A few years ago Wiley bought Atypon, the main hosting provider for their journals. That kind of made sense — owning the infrastructure that you run on. At the time it caused conniptions amongst other publishers who were hosted on Atypon (I was working at SAGE at the time. For a period of time there was a palpable fury in some quarters).
Roll forward a few more years and Wiley kept buying things (though I don’t have the exact list of acquisitions, or their order they include J/&J editorial, Magex, Knowledge Unlatched with it’s OA payment solution - Oable, EJP, and obviously Hindawi). That’s a lot of money to lay down, and for what? That’s been the big question in my mind for a few years now.
I heard one explanation — if you can’t be the publisher for all research articles, you can at least try and be involved in some aspect of the process for every article.That might make sense too, but it’s a very large spend on that bet.
Well last week at Frankfurt I got a chance to see how Wiley sees all of this is coming together. Wiley hosted a dinner to help announce their launch of Wiley Partner Solutions, a stand alone part of the company offering all of these services in a combined manner to customers.
This is a big bold bet by Wiley, and it comes with some opportunities, but equally some challenges. Overall I’m not sure that the services market is large enough to sustain significant growth, and this is a very different approach to an investment portfolio approach — where one is going to be willing to see up to 80% of your portfolio not providing any significant return. In the case of Wiley Partner Solutions they are going to need to bet that each component of the offering can help support an improved return on the investment. It’s certainly a strategically orthogonal bet for growth within the STEAM sector.
I’ll start with the main challenges, as I see them. I think there are two — the integration challenge, and the market size challenge.
The integration challenge
Of these two challenges, this is the one that is most under control of Wiley, but also the one that will feel the most painful initially from inside the company. Market growth pain will be felt by P&L owners and sales teams, but most of the rest of the teams will only be indirectly affected. In contrast, getting operations, data, and workflows to work together to provide, if not a seamless, at least a functioning, experience for customers, is going to touch every working across all of these products. If you just take billing and access control as two examples, each product has to have some kind of shared customer database, and invoicing is going to have to work across products too. Is this something where those aspects of the companies they bought get centralised, and how do they manage things like the data cleanup on customers, and . These are all very manageable issues, but equally they need some fairly opinionated leadership and change management to get them over the line, all while inhibiting product development.
The market size challenge
If you are an Elsevier or a SpringerNature you are probably going to create integrated solutions and systems for your own publishing and data activities. You are the main customer, and even then within your organisation you are going to have many different stakeholders pulling the requirements in different directions.
When you offer your platform up for a wider set of customers, if you can’t make your solutions scale as a platform in the way that AWS has (by providing explicit API driven interfaces that are effectively self service on behalf of the customer), then you are in a consultative sell mode where you are going to need to take on customisations on behalf of your customer base. As a potential customer of these offerings I want that, and I was interested in asking about that at the meeting. They are committed to offering at least certain levels of customisation. That’s great for increasing your opportunity of getting customers, but in our space it is also the aspect that has always made being a services provider a really tough challenge. Now you do that across a suite of services and there is a little bit of risk there. The bigger challenge though, is the question on whether the market is big enough? You make the market bigger by getting your price point down, but for that you need to reduce the complexity of your offering (I look to people like Scholastica and Janeway who are successful with this approach). So can Wiley get to a price point, given the integration and customisation challenges, that will allow them to take market share from other longer established vendors? I’m going to bet that they can get some growth, but that growth is going to be slower than they hope it will be.
OK, the challenges are real, but they are very comprehensible, and there are a lot of folk in the industry who have been on this merry-go-round plenty of times, so I don’t think their challenges represent existential risk. There might be a question about opportunity cost, and whether the same level of investment in some other strategy could yield better results, but you know, that’s a really hard exercise to run through in theory.
Challenges aside, there are some real opportunities. Three immediate ones that I can think of:
Cross selling your customer base
By buying in these different companies, you are buying new customers. You now have an opportunity to sell versions of your services to customers who are only buying some of what you have to offer. This however is only about increasing existing customer value, and is not nearly as important as acquiring new customers, so while it is a benefit, it’s not one that they should get too distracted by, in my opinion.
More data, more data analysis capacity
By making a large outlay for all of these services there is an opportunity to centralise data analysis around trend data, customer data, and applying various forms of analytics, on a customer, researcher, or content basis. Where such investment might be quite expensive on a company by company basis, you now can take some of the machine learning chops that you have bought within Atypon and apply it to other parts of your portfolio, at marginally low cost. I think there is a lot of opportunity here, especially if you can fold this back as part of the customer value proposition.
One thing that I’d not appreciated until I saw Jay Flynn speak was how this strategy can help you with standards implementation. In fact it didn’t really hit me clearly until a few days later. If you own infrastructure across the entire value creation journey, and you want to adopt a new integrated data standard, for example, you have control of implementation. You can also become a good partner to orgs that want to push standards forward, and you might even be able to shape those standards in ways that benefit your platforms (e.g. pushing for standards implementations that you know are easier for your to build into your systems, than other version of the same).
The OSTP memo is going to leave a lot of institutions in the US looking for partners who can provide soup to nuts solutions to help them on their journey to be compliant. Wiley now almost has the foundations of a compelling offer here.
So what do I expect to see?
There are three things that I am expecting to see.
First there are still gaps in what they cover. What is their solution going to be around preprints, and around data repositories (on data repositories I have a bias and I would say they should get behind and fund Dryad!!). What is their answer in the metrics and insights space? What is their answer for events? I would fully expect more acquisitions in these areas. It is highly likely that they will go for a buy, over build, solution.
Second, I would expect them to increase their participation in standard bodies.
Third, they are going to need to do a lot of selling, and the way we do that in our industry is often through taking a position of thought leadership, so lots more events and roundtables are arranged or run by Wiley.
It’s really exciting to see a company being bold with their strategy. I applaud Wiley for their bravery here. I believe them when they talk about wanting to create a healthy ecosystem. I believe that we are at the foothills of how platforms and infrastructure can benefit knowledge creation, and I hope this will push Wiley into being future thinking in this way, so overall I think there will be an ecosystem benefit that comes out of this.