Today’s news that Silverchair is buying ScholarOne from Clarivate shows that deal-making is alive and well in the scholarly publishing infrastructure sector. Late last week, I was able to speak with Will Schweitzer of Silverchair, as well as Bar Veinstein, Oren Beit-Arie, and Amy Bourke-Waite of Clarivate. In this transaction, Clarivate sheds an asset in a segment that is too small and messy for it, providing a golden opportunity for Silverchair to scale up. The transaction realigns an important infrastructure category in a way that allows each company to focus on its strengths.

ScholarOne logo

Enterprise publishing systems

Manuscript submission and peer review management is not the sleepy category that an unfamiliar observer might imagine. It’s at the forefront of publisher efforts to transform the author experience in an open access environment while addressing the publisher imperative to screen out problematic submissions that threaten research integrity. It has also grown to incorporate conference management, both traditional conferences and in some cases virtual/hybrid conferences. 

The publishing lifecycle starts with this category of manuscript submission and ends with online availability (ie the infrastructure category of hosting/distribution). Several of the large commercial publishers, including Elsevier, Springer Nature, and Wiley, have acquired or built their own services across these categories. Elsevier built its own online distribution platform and acquired Aries for manuscript submission; Springer Nature built its own online distribution platform and is in the process of transitioning to its own manuscript submission system; and Wiley bought Atypon for online distribution and has purchased several manuscript submission services. When the publishers have acquired these platforms externally, they continue to market them to third party publishers, but otherwise tend to focus their efforts internally. Ultimately they are continuing to build out the elements of the enterprise software stack to ensure they can competitively differentiate themselves. Technology strategy and spending is one of the drivers of scale in the publishing sector. 

For this reason, publisher infrastructure is essential to the competitive health of the publishing market. As my colleagues and I recently wrote with respect to enterprise publishing systems, publishers’ “goal is decidedly not to sustain individual infrastructure providers but rather to ensure that they have access to needed infrastructure, a pointed distinction. The key factor for them is to ensure that market forces are adequate to enable a disruptive innovator to compete. Unfortunately, today there is some concern that such market forces are not working all that effectively, and some publishing organizations feel at least somewhat trapped by existing providers.

There is also an independent and start-up scene in publisher infrastructure. For example, Morressier has moved from conference management into this manuscript submission, with research integrity as a critical hook. SPIE provides the hosting platform that BioOne utilizes. And, in both these categories, there have been efforts to build open or community source solutions, for example OJS which has a substantial install base outside society and commercial publishing. 

ScholarOne

Put another way: Outside of ScholarOne and the Silverchair platform, there are few publisher-grade workflow and infrastructure options that are not controlled by a major commercial publisher. 

In this case, the transaction is for a set of products that use the ScholarOne brand, including Manuscripts and Conferences, as well as some portions of what was Publons. The employees directly responsible for these products will join Silverchair. The transaction has been finalized but has not yet closed. 

Schweitzer believes that ScholarOne is a strong product with its fundamentals intact. He described it to me as “a scaled highly performant software platform. No publisher will complain about uptime, throughput, or system responsiveness.” At the same time, he acknowledges that there “are long wishlists and publisher frustrations with parts of the product.” 

Clarivate strategy

Few close observers will be surprised to learn that Clarivate has decided to sell ScholarOne, given a perception that investments have not kept pace with demands. Clarivate might have purchased SilverChair and joined it with ScholarOne as part of a publisher-neutral workflow strategy, but in the relevant timeframe it was not an option for Clarivate. At a corporate level, Clarivate has been “deleveraging,” as described in recent earnings calls. Selling ScholarOne, rather than buying Silverchair, continues that pattern by releasing capital that can be used for core purposes. 

At the same time, Clarivate has had, as an absolutely core skillset, the development of enterprise workflow infrastructure for libraries (through its Ex Libris library software business). So it unquestionably possesses the technology product skills to develop and manage such infrastructure for publishers. 

So why sell? This transaction illustrates that Clarivate under its new leadership is aligning as a provider of services to academic and government institutions and not to publishers. There are several reasons for this. 

First, Veinstein explained to me that, from the Clarivate perspective, the market for publishing infrastructure just isn’t very big. At a corporate level, Clarivate is now moving to deploy capital for acquisitions and organic growth. Inside of the A&G business unit, Beit-Arie tells me that “Our ability to add value in the research office and provost office space is much greater than what we can do with publishers.” Clarivate has determined not to be in the business of selling workflow infrastructure to publishers, although it will continue to sell data to publishers. 

Perhaps more importantly, though, Clarivate has a tricky position relative to publishers. Because of its Web of Science business, which is absolutely core, Clarivate has found itself patrolling the boundaries of what counts as the scholarly record. To do this work, it needs to partner closely with publishers, and it also needs to be positioned to challenge them. In this respect, Veinstein speaks with pride about the independence and thoughtfulness of the Web of Science editorial team. Still, it must be complicated to operate publishing enterprise software when key major publishers have gotten into this business as well, and therefore Clarivate finds itself competing with its partners. In this respect, Beit-Arie suggested that Clarivate’s businesses will be “cleaner” as a result of this sale. For that matter, it is notable that Clarivate chose to sell not to one publisher — it is possible to imagine several that might have been interested in purchasing ScholarOne and others that might have felt a resulting competitive threat — but to another non-publisher company, which is perhaps the “cleanest” transaction of all. 

Silverchair opportunity 

Two years ago, I wrote about the purchase of Silverchair by Thompson Street, the private equity firm. The promise was that Silverchair would have an opportunity to stay independent, presumably by scaling up, rather than the most obvious alternative, which was to be purchased through a strategic acquisition by a major publishing house (or Clarivate, for that matter) Today, with capital from Thompson Street, Silverchair is in a position to bulk up through its first major acquisition of another company. It will roughly double Silverchair’s scale.

