorers.com/) defined what happens to this type of process in the completely satisfying niche. He showed us how certain types of unregulated content must be collected and analysed to keep markets safe from themselves. In this case the content concerns contracts to “borrow” equity against future equity movements – the activity known as “shorting”. Markets must know what proportion of a company’s equity is already committed, so Data Explorers is a venture of necessity, using user-generated content to create indices which allow markets to work efficiently. Its operating principles are ubiquity and non-exclusivity. Process? Collaboration? Its all here.
I could go on. I loved the energy in the education sector, with Cambridge University Press and Global Grid for Learning using similar models in the workload of teachers, and Microsoft, in the guise of David Langridge, their education partnerships director, coming from the other to position the new Office 365 as the vehicle for content integration in schools. And I am aware that by stopping here I ignore many excellent presentations that followed parallel themes. We did interviews and panels which enabled participants to see these trends at work. We looked at the future of the newspaper with Julian Sambles of the Telegraph and the future of the eBook with Tim Cooper of Harlequin (Mills and Boon). Adriana Lukas, coming from the user side as an advisor to major players like Johnson and Johnson, caused a run on the bar by exploring the powerful virtues of five widely used ad-blockers during the opening of her examination of social media as marketing. Elsewhere we discussed the importance of metadata and even paradata (could be my new word!) and finally Geoff Metzger of Superdu brought us down to earth by revealing marketing technology in a box – how to create instant web presence (without waiting for the IT department) to promote books and services. Back to earth, and back to books, in a voyage that began with Kate Worlock, for Outsell, defining the global marketplace, its growth, strengths and weaknesses and some of these key trends. I can now tell you how it feels to introduce one’s own daughter as a keynote speaker (Wonderful!!).
And so much more that I must apologize to those who I have omitted. I wandered away from the IET (Institute of Engineering and Technology, appropriately enough) no longer wondering why they changed their name from Institute of Electrical Engineers. Its the technology, stupid. And now we cannot do without it.
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