Sometimes you go to a conference that just crackles with the excited atmosphere that surrounds the moment that has come. When Houlihan Lokey were putting together their conference on data and analytics, which took place last week, I can well imagine that there was a conversation that went “we need to attract 150 at least so let’s invite 350“. We have all done it. And then comes a day when almost 300 of the invitees turn up, it’s standing room only in front of the coffee urn, and the room pulsates with conversation, networking, and commentary. So it was at the Mandarin Oriental in London last Wednesday, and there were other virtues as well. Working in panels of corporate leaders and entrepreneurs, a short conference with short sessions had real insight to offer. There is a lesson there for all of us still indeed to put on 3 day events – short and intensive and double track does leave a worry that one might have missed something as well as an appetite for more. 

After a Keynote by Phil Snow, the CEO of FactSet, the conference resolved into four panels covering insurance, research and IP, risk and compliance, and lastly a group of founders talking about their companies. And while companies like FactSet now take a fully integrated view of the marriage of the content and technology with data and analytics, it is also clear that companies in the sectors covered straggle across the entire spectrum from a few APIs and data feeds, right through to advanced algorithmic experimentation and  prototyped machine learning applications. And everywhere we spoke about what AI might mean to the business. But no where did we define what exactly that might mean, or demonstrate very tangibly  real examples of it in action. And this for me strengthens a prejudice. It is one thing to look back on the algorithms that we have been using for five years and refer to them in publicity as a “AI -driven service”, but quite another thing to produce creative and decision-making systems  capable of acting autonomously and creatively. 

Yet the buzz of conversation in tearoom was all about people wanting to take advantage of the technology breakthroughs and data availability, and wanting to invest in opportunistic new enterprises. This is much better than the other way round, of course: many of us remember the  period after the “dot com bust” when the money dried up and investors only wanted to look at historic cash flows. But as the data and analytics revolution presses forward further, there have to be satisfying opportunities to create real returns in a measurable timespan. I do not think this will be a problem but I do think that we have to expect disappointments after the exaggerated wave of expectations around AI and machine learning. And from conferences like this it is becoming clearer and clearer that workflow will remain a key focus. Creating longer and longer strands of work process robotics and using intelligent technology to provide decision-making support and  then improved decision-making itself seems likely. While RPA (robotic process automation) is making real inroads into clerical process, it is not yet either having an impact on nontrivial decision-making, or upon the business of bringing wider ranges of knowledge to address decision s normally made by that most fallible of qualities, human judgement. 

Looking back, there was another element that did not surface at Wednesday‘s fascinating event. Feedback is what improves machines and makes the development track accelerate. But as we build more and more feedback loops into these knowledge systems we learn more and more about the behaviour of customers, and the gaps between how people actually behave and what they say (or we think) they want, grow larger. The “exhaust data” resulting from usage  does not get much of a mention on these occasions. But if, for example, we looked at the field of scholarly communications and the research and IP markets, I could at least make the argument that content consumption at some point in the future will be the prerogative of machines only. The idea of researchers reading research articles or journals will become bizarre. There will simply be too much content in any one  discipline. The most important thing will be for machines to read, digest, understand and map the knowledge base, allowing researchers to position their own work in terms of the workflow of the domain. And one other piece of  information will then become vitally important. The researcher will need feedback  to know who has downloaded  his own findings, how they were rated, and whether other scholars’  knowledge maps matched his own. Great contextual data drawn from a wider and wider range of sources is fuelling the revolution in data and analytics. Great analysis of feedback data coming off these new solutions will drive the direction of travel.

None of this lies at the door of Houlihan Lokey. By providing a place for a heterodox group of investors and entrepreneurs to mingle and talk they do us all a favour, and in the process demonstrate just how hot the data and analytics field is at the present moment.

There is an undesirable tendency amongst old consultants to want to write ‘Finis’ after everything, as if to say “after me, the Flood”. I try to resist, but there are mornings, and this is one, when the cycles of a lifetime stand out in particularly sharp contrast. Rehearsing the full cycle would be a bore. Suffice it to say that anyone who emerged from the content ownership valuations of the late 1960s into the Content is King subscription and advertising markets of the ‘70s and ‘80s, when valuations were built around ‘have to have, need to know’ content ownership, now knows they are living on another planet. 

Yet while things change, things remain the same. In the content days in M&A some of us used to talk about ‘happy families’ values, meaning that we sought to sell to a strong player the one content section that would complete his critical content field, secure his vertical market dominance and induce him to pay over the odds to get card into his hand. I spent many years hunting for ‘Mr Bun the Baker’, usually in the ‘80s to satisfy the whim of a Robert Maxwell or similar, convinced that if you owned all the right content the market would be forced to your door. 

But these are not content markets. That form of B2B publishing really disappeared in the Great Dotcom Bust of 2001-3. But we were too busy to notice at the time. We were like the RoadRunner, off the edge of the canyon but going so fast that we somehow maintained momentum. Yet each year the subscript sank and the advertising diminished and Wile E Coyote got closer, until there was only one way out – Re-invention! And then I read this in the inestimableOutsell News:

“IHS Markit and Informa announced the exchange of the majority of the IHS Markit Technology, Media and Telecoms (TMT) intelligence business for Informa’s Agribusiness Intelligence group. The agreement values the two exchanged businesses at equivalent EBITDA multiples, with Informa contributing an additional $30 million cash to IHS Markit to reflect the larger EBITDA contribution from the TMT business.”

So are we going back to Happy Families, or what? I have three certainties about B2B and a few hunches. I am certain that there are powerful businesses to be built in workflow, whether you call it Robotic Process Automation or smart decision making solutions. I know that this is no longer a content market but primarily a software driven market. I know that when people like me talked about the Age of Data we kidded people that data and content were somehow the same. In fact, data, from IoT and elsewhere, is omnipresent. Ownership may prove impossible. All and any usage of it compromises and commoditises it. You can never have enough. I also think that news and information in B2B will be important as video and sound feeds, that the current trends to strong industrial training software will continue, and that the information businesses of B2B is largely inside Events, and sadly few of those really exploit the data that their market touch creates. 

OK, so what were IHS Markit and Informa about? In a word or two, consolidating and deflating. UK observers are well used to seeing companies like Top Right selling off piecemeal and slowly subsiding like a saggy balloon, or Centaur Media sadly diminish. This is a little different. The justification for consolidation is market requirement and access. Both players continue to hope that they can concentrate in a less competitive space to find the software solutions users require in these sectors. Neither have approached the regeneration issues yet in the thorough going way demonstrated by Mark Kelsey at RBI over a decade or more. But consolidation reduces risk and can enhance short term returns. We must never forget that this is now a software market, driven by licensing and maintenance agreements. It seems unlikely ever to produce the revenue size or margins of the content market it has replaced, duopoly if not de facto monopoly will be needed to encourage and justify investment, and when we wake up next a comprehensive recon extraction of this information marketplace will have taken place.

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