The first time I encountered teachers and designers building serious gaming scenarios to help learners learn was in the late 1990s. “Gamification” according to its wiki, http://gamification.org, has been in the bloodstream since 2004. If it has taken Farmville and AngryBirds and X Box to awaken some people to the pervasive presence of game theory within all of our thinking about the way we learn, then they stand convicted of not living in the twenty first century. Gaming is now tightly wrapped around the way we learn: the problem is that we still do not do it consistently, in large enough contexts, to create ultimate learning value. People who call themselves publishers, information service solution providers, content developers etc still have the notion that the game is something you add to the mix to lighten the load, provide some variety, change the pace or overcome a tricky and boring learning essential. But what if gaming was the core to our learning, the methodological base for instruction and measurement. What if it was the package that replaced the training manual and accomplished its assessment as well as handled its updating? What if, as much biological evidence demonstrates, games are the way we learn and we are just now returning to a full recognition of what that means?

Sitting in an armchair in the City Lights bookstore in San Francisco one foggy day in June 2007 I opened a copy of Mackenzie Wark’s Gamer Theory, published that year as Version 2.0 of his blog GAM3Y 7H3ORY, a networked book hosted online by Bob Stein’s Institute for the Future of the Book. Here is a sample: “Here is the guiding principle of a future utopia, now long past: “To each according to his needs, from each according to his abilities”. In gamespace, what do we have? An atopia, a senseless, placeless realm where quite a different maxim rules: “From each according to his abilities – to each a rank and score? Needs no longer enter into it. Not even desire matters. Uncritical gamers do not win what they desire: they desire what they win. The score is the thing. The rest is agony.” (para 021).  Is this different to what you thought? Is it closer to passing that test, completing that continuous development assignment, getting those SATs, or satisfying all of those humiliating hurdles placed in the way of forward progress by those who have already progressed far enough forward not to be troubled by them any more. If you say “yes” to any of these questions then you are in danger of joining me on a dangerous road – towards a future for learning dominated by gaming.

But we are in good company. That hugely serious player, SAP, employs Mario Herger as its  Global Head of Gamification  (www.enterprize-gamification.com). MIT’s Learning Lab spawned Scratch (http://scratch.mit.edu/) to create and test learning games for younger people and Microsoft created Kodu (http://www.kodugamelab.com/), a programming environment designed to allow users to build their own games on the XBox. And in most countries there is now a serious gaming industry, often with 10 to 15 years of experience behind them, mostly making serious games for user organizations, and unvisited and unblest by the publishers who should be their natural collaborators. Centres of excellence here in the UK include inventive survivors like Desq (www.desq.co.uk), the Sheffield -based developer with almost 15 years of intensive work around immersive experiences like DoomEd or the SimScience environment built for the Institute of Physics. Or look at Pixelearning (www.pixelearning.com) in Birmingham and its training environments, or the company created by its founder, Kevin Corti (SoshiGames – http://www.soshigames.com/, exploiting customer retention through social gaming). Then, around London’s Old Street Silicon Roundabout, see how many of the 800 start-ups are games related, like Michael Acton Smith’s hugely successful MoshiMonsters (http://www.moshimonsters.com/). As a director of CreatureLabs many years ago I recognize the DNA! The games thing is on the march, but the content businesses old-style are not yet aligned with it.

So lets drop “gamification” if we are going to get into some social backlash. Really, games for learning are not like that lesson on Friday afternoon when the teacher showed a filmstrip (younger readers can insert film-loop, film, TV programme, slides, video etc according to age or taste) and we all slept or gazed out of the window. They are the very stuff of learning and the keywords which we shall associate with them are engagement, immersion, collaboration. They will have their problems, but as well as the future of learning they are also the future of assessment.

FOOTNOTE  While continuing to use this blog to record a view of information marketplaces and the players within them, I would also like to devote a regular item to looking at what I am increasingly calling the Post Digital Information World. This does not mean that I think that we shall renege at all on the digitalization of all forms of communication – just that once infrastructures are in place, and the majority of human society is connected to a networked society, it is conceivable that the next stages of development, while they are faster and even less supportive of current business models, will be different in type and style. The current debate about the future of email highlights this. More from me here later.

