In the shift beyond content licensing and towards supporting researcher workflow, Elsevier has few competitors. It has developed an impressive array of services and tools from project development and funding through data collection and analysis to assessing and showcasing. And uniquely, Elsevier can link these elements of scientific workflow with its unrivaled publishing program and its ScienceDirect, SSRN, and Digital Commons content platforms. The other companies that have keen interests in researcher workflow — Clarivate, Digital Science, and the not-for-profit Center for Open Science — each is impressive in its own right, but each also lacks a publishing program. Is this a strategic choice or a strategic limitation?
The absence of a publishing program may be a weakness for a workflow provider. After all, publishing currently includes the evaluation and certification stages of the research workflow, which are vital for peer and institutional recognition. On the other hand, some analysts might see their absence as a strength, since many expect profound changes to evaluation and certification in the near future. Moreover, if a publisher controls infrastructure and metrics by which science and its journals are assessed, it might pose a conflict of interest. For myself, although I see substantial risks to these combinations, I have come around to the idea that combining a publishing program, content platform, and scientific workflow, can constitute a major strategic bulwark for a publisher transitioning beyond licensed content products.
But, in assessing strengths and weaknesses, we need to be sure we are examining not only current corporate form but also possible mergers, acquisitions, and other kinds of ownership changes. Elsevier’s ownership is unambiguous — it is a part of a multinational publicly traded corporation. The Center for Open Science as a not-for-profit might combine with other not-for-profits but would have trouble integrating with a commercial publisher — although various kinds of strategic alliances should not be ruled out. Clarivate’s Scientific and Academic Research business, which includes Web of Science, Publons, and EndNote, was recently part of an acquisition by private equity firms Onex Corporation and Baring Private Equity Asia. We can certainly expect to see further changes to its ownership over the course of time. But it is Digital Science that I want to focus in on: Who owns Digital Science?
At the most basic level, the answer is entirely straightforward. Holtzbrinck owns Digital Science. This is not in dispute.
But Holtzbrinck also owns Springer Nature. Or, to be more precise, Holtzbrinck owns 53% of Springer Nature, with private equity firm BC Partners the minority owner.
Digital Science was part of the Nature Publishing Group prior to the latter’s merger with Springer. David Worlock has observed that Digital Science was “separated from Springer-Nature by the need to exclude their losses from the IPO, though presumably in line to be re-united whenever an IPO is concluded.” Although communications officers for Digital Science have pushed back at me privately that the two companies are not related at all, Digital Science itself claims to have “the wisdom of Springer Nature” which it describes as “also part of the Holtzbrinck family.” Springer Nature CEO Derk Haank has said publicly that he very much hopes to acquire Digital Science in connection with an IPO.
And last week, news broke that Springer Nature is preparing for a 2018 stock market listing, with an anticipated valuation of approximately €4 billion. This is good for the marketplace. It indicates that Springer Nature, the second largest scholarly publisher by many metrics and the largest open access publisher, is prepared to compete in the marketplace against rivals like Elsevier and Wiley.
An IPO also raises questions about what if anything will change for Springer Nature’s half-sibling Digital Science. Will Digital Science, as previously predicted, end up as a part of SpringerNature?
News about the planned IPO would seem to support this possibility. Reuters reported that Holtzbrinck may wish to retain control over the company following the IPO. To do so, it “could contribute other parts of its digital activities to the joint venture to avoid having to inject cash to stay above a 50 percent shareholding.” While it is not reported that Digital Science would be under consideration, it certainly makes good sense that it would.
Other publishers — and libraries and universities — that are working in collaboration with, or customers of, various Digital Science businesses might wish to give greater attention to the implications. First, Digital Science itself may soon become an operating unit of Springer Nature. Second, this could well yield changes to the Digital Science strategy, if its current model as an investor were to give way to the operating integrations that have been a hallmark of Elsevier’s strategy. Universities, libraries, and other publishers should have contingencies in place today that will position them appropriately should these developments occur.
Any kind of acquisition of Digital Science would leave Springer Nature and Elsevier with many of the pieces of a research workflow business in combination with publishing operations and platforms. There are a number of differences between the two workflow businesses and publishing operations, but the fundamentals would be that the two largest scientific publishers, and the two largest open access publishers, would also be the two largest scientific workflow providers. This would reinforce the emerging marketplace dynamics as one leading towards duopoly.
There is at least one difference that stands out between the tools and platforms that Elsevier and an expanded Springer Nature would offer: Springer Nature would be left with no citation index to match against Scopus. Unless, of course, Clarivate’s Web of Science were also in the mix. Given that BC Partners, a SpringerNature owner, was also interested in acquiring the business now known as Clarivate, perhaps this space is worth watching further.