Apr

7

Data Licensing: Who Owns the Customer?

Filed Under B2B, Big Data, Blog, data analytics, Financial services, Industry Analysis, internet, Publishing, Reed Elsevier, Search, semantic web, Thomson, Uncategorized, Workflow | Leave a Comment

Three years ago industry commentators in B2B began what has become a parrot-cry – “Look at the workflow!” – and I admit to being more guilty than most. All of a sudden we were looking at compelling applications where publishers/information providers/content companies were discovering that they had data which really did facilitate decision-making or in other ways enable corporate workflows to function more productively, more effectively, cheaper – and quicker. And so, from payroll to procurement, from risk management to assured compliance, we have seen a wonderful rash of data-rich applications, with more to come as machine learning and AI sharpens the cutting edge of what we can do, and the formula subtly alters from “data as content injected into workflow adds value to workflow systems software” to “workflow systems software selects and licenses third party data as content to support software-driven solutions”.

Time to take stock? I think so. I still see liens who will always believe that their content is a more valuable part of the mix than anyone’s system software. I work with B2B players who passionately believe that they should be fully integrated as users of software and content, and who produce a good deal of software themselves, but I work with very few companies who combine long workflow systems software – the sort that goes from the beginning of a process to the end – with having all of the data content needed to fuel the system and satisfy all of the decision point needs on the way. I recall with great pleasure the IP Manager system built by Thomson Reuters IP (now Clarivate Analytics) to support pharma patent lawyers in managing the workflow of new patent activity, where the huge resources of the company fired up the decision process on claims and infringement. And then, at Lexis Nexis Risk, the purchase of ChoicePoint in a company that built its own Hadoop-derived database systems gave opportunities to roll out decision-making systems for US domestic insurers, using its own data with federal and state data readily available under public licensing schemes.

But you notice that these examples are both very large enterprises and a few years old. Today I find fewer dramatic examples of people doing both, and more and more examples of the systems software and the data coming together independently. I had this in mind when looking at the deal which Thomson Reuters and SAP announced two weeks ago. This is undoubtedly a great deal for both parties, since using the Thomson Reuters World Check database to put some real teeth into the SAP Business Partner Screening service employs the market leading data source of PEPs and other folks we mustn’t trade with into the filtering systems of one of the enterprise software majors. I am sure that the royalties will be a high margin delight, and the customers very happy, but those customers are SAP customers, I presume. And Thomson Reuters here are driving one whole element of the SAP service business, So who “owns” the end customer – SAP because the service can only be used by a SAP licensed user? Or do Thomson Reuters have an implicit “ownership” – once SAP’s clients are into this service it will be very hard to change data source , especially in an instance where there is no better one available. But SAP’s client is still only indirectly Thomson Reuters customer, and would only become one if Thomson Reuters decided to build a service that emulated the SAP workflow, or the SAP client decided to go back to using a less sophisticated Thomson – driven enquiry service.

And then my worries were exacerbated by a really interesting conversation with Aravo Solutions (Aravo.com). I would describe this company as a “lurker” – a seventeen year old start-up only now coming into its own time. Being so far in front of the game usually results in extinction, but in this case it has produced an exciting player writing custom and modular workflow software and applying it mostly in fintech markets. And at every stage licensing in best of breed content to supply its functionalities with content from which solutions can be derived. In light of this its licensing partners are unsurprising: amongst them are Accuity (RBI), Dow Jones, D&B, Kompany, Lexis Nexis, Arachnys and Thomson Reuters. Powerful and valuable companies all, but none of them owning the end-user relationship with Aravo’s clients, who include GE, Unilever etc etc.

I would not argue for a moment that you cannot run a rapid growth, high margin business on data licensing. And look at the rapidly failing B2B magazine markets, once the heartland of the sector. They owned the customer, in that they had a direct subscription relationship with him, but they did not have a relationship with him, they did not know he was changing his nature until it was too late, and they continued to send formatted print and online products to him long after the point of relevance was lost. My point simply is that if your new business model is based on being a third party in a licensing relationship, how do you know what is working and what is not? Is your ability to innovate this limited by your software partners understanding of what is happening. And as the complexity of Big Data subject to AI and machine learning grows greater can your partners control your margins as well while you still have to re-invest in more data enrichment to keep your place in the market?

Being the data content partner is not a bed of licensing roses. Things are changing really fast now. Some bigger players can migrate to full service offerings. Others will buy Aravo’s peers and seek niche dominance. But for very many smaller B2B players who have firmly implanted themselves as data suppliers a very uncomfortable situation is developing. They may not be able to own customer relationships or data access pricing. The new position is called Powerlessness.