So when I heard his voice on the phone last week my first emotion was relief – that he had not simply given up and retired to Florida – and then agreement. Yes, we were 15 years too early. And many of the people we thought were primary customers, like the Yellow Page companies and the phone books and the industrial directories – are now either dead or dying, or in the trauma of complete technological makeover. Ross’s company, WAND Inc (www.wandinc.com) is now very widely acknowledged as a market leading player in horizontal and multi-lingual taxonomy and classification development. They are the player you go to if you have to classify content, if you are in a cross-over area between disciplines (he has a great case study around taxonomies for medical image libraries), and if you have real language problems (“make this search work just as effectively in Japanese and Spanish”). What they do is really simple.

Your taxonomy requirement is going to start with broad terms that define your content and its area of activity. These can then be narrowed and specified to give additional granularity in any specific field. These classifications can be incorporated into the WAND Preferred Term Code, given a number, and used in a programmatic, automated way to classify and mark up your content (www.datafacet.com). Preferred terms can be matched to synonyms, and the codes can be used to extend the process to very many different languages. So someone whose company, for example, was created in Spanish can be found in the same list as someone who has a Japanese outfit, as the result of a search made by a Chinese user working in Chinese.

And from synonyms we can extend the process  to extended terms themselves, and then map the WAND system to third party maps – think of UNSPSC, Harmonized Codes or NAICS, as well as those superficial and now dwindling Yellow Page classifications. WAND can isolate and list attributes for a term, and can then add brand information. All of these activities add value to commoditized data, and one would think that the newspaper industry at least would have been deep into this for 15 years. Yet few examples – Factiva is an honourable example – exist which demonstrate this.

Not the least interesting part of Ross’s account of the past few years was the interest now shown by major enterprize software and systems players in this field of activity. Reports from a variety of sources (IDC, Gartner) have high-lighted the time being wasted in  internal corporate search. Both Oracle and Microsoft have metadata initiatives relevant to this, and it still seems to me more likely that Big Software will see the point before the content industry itself. With major players like Thomson Reuters (Open Calais) deeply concerned about mark-up, there are signs that an awareness of the role of taxonomy is almost in place, but as the major enterprize systems players bump and grunt competitively with the major, but much smaller, information services and solutions players, I think this is going to be one of the competitive areas.

And there is a danger here. As we talk more and more about Big Data and analytics, we tend to forget that we cannot discard all sense of the component added value of our own information. We know that our content is becoming commoditized, but that is not improved by ignoring now conventional ways of adding value to it. We also know that the lower and more generalized species of metadata are becoming commoditized; look for instance at the recent Thomson Reuters agreement with the European Commission to widen the ability of its competitors to utilize its RICs equity listings codes. This type of thing means that, as with content, we shall be forced to increase the value we add through metadata in order to maintain our hold on the metadata – and content – which we own.

And, one day, the only thing worth owning – because it is the only thing people search and it produces most of the answers that people want – will be the metadata itself. When that sort of sophisticated metadata becomes plugged into commercial workflow and most discovery is machine to machine and not person to machine we shall have entered a new information age. Just let us not forget what people like Ross Leher did to get us there.

Now, lets pull back a step further and see how information services change networked industry and society at large. I only have space for two examples. The first was driven home to me on Monday at a dinner given by the Real Time Club. The speaker, Dr Siavash Mahdavi (http://en.wikipedia.org/wiki/Siavash_Haroun_Mahdavi), spoke on 3D printing, and by the time he had finished, and we had examined printed hip joints and shoe inserts amongst other examples the penny was beginning to drop for me. We are moving in the network from manufacturing by extrusion processes through moulds, the industrial revolution pre-digital world, to additive manufacturing, creating products in software and instructing printing devices to build them in extremely thin 2D layers one on top of the other until the desired shapes and structures are created. Medical implants have had the publicity here, but gold jewellery was mentioned as an application. This is a design – intensive, network efficient manufacturing world in which design and the actual printer can be in totally different places. Printing can take place using any materials which can be chemically – adapted to the process. Customization (the running shoe insert designed for the imprint and weight distribution of your own foot) and personalisation are at the centre of this. Every product can be made for you. However, it remains a requirement that everything we know about the performance, qualities and expectations of an artificial hip are brought to bear in the network upon the design process, as the information services world creates the bullets for manufacturing workflow to fire. And all this is going strong now: the lead engineering player in 3D printing in the UK is Renishaw (http://www.renishaw.com/en/additive-manufacturing-news–15505) (and with eery coincidence  it announced today a strong trading year, with sales up 11%).

