Are we seeing the emergence here of a new truth? Or just an old lie tarted up? The sale of BvD ( Bureau van Dijk) by EQT to Moody’s for $3 billion is either a great celebration of the need for data in a data analytics business ( aka IBM Watson and Trueven Analytics in the Healthcare sector, or Verisk and Wood Mackenzie in energy ) or the need to persuade wary initial users that the analytics they are getting are backed by the familiar brands of the research databases on which they were formerly reliant . And if it is the latter then large database companies would be well advised to sell their data to emerging analytics companies now , because sometime soon users are going to discover that data searched on the Open Web now is often equal in value and sometimes throws up startling new insights when compared with the hoarded and highly curated stuff we have been relying on for years . But it is the stuff from the research databases that has the total credibility

Think of it this way . BvD have been building databases since the early 1980s . As the Belgian member of my board in the Eropean Information Providers Association , Marcel van Dijk was openly sceptical about the future for research databases , a sideshow in his computer bureau business , and a hobby of his colleague , the luminary Professor Bernard van Ommeslaghe. The latter built a business that was bigger than the Bureau at Marcel’s retirement , and started the chain of wealth enhancement that led through Candover and Charterhouse and ended with EQT , in successive deals that have grown from $600m to $3billion over a ten year period . And has BvD grown commensurately with that value ? Well , it is a highly profitable $280m company well plugged into corporate research , especially around credit , risk , compliance , M&A , and that great money earner of our generation , transfer pricing .By the time we entered the age of Compliance the company was already in PE hands and getting expensive , but much of its data was available from public sources and its much vaunted private company data was as good as private company data can be – patchy , and increasingly easy to research , and in markets where you really wanted to know (China) fiercely defended by someone more powerful ( People’s Bank of China ) .

So they did the right and obvious thing to do . While van Ommeslaghe tuned the search engine a decade or so earlier as his response , they now went for the “new wave ” and started an analytics based solutions business , launched in each of their sectors and branded “Catalyst” . I have never seen the figures though I have constantly asked market analysts who know everything about one of the most intensively researched companies in its sector and they change the subject . No mention of this was made in the sale release either , where analytics was concentrated around the ability of the Moody Analytics division to transform BvD . I draw my own , possibly erroneous , conclusion: not for the first time internal re-invention failed to convert a successful team to a new sales pitch and a new business model .

Which would be a good point at which to sell , especially if Moodys Analytics division is as hot to trot as its press releases suggest . And do not forget that these are critical days for the rating agencies . While performance at Moody , S&P and Fitch has returned to pre-recession levels – almost- there are still critical regulatory issues and continuing disquiet about the role the se agencies played , or didn’t play , in that crisis . And for the first time for years there are competitive threats : governments and regulators wonder if there is a better way , while start-ups like Credit Benchmark in the banking sector suggest that aggregating the research and decisions made by all banks can produce valid choices and rating decisions for individual players . In short , we are now removed from the glory days when this market was a “license to print money ” and we are back to the struggle for survival . Will Analtyics be the Get out of Jail card?

Let’s then go back to Marcel and Bernard and the risk decision they made in in or around 1985 . Suppose Marcel says ” Look , are you sure that there will ever be enough librarians and information managers to justify renting them space on our computers ? The IBM PC means that our outsourced bureau service running payrolls and utilities business is in decline but we are competitive , we know how to sell and we can still hold our own “. And Bernard responds ” No , the new business is just like the old one , except we are storing content for the individual use of the endusers of our clients , the business model ( then ) is the same – time based access – all we need to do is learn how to sell access ” . Life is not perfect – as it turned out there was not enough bandwidth in 1980s phone lines , so they ended up succeeding on CD ROM . But there were enough intermediary users . Today cost conscious employers want to cut out the intermediary librarians and deliver solutions directly into the workflow of the ultimate user . Do Moody Analytics , or any of us for that matter , yet know enough about pricing , selling or distributing these solutions . The gap between the decisions made in the 1980s and the decisions that need to be made now is much greater . It is no good retaining the Marcel belief that somehow the good old business will just go on , but that investors and customers will only appreciate the “Change ” badge on your lapel if you spend a very great deal of money on it ( and how did they come by that valuation ….. !)The purchase of BvD takes Moody’s revenues over the billion mark and adds to its margins , so it ticks some analysts boxes , but the horse that lived in the BvD stable has long since bolted , and it is hard to believe that a new incumbent is ready to graze that data – or find some better stuff in the open pastures of the internet

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