I have been in the intranets business for a number of years now, but my interest in the electronic delivery of information goes back well over 20 years. I can still recall the first time that I saw a demonstration of the Dialog online retrieval service around 1976: It seemed quite miraculous. Then a few years later, Bibliographic Retrieval Services launched online access at 1200bps, which meant that information was displayed on the screen at a rate faster than the eye could read. At that time, it was difficult to imagine a need for faster download speeds. So much has happened in the last 20 years, not the least of which is the yardstick by which we measure.
The pricing model was based on the time spent connected to the computer system, with different databases having their own specific connect-hour rate, usually around $60 to $100 an hour with an additional charge for printing records. This was a very easy pricing model to manage from the vendor perspective, but in the end, the link between the time taken to undertake a search and the value of the information retrieved was a totally arbitrary one, and before long other models emerged, mostly based on an annual subscription. This required the information manager to forecast the likely demand for a service over the following year, and few had a crystal ball of adequate sophistication.
With the rise of CD-ROM delivery in the 1990s, many publishers moved towards a model based on the number of users, often concurrent, as CD-ROM servers were (at least in principle) able to track the number of users. There was much use of dongles and other technical innovations to ensure that the license conditions were respected. A big problem was that one vendor would have a price for 10 to 50 users. Another vendor, offering similar content, would have a price for 25 to 100 users. This created significant problems in comparing the cost-benefits of the two services, as so much depended on just how many users would need to access the service.
THE MORE THINGS CHANGE...
Two decades later, the question of the pricing of services for enterprise environment is still a major topic. Everything has changed; yet nothing has changed. The issues are broadly the same for accessing information services as for acquiring content management software, but I will focus on information content delivery. Content owners have long dreamt of delivering content to every desktop in the organization and, with the widespread adoption of intranets, this seemed to be achievable. However the dream is turning into a nightmare as the implications of the intranets' complex technical requirements begin to be appreciated.
Many organizations have implemented single sign-on for employees, so that access to the intranet is linked directly to the email directory through an LDAP protocol. With the exception of highly confidential content, organizations probably think that everyone should have access to all intranet content. In the case of information services like business news, however, there is little point in providing this content to everyone because only a percentage of the staff are able to make use of the content. The problem for intranet manager and content vendor alike is that few intranet managers can give an exact number for the potential users of the business news service. In addition, the intranet configuration may not allow for limiting which information services are accessible without the use of more (universally hated) passwords.
One option is to register IP addresses of staff with permission to use the service, but this runs into technical problems with the intranet firewalls. Network managers may also allocate dynamic addresses within a certain range that are used in sequence as required, so cookie information that links users and their password could be lost. And some organizations only have one IP address that they are willing to release to external service providers.
Some have an intranet that is, in fact, an aggregation of individual departmental intranets, so there may be a possibility of delivering content just to one specific intranet. That approach assumes that only staff members that are linked to the specific departmental intranet need to gain access to the service—a rare situation in reality.
THE REMOTE-ACCESS DIMENSION
Increasingly access to an intranet is being provided to two new groups of users. One of these groups is made up of customers and suppliers who are provided with access in order to create efficiencies in the supply chain and in customer management. A company may have access to an important third-party research report that it would like to share with a group of customers. However, this action almost certainly breaches the license terms and copyright legislation and, in the European Union, may also breach legislation on database rights. In fact, the company may not have set out to share this report, but inadvertently made it available through the extranet link to the intranet.
The other group of users are those accessing the intranet remotely. Here, intranet access will probably be handled by a different set of log-on and authentication protocols that may inhibit access to services that the user would normally be able to access when at his desk.
THE COST-PRICE-VALUE EQUATION
One of the truisms of the information business is that information has collection and delivery costs that can usually be determined with reasonable accuracy. The problem comes with the fact that an individual user, in the context of any given information environment, determines the value of this information. Moreover Technologies is providing me with a customized newsfeed on intranets, extranets, and content management. I'm finding this out personally in the management of my own intranet blog. Many items are of great value and I use them directly in the blog. Others are of more peripheral use, and stimulate me to look into an issue that has not been high on my agenda. There are also items that duplicate other sources of insformation, or treat something well known in the industry as news. If another intranet consultant used the same feed I am certain that we would each put the daily list of news items into different categories.
If the value of the information service varies among users, then the perception of what represents a reasonable price will also vary. The content provider then faces a situation in which the delivery mechanism may not permit individual users to register for the information service, and for its use to be tracked, and yet without this information, neither the intranet manager or the content provider has a basis for the discussion about what represents a mutually equitable price for the service.
TOWARDS A WIN-WIN SITUATION
Intranet managers that don't come from an information professional background may not have understand how external information is used in the organization. Thus, they might not appreciate the value of the content. The content provider is looking to reduce the cost-per-sale by having a very simple model that can be used by even a neophyte salesperson. In my view, there needs to be a higher degree of realism on both sides. One recent development that could bring the two parties closer together is the realization of the benefits of a corporate taxonomy, and many vendors (Factiva is just one excellent example) are now selling not only content, but also consulting services. This broadens the budget base that is available, and can also result in complementary benefits in addition to the value of the content itself.
Maybe the only sustainable long-term approach is for the initial contract to be agreed on the basis of feedback from the customer about the levels of use (perhaps based on surveys about the use made of the information rather than access log files) that is then shared with the vendor on an open basis. With this comes respecting the right of the vendor to change the contract terms on the basis of the outcomes of the discussion. This contract may well be set on a somewhat arbitrary basis, such as the number of sites or users. At the outset, this may have a negative impact on the P/L of the information vendor, but longer term could lead to a very strong and mutually beneficial relationship with the customer. There are certainly dangers to this procedure, but to continue to provide services on an abacus-type approach of just counting what can be countedis equally as dangerous.