If this is not bizarre enough, I stumbled upon a Google story this week about automated motoring. Apparently Google’s own patented technology had racked up 200,000 autonomous driverless miles by the end of last year. This may just be another Google enthusiasm which runs out of steam, but it does have a history (http://en.wikipedia.org/wiki/Autonomous_car), and a great deal of real research, and my bet is that it will happen in this over-crowded isle a lot quicker than the UK estimate of 2056. Extending the network to our over-populated motorways may be the only way to squeeze more capacity from infrastructure we do not have the space to rebuild, and to control scarce parking resource. Driving my car to the motorway and then surrendering control to a system that governs inter-car distance and speed until I leave is a likely first stage. And as the car becomes part of the network, then its ability to intelligently appraise where it is, where it is going and how it is feeling becomes a natural extension of a world of autos which are already computers on wheels. Information service solutions will be vital to feed this activity: important players like ITOWorld (www.itoworld.com) already assemble critical geospatial data, matched at the vital micro level by services like Elgin (http://www.elgin.gov.uk/) who can tell you about every road repair in Britain. At the moment this is part of the world of local government and planning: tomorrow it will have to be part of the knowledge base of your motor car.

When I think about examples like these I become more and more convinced that the new world of information service knowledge and intelligence will be more important than the old one, patrolled by intermediaries like librarians, and governed by quite irrelevant business models like advertising. And here is a world where the use shapes the content, and where suppliers are involved in developing solutions for sectors or even individual companies. Here the information services and solutions players have forgotten whether they are “content” or “software” players, because it has no bearing on the end result, and they had to have both elements to play in any case.

So who will do this stuff well? Undoubtedly the Indians and the Chinese and the Brazilians amongst others. But in many ways this future vision levels out a lot of the inequalities of the old and new worlds. You do not need a great deal of cheap labour to compete here. Capital too will have a different importance if you can custom manufacture close to the point of use, and avoid shipping and warehousing. I quite fancy the chances of this old island: good with design, strong start-up culture, great software development skills, good financial services investment culture, strong presence in information and education markets globally. Or at least I would, if our politicians did not think that modernity was returning to the railway investment mode of Britain in the 1840s, or aping the French and the Japanese high speed trains of the 1960s and 1970s. The infrastructure requirement here would be to create the most intensive high bandwidth broadband coverage in Europe. Fat chance of that while politicians think there are more votes to be got by shaving 34 minutes off the journey time from London to Birmingham!

Some of my friends call this type of article ”futuristic madness” (and that was the polite one!). But, to me, the real madness lies in taking the formats of the Gutenberg age (books, newspapers etc), carefully wrapping them in software and delivering them in facsimile form across the network – and then calling these eFormats Innovation!

So when I read the words “This is important not only for the supplementary data accompanying one’s experiment, but even negative results” I came alive immediately and read consciously what I had hitherto skipped. You see, in all the years that I have spoken with and interviewed researchers, when we get off the formal ground of OA or conventionally published articles, or the iniquities of publishers and the inadequacy of librarians, we get back to some stubborn issues that cling to the bottom of the bucket. One is what do you do with the remaining content derived from the research process which did not get into the article, where it was summarized and where conclusions were drawn from it. I mean the statistical findings, the raw computations. the observations and logs, the audio and video diaries, the discarded hypotheses etc. Vital stuff, if anyone is going to walk that way again. Even more vital is the detritus of failure: the experiment which never made a paper since it demonstrated what we already know, or where the model proved inadequate to demonstrate what we sought to show. Researchers going back to find why a generation of research went astray from a finding that proved fallible often need this content: in terms of detective fiction it is the cold case evidence. Yet more often than not it is not available.

So here is what I found in the nearly discarded press release. Nature Publishing’s Digital Science company (yes, them again!) have refinanced figshare (http://figshare.com) and yesterday they relaunched it. What does it do? It archives all the stuff I have been talking about, providing a Cloud environment with unlimited public public storage. They call it “a community-based open data platform for scientific research”. I call it a wonderful way of embedding research workflow into a researchable storage environment that eventually becomes a search magnet for researchers wanting to check the past for surprising correlations. At the moment it is just a utility, a safe place to put things. But if I just add a copy of the article itself then it becomes a record of a research process. Put hundreds of thousands of those together and then you have a Big Data playground. Use intelligent analytics and new insights can be derived, and science moves forward on the tessellate of previous experimentation – only quicker, with less effort and more productivity for the researcher. And much less is lost, including the evidence from the wrong turnings that turned out to be right turnings. (http://digital-science.com/press-releases/)

So will there be 20 of these? Well, there may be two, but if figshare gets an early lead perhaps there will only be one. After all , the reason  researchers would come to value this storage would be having their content in close proximity to others in their field. And while early progress is likely to run quick in Life Sciences, this application has relevance in every field of study. And it also calls into question ideas of what “publishing” actually is. By storing and making available these data, are figshare “publishing” them. They are certainly not editing or curating them. Network access alters many things and here, once again, it catches publishing on the hop. If traditional publishers confine themselves to making margins solely from the first appearance of an article then traditional publishing in this sector is in severe difficulty, whatever happens to the Open Access debate. Elsevier and Nature clearly get it: go upstream in value terms or drown in commoditized content where you are. But does anyone else see it? And why not?