Apr

5

STM : Rebirth of a Marketplace

Filed Under Big Data, Blog, data analytics, healthcare, Publishing, Reed Elsevier, social media, STM, Thomson, Uncategorized, Workflow | Leave a Comment

” Next Week in Harrogate ” . Sounds like a new wave movie or a British attempt at Scandi Noir crime fiction ? In fact it is the annual meeting of the UK Serials Group , guardians of the lamp of scientific journals publishing , as users and producers ,in this country . This is a segment of what was once called ” the cash cow ” that supported mighty publishing brands from Bertelsmann ( former owners of Springer ) to Wiley , from Thomson ( former owners of Chapman and Hall et al) to Informa ( Taylor and Francis ) , and , pre-eminently , the great Reed Elsevier organization as well as a host of institutions and societies , Royal and otherwise . Many a tear has been shed at the graveside of this industry already , not least in this column , so it is not my purpose to repeat all that – but simply to mark a moment , last week , which we will recall as a landmark , and which should be in the front of our minds on the road North to Yorkshire’s neoclassical city of the moors .

I have boringly prophesied the arrival of the Gates Foundation as a publisher so many times during the Open Access years that I was about to do so again semi-automatically when speaking in the opening Plenary next Monday . But then , gentle reader , it Happened! It was not hard to predict : there was always going to be a point when the cost of publishing Open Access articles in terms of APCs ( author fees ) would grow to a point where it was cheaper for larger funding bodies to do it for themselves . I am a little surprized that we are there already , but since , reportedly , Gates will be using the F1000 publishing mechanism already used by Wellcome , it may have seemed opportune to move quicker and before the cost of Open Access in terms of fees breached the billion dollar point widely seen as the signal for mass change .

But I remain fascinated that it was not , as we were all assured for a decade that it would be , Open Access of itself that did the damage . I see this as part of a wider drive to self-publishing , with post-publication peer review becoming ever easier and reputational judgement gathering in post-publication performance amongst the range of altmetrics that now become hugely influential in creating opinion around the value of research . And as publication in a timely manner outweighed waiting to appear in print within a discipline or domain branded vehicle , and discoverability made online anywhere as visible as a publisher’s database , the pressure to get it out and get it noticed outweighs most other urges , and sharpens the point of people investing in pre-print servers .

And I am sure there will be an aftermarket . And some journals have a long life to go , even if they become re-publishers ( Our Editorial Pick …the best of XYZ in 2017 etc) . But I wonder if the article itself , in its present form , is not the next point of rapid change . In other industries it has proved most constructive to concentrate in digital terms on the workflow , and it is noteworthy that very many publishers , commercial and otherwise , have spent a huge amount in providing ” self-publish to this platform ” software , whereas it might have been just as loyalty-productive , even if not fitting the publisher cost-reduction model , to invite researchers to join their community and then publish anywhere – which is of course exactly what Academia and ResearchGate will do as they develop as publishers . The bottom line here is simple . There is no barrier to entry any longer provided by the technical processes of publishing or by the former necessity for peer review . And the business of organizing content for consumption by librarians and researchers becomes increasingly problematical .

So we turn back to that researcher workflow and ask again how we can support the research process – and we find howling gaps in the provision of services . I have always admired the attitude of Kudos on sticking to the knitting of researcher existence – driven always by winning research grants and gaining or maintaining tenure . And I rejoiced in their latest survey , released this week ( https://blog.growkudos.com )which shows that while most researchers respect and acknowledge the importance of copyright , over 60% admitted that they put their stuff on social networks and give it away in defiance of any publisher copyright instructions . What , give it away in the hope of it coming to the notice of a new research team or the faculty I want to join despite my publishers instructions ? Unbelievable !

In the list at the front of this note you will have seen that many great corporations in publishing are “former ” owners of STM assets . This will speed up as the market gets more difficult and the pressures of users grow . How much longer , for example , will the great subscription services like ScienceDirect and Springer Link be able to lurk on the dark web , demanding subscriber only access , and not conforming to common principles of access for licensed data-mining ? Publishers can and do raise value – a good example this week was Karger’s agreement with UNSILO to add value though machine learning and AI to specific biomedical services .Yet these service improvements are like a rising tide , and the next generation of researchers readily assume that this is the norm for content presentation .

So the Journal will go and the Article will change , but a wonderful marketplace still remains for those willing to discover how researchers work , and and how to save them time and cost and improve their productivity . Digital Science and its peers are already deeply into this , but I still see areas that are relatively unsupported . When playing a role in bringing BioRATH to Digital Science some years ago , I spent time researching regulatory compliance in science research . Now many of the industries I looked at have moved beyond compliance – to competency . Not just to are these scientists storing the chemicals correctly and properly feeding the lab animals – but to does this team have the right components , the qualifications , the experience , the leadership , to accomplish its goals . While scientific researching funding is not diminishing globally , our expectations of results and our need to test there foundations has developed enormously . Is competancy the next reputation ? Interested in any of this ? See you in Harrogate !

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