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?

Is it the day before the marriage for Digital Science?
After George Baxter, The Day before Marriage, Yale Center for British Art, Paul Mellon Collection

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. 

Roger C. Schonfeld

Roger C. Schonfeld

Roger C. Schonfeld is director of Ithaka S+R’s Library and Scholarly Communication program. He leads a team of methodological experts and analysts that provides strategic consulting, surveys, and other research projects, for academic libraries, scholarly publishers and intermediaries, museums, and learned societies. Previously, Roger was a research associate at The Andrew W. Mellon Foundation.

View All Posts by Roger C. Schonfeld

Discussion

9 Thoughts on "Who Owns Digital Science?"

This strikes me as a useful perspective on current developments. If you are right in predicting that the major publishers in the science and technology fields are moving towards a stance (forward-looking) of supporting research workflows in which open access will surely play a major (dominant) role, there is an interesting set of questions then about the role of libraries and institutional initiatives in this largely globalised set of solutions. I am also asking myself questions about the implications for educational publishers (for example in regard to Exploratory Resources you discuss here https://scholarlykitchen.sspnet.org/2017/07/18/new-content-type-exploratory-resource/ )… For a publisher such as Wiley where the textbook market may be as important as the STM periodicals market, there is a tricky bifurcation likely in their platform requirements. Is the bottle fully open or half-closed?

You are raising what is an absolutely essential question. The research workflow actually has a number of separable components to it: a bench science workflow, a clinical science workflow, perhaps also a field science workflow and an empirical social science workflow. Not to mention the arts and humanities. And, as you point out, the educational/instructional components. The platform implications of serving all these users, with content that may play a role in several of them, and metrics that ultimately must add up to institutional assessments, are only just beginning to emerge.

This analysis seems to me substantially right . Much depends on one current unknown – debt levels within Springer Nature at point of IPO. If these are as high as some analysts believe , then it will need a good valuation of Digital Science to restore the Holtzbrinck overall control when if is acquired,
But I also have a point of difference . As Clarivate proceed with the redevelopment of Web of Science in an altmetrics world , the importance of keeping assessment and evaluation clear of publishing will become more and more obvious . It is not clear that pre-publication peer review managed by a publisher is as important as post publication review and monitoring over time , while risk assessment and compliance are ever more demanding in terms of pre- funding review , especially where taxpayer funds are concerned . My bet? If Clarivate can recreate Web of Science successfully then the eventual sale will be to a consortium of funders led by Gates.

But the point remains – we now have full service publishers – Elsevier, Springer-Nature- and we have the rest . Further consolidation must surely come soon , as the market speculation around Wiley and T&F this year indicates

I fully agree with you about the risks of keeping assessment and evaluation separate from some of the other interests in what you call “full-service publishing” (wonderful category!). I’ve characterized these as a “conflict of interest,” and I have been surprised how little pick-up there has been on this issue among scientists, librarians, and Elsevier competitors. https://www.insidehighered.com/news/2016/12/14/exploring-citescore-elseviers-new-journal-impact-metrics

Regarding the “conflict of interest”, the “inside higher ed” article you cite includes a reference to Bergstrom’s analysis of the “interesting” (not to say more) biases of CiteScore. It also reminds me of the attempt by Robert Maxwell to take over the Science Citation Index and JCR from Garfield by suing him for copyright infringement. I mention this episode of publishing history in my “Internet of the Mind” written for the 15th anniversary of BOAI15, where I also give a source from Garfield himself. What is more difficult to interpret is why are some publishers like Elsevier ready to face up to intimations of conflict of interest? Do they feel they can stand beyond it, or is the competition so harsh that the risk must be faced? “Fascinating”, as Mr. Spock would say.

Interesting article. I have followed Springer for many years and worked with them long before Bertelsmann acquired them in 1999. Bertelsmann owned Springer until 2003 when they sold the publisher to Cinven and Candover two equity firms that had great hopes for a public offering. Unfortunately the world markets were in a meltdown few years and Cinven and Candover had to settle for second best option and pulled out all the possible cash from Springer and sold a heavy leveraged company on to another two venture companies at a near fire sale price. Those two firms nursed Springer back to a stable condition and sold it to BC Partners in 2013 for 4.4B. Just to show you were Springer fits into the world, BC Partners also bought PetSmart for $8.7 B in 2014. Now BC Partners convinced Holtzbrinck to merge with Springer in 2015 and that in a short they would be able to take the combined companies public which would significantly raise the value of both companies. Apparently that plan is on its way. As for Digital Science, the company was one of several startups founded by Annette Thomas, one of the smartest individuals that I have ever meet in publishing. She founded Digital Science in 2010 while running Nature and it is still wholly owned by Holtzbrinck. Holtzbrinck owns literally dozen of companies in publishing and related areas. They are a cash rich company with little reason to sell Digital Science. However after a public offering Springer Nature will have access to cash and will be able to buy any number of companies. I expect to see Web of Science as well as a number of other publishing companies and related services in play after a successful IPO.

Roger, thank you for a very insightful forward looking piece as well as providing us with the correct historical context of previous statements and news. There has always been a prevailing opinion of the academic institution’s decision makers being very concerned about providing 1 – 3 publishers with a majority of their funds for a host of subscriptions, products and services. If your crystal ball comes through there will be 2 -3 billion dollar enterprises controlling a majority of the subscriptions, products and services. I wonder how the market (customers, researchers, competitors, etc.,) will respond to this new world order? How will this affect the output of scholarly research? Will the metrics and retractions improve? How will the grant funding agencies respond to this new dynamic?

As the digital economy in scholarly publishing continues on its evolution (I would say that we are currently in the stone ages) we are going to see some mind blowing big data analytics services. Will these new entrants stay independent or will they be gobbled up by the PAC Man 3? I guess we will have to stay tuned and watch each episode as it develops. I wish this story could be downloaded and streamed like NetFlix but this is the scholarly publishing industry and it moves at a snail’s pace.

The questions you are raising are so apt. There are strong and visionary leaders at Clarivate, the Center for Open Science, and Meta/CZI, among others, and plenty of capital to enable developments there or perhaps from unexpected quarters. As we have seen in other sectors, a turn towards more centralized control can invite new ideas and investments. The trendline of the moment may seem to point towards this direction of duopoly, but certainly I rule nothing out!

Leave a Comment