Why is this in the least interest of the information industry? While Mr Cameron acted in order to prevent his coalition from breaking down and splits developing in his own party, his ostensible reason was to prevent the European Union passing laws disadvantageous to the city of London. Financial services are 10% of UK GDP. They must be protected as the key to success in Europe. Yet, as Lionel Barber, Editor of the Financial Times, notes in his editorial this morning, there is nothing to prevent the 26members of the Union who will now get together in tighter conclave on budget, tax and trading matters to pass laws which discriminate against City interests, as long as those laws do not infringe the current regulation of the greater community of which the UK is still a member. The Prime Minister is claiming victory: he should take care. Every British victory in Europe since 1815 has been followed by Britain losing the peace.

And have a care too in more domestic matters. The junior Business minister, David “Two Brains” Willetts, supported a leadership speech  on the importance of the British role in Big Pharma by undertaking to secure, despite lively public protests, the release of anonymized datasets covering diagnostic and prescription practice in the NHS, still the world’s largest health service. Yet he appears to forget that it is impossible to do this unilaterally. Not only are the major pharma players global titans, but providing UK-based players like GSK with information denied to their German or French rivals would be a state aid, or at least a restraint of trade, condemning UK government to the dock in the courtrooms of that very alliance whose powers they have recently been diminishing. And do these data and their availability do anything to promote employment in research labs in the UK? Nothing at all: we are missing the point about a networked economy if we think otherwise.

Elsewhere in the deeply paranoid British civil service, we continued last week in the hugely entertaining game of finding the pea under the information walnut shells. Having declared a Public Data Corporation to trade government-created content with the private sector, public consultations have led to real divisions about what this superstructure is meant to achieve. Local government and SOCITM, the public sector IT professionals, clearly read the intent rather than the effect of the proposals; This is an effort to frustrate the privatization of the UK Land Registry, Ordnance Survey and Met Office by regulatory obfuscation – and it is working splendidly well. Meanwhile, a near meaningless consultation on MiData – a government plan for re-regulating identity protection – has created a panel of private sector players, including Google and the real villains (energy utilities, high street banks) to give consumers more assurance  that their identity information is not being grossly misused. The government’s seriousness on this topic is underlined by the size of their budget of £10m ($15m)!

Finally, the week ended with the revelation that school examination boards regularly brief teachers, in seminars paid for by schools, on what the upcoming examination is likely to cover. This is apparently scandalous, as if the huge National Curriculum requirement could ever be fully examined without giving hundreds of question options in the exam  papers. What is the purpose of the examination if it is not to test what has been taught? As a result, several examiners have been suspended for cheating, several inquiries have been set in train, and the interesting idea flated that all the examination boards should be combined, and then privatized (since they would then be easier to regulate, fine, and would face regular contract renewal. Pearson already own one board. And ETS formerly held the SATS marking contract but lost it after an equally unilluminating controversy about performance. Change in outcomes then may not be a direct result of the causes of concern.

Apart from which little happened in information market politics last week. Back to innovation next week, with a sigh of relief.

“Particularly noteworthy was a talk by Professor Terri Attwood and Dr Steve Pettifer from the University of Manchester (how good to see a biochemistry informatician and a computer scientist sharing the same platform!). They spoke about Utopia Documents, a next generation document reader developed for the Biochemical Journal which identifies features in PDFs and semantically annotates them, seamlessly connecting documents to online data. All of a sudden we are emerging onto the semantic web stage with very practical and pragmatic demonstrations of the virtues of Linked Data. The message was very clear: go home and mark-up everything you have, for no one now knows what content will need to link to what in a web of increasing linkage universality and complexity. At the very least every one who considers themselves a publisher, and especially a science publisher, should read the review article by Attwood, Pettifer and their colleagues in Biochemical Journal (Calling International Rescue: Knowledge Lost in the Literature and information Landslide  http://www.biochemj.org/bj/424/0317/bj4240317.htm). Incidentally, they cite Amos Bairoch and his reflections on Annotation in Nature Precedings (http://precedings.nature.com/documents/3092/version/1) and this is hugely useful if you can generalize from the problems of biocuration to the chaos that each of us faces in our own domains.”

