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!

Jun

3

Post-Modern B2B: Doing the Unthinkable

Filed Under B2B, Blog, Education, eLearning, healthcare, Industry Analysis, internet, Publishing, Reed Elsevier, STM, Uncategorized, Workflow | 3 Comments

Unthinkable is not too strong a word. The world in which I grew up in B2B is now over, and some weeks you live through a few days when everything you see and read hammers the message home. This has been one. I find huge encouragement in what I see the business and professional business markets doing – risking their lives to save their lives – yet I am still amazed, given the conservative resistance to change, that they are doing it at all.

So the tech stuff we can now take for granted. In my life in work we have gone from dial-up to fixed disc to IP network and now to mobile and still many people who call themselves “publishers” are doing fundamentally what they have always done, while reacting to change by altering the filters, adjusting the business models and hoping for the best. And what did I think would happen? Well, here are some of my expectations of Post-Modern B2B:

All through the early Internet years, whenever someone like me suggested to a roomful of publishers that the very fact that individuals were networked to each other would completely change the way in which information was used for communication in business or the professions, there was that funny little smirking smile, that faint twist of the lips, that suggested that the listener was humouring you, and you would soon get better. These were the years of “Well, just show me somewhere where it has worked” or “I see what you mean, but who is making money out of it?”. There were days when I wondered if I would live long enough to see a new world of communication and information unfold.

And then there are other weeks, and this is one, when I cry Hallelujah! Have your read your Outsell Insights this week, for example? Or looked at some of the key press releases? Outsell’s David Bousfield reports (https://clients.outsellinc.com/insights/?p=11489) on a new move by Elsevier to create geographical workflow. Its GeoFacets interface, designed as a solution for the research problems of geosciences researchers, enables them to map all of the data contained in Elsevier’s massive collection of scholarly publishing. But it would not be a solution if it did not also map into this context the commercial research created and held by completely different sorts of organizations. So it did the rational thing and struck a deal with IHS and Wood Mackenzie, leading sources of the commercial data, in order to invest in GeoFacets the one thing that is vital to solution -orientated users: completeness. David’s fascinating note reminds us that geophysical content, because of the overarching  presence of GIS systems, is a natural for this, but, for publishers, as Dr Johnson, would put it, this type of collaboration is as hard as a woman preaching or teaching a bear to dance. Since both of those are now totally commonplace I expect to see many more deals like this.

And so I went to a different screen and found another model at work. On 2 June, Wolters Kluwer Health and Pharma Solutions announced a deal with Decision Resources governing those customers who these two big players in pharma information have in common. They will effectively provide joint access to their pharma markets data which will allow both datasets – WK’s Source Data Analytics and Decision Resources’ Fingertip Formulary and Health Leaders InterStudy – to be integrated. Existing customers – and no doubt new ones seeking the cross-over deal – will be able to create their own solutions with a complete dat environment. Any bets on how long it takes to move best of breed client solutions into marketable products, or indeed how soon these players will want to be doing joint marketing? (http://www.news-medical.net/news/20110603/Decision-Resources-Wolters-Kluwer-Health-Pharma-create-TPA-process-for-mutual-customers.aspx).

Elsewhere in the Outsell oeuvre this week I found David Curle (https://clients.outsellinc.com/insights/?p=11499) in a state of shock. He had discovered that lawyers were spending less time on research than in years gone by. Having spent formative years building law databases I read his piece with mounting excitement. So lawyers too want answers, not research facilities. When the most conservative of our brethren begin to feel that they don’t want look up, but they do want the assurance that what they should have been aware of they have been notified about, then “solutioning” is about to break out full flood.

And, finally, let me end where I started the week. The Nature Education announcement on a new style of educational resource (I refuse to pander and call it an eTextbook) had a very distinguishing element. The removal of “product ownership” with its assumed rights of replication and lending, and the start of content rental. This is a hallmark of change, and indicates much about the downgrading of content per se and the arrival of solutions. The Principles of Biology is a solution. It will get you through your exams, so hire it now and we will keep in up to date for you (http://www.nature.com/nature_education/biology.html).

In each of these developments  this week I see the movement and re-creation of the B2B markets playing out. So please do not ask me who is making it work and whether they are making money. It is time to pack away the scepticism and embrace change – by living it.

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