ScholarOne is a complementary product serving the same market as the Silverchair platform. And while this market for publisher enterprise software is too small for Clarivate, it is bread and butter for Silverchair. We can expect to see an increasingly integrated offering, leveraging among other things opportunities to share data across the entire portfolio in ways that benefit publishers. 

ScholarOne only handles some of the content types that are distributed through the Silverchair platform. It will be interesting to see if there is a movement to offer workflow solutions for other content types, i.e. reference and textbooks. 

This transaction seems to show Silverchair doubling down on its enterprise software vision, with a focus on individual sites and separate services for discrete journals and publishers. I have previously offered some critiques of this architecture both for manuscript submission and peer review and for content hosting, discovery, and access. Indeed, I shared this point of view on a recent Silverchair panel raising the question for publishers, “What’s your strategy if there is no platform?” This transaction seems to suggest that Silverchair is confident in its fundamental vision and will continue pursuing it. 

Schweitzer shared with me some of the plans for ensuring customer continuity while driving integration and modernization. Josh Dahl will be SVP and GM for ScholarOne within Silverchair. Market facing functions such as sales, account management, and marketing will be integrated so they can interact with publishers as one unified team. That includes adopting Silverchair product practices such as its transparent roadmap — which Schweitzer emphasized to me several times as one of its key strengths. 

There are significant synergies on market facing functions, but there are also some important caveats. Hosting is a service that is selected by the publishing business, but editorial management is often fragmented, certainly at the larger publishers, because of the role that societies and more independent journals can play in selecting their own solutions, not just adopting those of the parent publisher. This category is perhaps the stickiest enterprise software in the publishing sector. 

In terms of the technology product, as noted above, Schweitzer acknowledged that there is more to be done to modernize the underlying platform and meet publisher needs. He expects to be able to “accelerate the pace of that modernization.” At a high level, the Silverchair platform and ScholarOne are built in different languages and use different cloud stacks, so there will be some limitations in the extent of integration that might be possible, at least in the medium term. 

Looking Ahead

Neither party is prepared to disclose the sales price nor the revenue impact at this point, but we can expect that news to come out in Clarivate’s next earnings call. Beit-Arie told me: “This is not a fire sale. This is exactly the opposite, it’s a thoughtful strategic deal.” The strategic logic for both parties is absolutely clear. 

Other parties are impacted by this transaction as well. ScholarOne competes most directly with Elsevier’s Aries Editorial Manager. Clarivate departs from a direct competition with Elsevier in this segment. It will be interesting to see how this rearrangement affects the Clarivate-Elsevier competition going forward. 

Ultimately, many ScholarOne customers will likely be relieved that this part of their infrastructure stack remains independent and publisher focused. Still, we may look beyond the current chapter to consider the broader narrative arc. How much further can Silverchair hope to grow and what combination of organic and inorganic investments will be required? And, what is its long-term ownership structure — will it eventually be purchased by a larger company for strategic purposes or will it reach sufficient scale to be able to go public?

Roger C. Schonfeld

Roger C. Schonfeld

Roger C. Schonfeld is the vice president of organizational strategy for ITHAKA and of Ithaka S+R’s libraries, scholarly communication, and museums program. Roger leads a team of subject matter and methodological experts and analysts who conduct research and provide advisory services to drive evidence-based innovation and leadership among libraries, publishers, and museums to foster research, learning, and preservation. He serves as a Board Member for the Center for Research Libraries. Previously, Roger was a research associate at The Andrew W. Mellon Foundation.

Discussion

8 Thoughts on "Silverchair Buys ScholarOne from Clarivate"

This should be received as great news by S1 customers, its support team now moving to Silverchair and the finance group at Clarivate. It’s never pleasant or productive to operate a smaller business unit within a “deleveraging” environment. Having brought S1 into the (then) Thomson Corp’s A&G business many years ago, we were able to fund its ongoing platform development, at least until the entire IP & Science business (under Thomson Reuters) was managed in this same manner, culminating in its auction sale to to Onex. Best wishes to Josh and the leadership group at Silverchair with this complementary resource.

The big question will be what is Silverchair (owned by private equity) going to do with all of that end-to-end data? Publishers check your contracts!

Steve, Silverchair’s position is that our publishers own their content and data, and that the relationship with the end-user is theirs, not ours. We agree with you on the implied value of the data from submission and hosting platforms. Our job is to help publishers derive insights from their data or to otherwise help them make it actionable.

At the risk of being too self-serving, and with my conflict of interest well out in front, I feel the need to point that this analysis’ brief mention of PKP’s Open Journal Systems (OJS) does not do it justice. OJS is used by over 45,000 journals around the world and it was recently selected to form the basis for the European Commission’s Open Research Europe publishing platform (to replace F1000).

That OJS has not been as adopted by the largest commercial publishers is more a reflection of their limited capacity to work with open source solutions than it is of OJS’s enterprise readiness.

I think that what you write and what I write (“And, in both these categories, there have been efforts to build open or community source solutions, for example OJS which has a substantial install base outside society and commercial publishing.”) are completely consistent. I wonder if the largest commercial publishers agree that they have “limited capacity to work with open source solutions” as compared with smaller enterprises. Perhaps they can weigh in on this directly themselves. Regardless, what you’ve built and achieved is impressive for several critical segments in publishing.

One of S1’s nicer features is the integration of the Publons/Web of Science database into editors’ reviewer search. Finding reviewers is one of the hardest and most frustrating parts of managing peer review. Access to these databases, matched to the manuscript in hand, is very powerful and helpful.

I would be surprised if continued access to Publons is part of the deal. Hopefully Clarivate doesn’t price it such that Silverchair can’t afford to keep providing Publons access.

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