And the reference to Steve Pettifer recalled to mind my old friend Jan Velterop, once agent-provocateur in Springer’s thrust into OA (how grateful they should be to him now, given that his work drew them alongside BMC, and thus to real growth in this year of OA and eBooks compensating for negative trends elsewhere). Dr Pettifer advises Utopia Documents  (http://getutopia.com), who have been developing in parallel to Labiva and Mendeley in the workflow space for PDFs. Each is different, though they have common attributes. The fact that there are now three environments in this space is a strength for all of them. Isolated good ideas rarely work out. Constantly re-iterated solutions “invented” separately in several places shows a sector responding to the same calls from many customers – “Help me out of here – I am losing control!”.

Utopia Documents is also running a public trial on Elsevier’s SciVerse environment. This is critical, and prompts a question: if Nature and Elsevier see this, why doesn’t everyone else? And I think this may be in part because we have been confusing the workflow utility of PDF handling with the strange world of scientific networking. In one of the many frank and helpful comments made by Annette Thomas in the interview I referred to earlier this week, she remarked that much of what Nature had done to “create” networking between scientists had shown very modest results. She said that while scientists showed a modest appetite for networking via news and blog comments, she thought that Nature Networks did not succeed because they lacked the immediacy and involvement of workflow tools, and it was more likely that in this context real contact between self-formed interest groups would take place. Here she seems to be moving closer to the Mendeley (www.mendeley.com) position, but with a qualification. She clearly feels that you build the utilities first, and then see how interest groups develop their own dynamic using the shared information created by the toolset. Crowd-sourcing a la Mendeley is good, but self determination may be better.

Thinking about Portland Press and Jan Velterop also took me back to Jan’s company, Academic Concept Knowledge Ltd (AQnowledge – http://aqnowledge.tumblr.com). The semantic search environment created here is now embedded in Utopia Documents. But this is not what strikes me most emphatically about Jan’s work in recent years. Here is a hugely experienced academic research publisher who is not format bound and can think beyond the book, the journal, and even the article. Integrating antibodies-online.com, with its 300,000 antibodies and related products for concept matching shows that he and his team are creating a small player with an eye for data and for what research workflow really entails. By putting together all of the laboratory supply sources and the raft of descriptive material that they generate AQnowledge may be doing more for using article stores as a live element in workflow than any of their peers. Yet it has taken a company like BioRAFT  (www.bioraft.com) to push this home with compliance information, demonstrating once again that we are in the sectoral tools age of workflow, unable as yet to envisage the full desktop of tools and utilities, or the way they link together, or indeed the Electronic Lab Manual to which they in all probability lead.

Finally, STM now has major players – think of MarkLogic, TEMIS and SilverChair to name but three – quite capable of deploying the technology to drive towards the Big Data vision which I referenced in my previous piece. So, with all of this in the wings, why do the publishers still want to pursue the parochial and eschew the visionary?

Let me try to illustrate what I mean. The looming crisis in STM, in my warped view, is the data crisis. In every other sector it is rapidly becoming clear that increasingly sophisticated data mining and extraction techniques will come into play as users seek to extract new meaning from existing files, and further discovery as they cross search those files with currently unstructured content held elsewhere. STM, it seems to me, is peculiarly susceptible to this Big Data syndrome, for behind the proprietory content stores of perfectly preserved published research articles “owned” by publishers lies the terra incognito of research data and findings held in labs and on research networks. Future scholars will want to search everything together, and will be impatient with barriers which prevent this. Once the tools and utilities which comprise research workflow become generally available and the techniques and value of semantic searching locks into this, the urge becomes irresistible, and scholarly article data gets versioned, commoditized, “outed “. It does not really matter if it is located on the open web, the closed web, or in the cloud or in a university repository.

The implications of this are vast. Scholars want to be published by prestigious branded journals as a way of being noted: they also want to be searched in the bloodstream of science. They will make sure they are everywhere, and that their data is where it needs to be as well. The metadata may note that this article was Gold OA and that one was published by Science, but this may be of most interest to the filtering interface in the workflow environment, which uses the information to rank or value results. And there is a finding from 25 years ago which continues to haunt me in STM, which alleges that most searches are performed not to find claims or results, but to discover, check and compare experimental methodologies and techniques. In a world where regulation and compliance grew ever more powerful, this is unlikely to diminish.

So I have come to feel that Open Access (one participant asked me what market share it would eventually have, and was appalled when I said 15% – before it becomes wholly irrelevant) and Peer Review (increasingly all research validation exercises will be multi-metric, so even the traditional argument collapses) are more about the preservation of publishers than the future of scholarly communication. Not that I object to that preservation, but I really did sit up as Annette Thomas, in her interview, began to describe some of the game changing activity that Digital Science, child of Nature, is doing as an investor in a variety of workflow-enhancing technologies built by bench researchers for themselves (http://digital-science.com/products).

And in particular the announcement, made during the session, that Labtiva, a Digital Science investment at Harvard (sited in Dogpatch Labs) was launching ReadCube as an App (http://www.readCube.com). If anything bespeaks workflow then it is the App. And what does this one do? It allows researchers to order their current world of articles as a personal content library, free and Cloud-based, with features like a filing system for PDFs, fast download from a university or institutional login, the ability to save and re-read annotations, cite and create references and a personalised recommendation services. In other words, a smart App, worthy of the world of iPad, which solves the distressing everyday issues of finding what you once downloaded and recalling what you once thought about it, and finding more of the same. What could be more simple? But in simplicity like this there is a form of beauty. An App is definable as a workload tool which takes clumsy pieces of multi-stage routine out daily interactions with work – and makes sure you do not have to remember next time the cumbersome process you had to perform to do that.

So, whatever the introspective mood in the room, here is one publisher setting off on the migration to new values, determinedly seeking the pain points in the researchers’ working life and seeking to solve them. And indeed, other publishers (including Elsevier with their SciVerse and SciVal developments) are heading in the same direction. Yet the contrast between this and the generality of players in the sector is profound. At one point in the meeting I found myself in a discussion about what was going right with STM in a difficult marketplace dependent on government finance. Well, said one very knowledgeable source, we are doing a great deal with eBooks, selling them into places we never thought we would reach. Enhanced with video or audio? No, just reversioning of text. And library subscriptions are holding up really quite well, said another, and the market seems to have been able to absorb some limited price increases. And so I took away a picture of a sector holding its breath and hoping that things would revert to normal, and traditional business models would prevail. But we all knew in our hearts that when “normal” came back it would be different. Postponing the trek down the road to Dogpatch Labs only loses first mover advantage, the experience born of re-iteration, and ensures that it will be more difficult to change successfully in the long term.

In the big picture we can see the battalions of information services companies, having emerged from the publishing stage of their development, developing strategies around data – either as Big Data, mining and extraction players, or as workflow and process emulation players. These are all businesses driven by understanding how users work in a networked society, and they are all about the way in which content and software interact to create solutions for the bench researcher, the equities trading risk manager, the teacher and the learner, the patent attorney and his office, or the insurance risk assessor. And many others. And then, through longer workflows, solutioning at the job level begins to turn into solutioning at the industry level. Users, through shared APIs, create their own answers, and these become generalized and re-iterated by the information service vendors, and over time smaller competitors are excluded. This becomes a rich man’s game, and duopolies become the norm, as they already are in some verticals, and then duopolies give way to quasi-monopolies and invite regulatory attention (as they already are in some verticals). Competing with these giants is difficult and market entry based on re-originating workflow approaches built on the experience of countless users will be seen as difficult and pointless. So competition authorities will settle for price/margin controls and by restricting the number of verticals that one corporation can dominate.

While all this is going on the information service players of today are playing a three card game of risk. I hear this dialogue every day and it goes like this:

STAGE 1  “We now have good business in selling data into process – but the data is very commoditized and the value is in the software which holds it, searches it and provides the end-user access and workflow. We had that stuff written under contract because it was too risky to think of owning it or developing it in house – we have no experience of software or of managing it! And, looking at the contract we drew up with the supplier, we appear to own very little. So the time has come to invest in software, manage our own solutions and just hope that we can cope with the constant iteration of solutions. We will buy our supplier!”

STAGE 2 “This is more difficult than we thought. The innovation that we want is taking place outside of the range of the outfit we bought. If we are to continue to innovate in the face of rapidly developing user expectations (and that is the problem, not competition from our peers) we need to work with higher level suppliers in areas like semantic web, entity extraction etc. So lets do different deals: not sub-contracts and licensing this time, but Strategic Partnership, with exclusivities in certain areas and revenue and/or margin sharing. We will incentivize these people to greatness – but which one do we choose and what criteria do we use to select them?”

STAGE 3  “Well, the strategic relationships are working fine, but these software guys are eating our margins. And they say that all we have to do is update, while they have to re-invest, and 90% of the value in the package is software. And can they buy us? And their toolkit, honed on our clients to whom we did the selling, is now so valuable that IBM are trying to buy them …and maybe us as well. What do we do now, except grin all the way to the bank?”

There are three critical big picture issues that I take away from all of this:

* If the information services industry succeeds it will one day attract the attention of the major Enterprize software players. If this is so, we need to make our own luck and form relationships now. I see this taking place around Oracle in some sectors, and IBM in others.

* Most relationships between content houses and software houses begin with improvements to the data, content, internal workflow of the content player. But the content players end user/client is also vitally in need of systems for handling his content, and other third party content which he has already licensed, and in making it compatible with the workflow solution he is buying. There should be rich pickings here for both the content and the software players in terms of referrals and commissions. Somehow it isn’t happening, but if it did it would iron out some of the creases in those Strategic Alliances.

* Consultancy and customization are the keys to the solutioning marketplace. Trying to sell one-size fits all never quite does it in terms of repeat business. Yet most of the participants seem to dislike both of those elements, yet they are the best protection so far known to man for the defence of niche positions.

Next week, back to the coalface!

Lets go back to the beginning. Here are a couple of top of head examples of life on the planet that give a clue to what is worrying me:

* According to research quoted by the UK’s National Centre for Text Mining “fewer than 7.84% of scientific claims made in a full text article are reported in the abstract for that article”. This, they point out, makes cross-searching of articles using data mining and extraction techniques very important to science research. Fortunately the JISC organization which licences all journal article content from publishers on behalf of UK universities permits researchers to data mine these files, and no doubt this was agreed with the publishers within the license(?). But the question in my mind is this: who owns the product created by the data mining, and is this a new value which can be resold to someone else?

* Lexis Risk Management use many hundreds of public and private US data resources in their Big Data environment to profile people and companies. Both private and public data is researched, and, of course, it will often be the case that unique connections will be thrown up which encourage or discourage users from doing business with the data subject. Clearly Lexis own the result of the custom sweep of the data, and clearly it needs to be updated and amended over time as a result of fresh data becoming available, or more data being licensed into the mine. But do Lexis, or any other data extractor, own the result of the extraction process? They are able to sell a value derived from it, and that value emerges directly from the search activity and the weighting of the answers that they have accomplished. But do they own or need to own the content (which may be different in ten minutes time when another search is done on the same subject)? And can the insurance company who buys that result as part of their risk management model resell the data content itself to a third party?

I have put up two examples because I do not wish to polarize the argument into publishers v government. The issue arises in the UK, as the media lawyer’s lawyer, Laurie Kaye has pointed out, because the Hargreaves Review of copyright law recommends the retention of rights with the data miner – so you can make new products by recombining other people’s data. The UK government has adopted this recommendation with its usual emphatic “maybe”. Elsewhere in the world of August which I deserted to take a holiday, the UK government has come out with a storming approval of Open Data, and, as Shane O’Neill has repeatedly pointed out in his blogs, this contrasts sharply with the content retention policies pursued by UK civil servants, even now creating a Public Data Corporation in order to frustrate the political drive of its masters (how easily a licensing authority becomes a restricting body!).

There are two really troubling aspects of this to me. In the first instance we are not going to get the data revolution, the Berners Lee dream of linked data, the creation of hybrid workflow content modelling, or the Big Data promise of new product and service development unless there is a primary assumption in our society that all Open Web content, and all government or taxpayer funded content is available for data cross searching, unless there are national security considerations. And that it is a standard expectation for data leasing that discovery from multiple files creates new services for the person putting the intellectual effort into that discovery, and hopefully new wealth and employment in our society. If we simply continue to debate copyright as if it connotes the transfer of real world rights into the digital network then we shall constrain the major hope of intellectual property development this century.

And the second thing? Well, I am realist enough to know, after 20 years of lobbying this point, that it is unreasonable to expect the UK government to change its attitude to an information society in my lifetime. So maybe we can undermine these guardians of “my information is my power” by saying that we do not want their content – just the right to search it. After all if it is good enough for the universities and the progress of science, it should be good enough for Ordnance Survey and the Land Registry!

References

Making Open Data Real (www.data.gov.uk/opendataconsultation)

The Public Data Corporation (http://discuss.bis.gov.uk/pdc/)

Response to the Hargreaves Report (http://www.bis.gov.uk/assets/biscore/innovation/docs/g/11-1199-government-response-to-hargreaves-review)

National Centre for Text Mining (http://www.bis.gov.uk/assets/biscore/innovation/docs/g/11-1199-government-response-to-hargreaves-review)

Laurence Kaye (http://laurencekaye.typepad.com/)

Shane O’Neill (http://www.shaneoneill.co.uk/)

As a result we have two vessels now heading in opposite directions. McGraw Markets (everything which is not education), including all the B2B and credit rating assets, is in one, and everything education is in the other. But Pat English, a shareholder and CEO of Fiduciary Management Inc, told Reuters that this was only the start: “It doesn’t make sense to have S&P ratings, S&P indices, Capital IQ, Platts, and other companies under one roof”. So what happens in October? Do we see Chairman McGraw skip down the gangplank and set sail in the SS S&P, leaving the waste barge B2B to sink in the Hudson? Anything is possible of course: we are watching one of the largest corporate deconstructions in the sector since D&B sold all of their global subsidiaries to franchise holders.

And why? The answer is a not inconsequential $3 billion. This is the difference between the valuations expected for Markets and Education apart, compared to the current, or pre-announcement, values. Education is seen to be in the slow lane and holding back an advanced valuation of S&P. No one has ever explained cogently to me why companies, however large, cannot have valuations which reflect the intrinsic worth of their parts, and why “true” valuations cannot be exhibited without break out, but clearly I am in the nursery class in these matters. And my eye also caught the Chairman’s statement that $1 billion in overheads would be saved. That I really appreciate. I can see that the corporate office of a chairman, for example, would need less aides, fewer executive jets and less travel in a global $4.5 billion company than in a $6.5 billion global company, but since Chairman Terry is going to Markets, there will have to be another Chairman at Education, also aided and abetted and privately flying around a $2 billion company. So where does the saving come in?

And where does the future come in? The US education market is grossly over-published. Margins are too low to attract investment (hence this deal). The nation hovers on the brink of radical IT solutions to address a national standards deficit, present across the developed world, which can only be tackled through individualized digital learning: everything else has failed. McGraw Education have a decent record of innovation, good assessment assets like the California Bureau, and 20 years of struggle, from Primis onwards, to show in justification. But they sit on the edge of the same decreasingly relevant mountain of textbook assets that also contains Harcourt Houghton Mifflin. They have a junior position in non-US markets, compared with their major competitor. But no one can currently compete with Pearson. Cengage have learnt to go global and diversify. McGraw could go with Harcourt, but the resulting debt pile would be bigger than the Greek economy, so this is unlikely. Maybe the “we now have the message” boys at IBM, or Intel, or Cisco, will buy them. But why? There are some good assets in medical education (Harrisons) but are we looking here at a slow death from asset sales until only the unsaleable are left? Eventually Pearsons’ major competitor in global markets will be a borne digital platform company, but these assets will not help them substantively to reach that position. On the other hand, my telescope, scanning the horizon desperately for a rescue vessel, sees the sleek global liner HP, just refuelling on high octane Autonomy. Vast interests in education there, and the potential to be the platform player to fight Pearson?

Back at Markets there are problems of a different kind. Platts, aviation and construction all have heavy data capable of real impact in workflow orientated networking. Although serious attempts have been made to leverage this, there is no evidence of much stomach for the fight, some critical people left, and the failing magazine/advertising/subscription businesses are, well, still failing. Pity that the “very best thinking” of the management team, which the Chairman quoted as the reason for the split, was not applied here some years ago. Alongside these are really good, but unrelated, businesses like JD Powers. And then this high grade financial services stuff, with high growth Capital IQ and of course the S&P play most valuable of all. I am forced to repeat the question of Mr English in other words: unless these businesses are radically changed in strategic direction, this company looks as much like a portfolio conglomerate as ever its now deceased parent did. Will this management make those changes? Or will they sell the most marginal assets next year and use the cash to buy back more shares? And is this portfolio nature a real poison pill against a purchase by another mega corp? So eventual break-up is eventually inevitable?

More questions than answers, but as we all search for value on the ocean bed of this recession, there can be no doubt that this will become a common path for beleaguered corporates in years to come. Until, in fact markets recover and growth seriously returns.