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When Domains Collide

Editors’s Note: This is a modified version of the lecture that Stephen E Arnold, ArnoldIT.com delivered in Philadelphia, March 1, 2010. The actual presentation was an extemporaneous talk based on this preliminary set of notes.

I want to thank NFAIS for inviting me to address the members of this professional organization. The world of bibliography, abstracting, indexing, professional publishing and academic research has been shaken to its foundations in the last three or four years. The Richter scale measuring the waves pulsing through the bedrock of information access is being stretched. I find that talking about what is happening and what information professionals can do about those pulses difficult.

This morning I want to put the pulses into a context. I am cautiously optimistic about a finding my research has revealed. Specifically, the shocks are coming from the integration of formerly separate disciplines into new services. In short, the traditional methods are being put into software and hardware modules and used to build new, more efficient, and more flexible services. Complete information businesses are now a commodity component that a clever engineer can use like a building block. Good news for engineers skilled in integration. Not such good news for experts in a hand-craft like Linotype operation. By snapping together modules, domains collide and are reinvented.

That’s today’s world of information.

Where We Are

Today we live in a world of a number of global, possibly monopolistic online research services stands and literally a hundred million or more citizen journalists creating blogs and tweets.

Until recently, say about 1979 or 1980, a scholar transported from the 11^th century scriptorium would have become familiar quickly with the hard copy research books painstakingly documented by Constance Winchell. But move that person to today’s world and the mental shift would be more difficult, perhaps impossible.

Bring that 11th century researcher to today’s world, and I think adjustment would be difficult. Since the advent of online (anyone remember NLS?), information is just “out there”. Today information is “here” when it appears on a screen. The display of information is evanescent until it is “written”—that is, copied—to a storage device which may be located “out there”. It is possible to print an item of information, but the digital instance is the “real information.” This is a significant conceptual shift since online became our common information currency.

In fact, I cannot begin work until I “find” the particular electronic instance on which I am to work. Without search and retrieval, I am a cooked goose.

And just finding a particular document can be difficult even with the many search systems available. If our time traveling 11th century research can print a document, the information needed may surrounded by unwanted images and advertisements. Without the ability to recognize the “real” information our 11th century scholar would be hard pressed to use today’s information retrieval systems. The monk comes from another time, and that time has its own domain of information. The domain includes ways to create information, way to access information, and ways to reference other information. The monk might be squashed when his domain collided with the domain of 2010 information access. When domains collide, methods are crushed, recycled, and remade. This is deeply disturbing to people who cling to specific ways of doing such things as research.

The implications of domain collision are important in my opinion. Economics, human behavior, work processes, and speed are defined by domains. Let’s run down a handful of the challenges domain collisions ignite. The good news is that domains that touch create a boundary condition in which opportunities can flourish.

Challenges of Domain Collisions

If you have a business school degree, you have studied the touchstone buggy whip reference in Theodore Levitt’s “Marketing Myopia” that appeared in the Harvard Business Journal in 1960. The idea is that a buggy whip manufacturer who anticipated the advent of the automobile could have expanded the product line to include a leather steering wheel wrap or automobile interiors.

Thus, the problem is that each domain has a certain way of perceiving phenomena. I won’t dwell on phenomenological existentialism, but I think it has quite a bit to teach us about what we can see when something “new” this way comes. We are, in the telling phrase of William James, stricken with “a certain blindness”. We simply cannot see beyond our domain. When domains collide, not only our vision is impaired we must deal with processes and methods that have been transformed by the forces involved.

Not surprising, the problems of apprehending have triggered a cascade of challenges. Vocabulary is an issue. One example is the use of abbreviated spelling and neologisms to communicate in Twitter “tweets” or short messages via a mobile device. Messages such as ru w/me grate on some. To those in the domain, the messages is clear and appropriate.

Other phenomena I have observed include:

1. Work methods crafted for one domain such as copying a manuscript by hand on animal skin do not transfer to another domain such as copying information to a storage device. An entire lifetime of learning is irrelevant in the new domain.
2. The time required to assemble a document is measured by manual tasks that are often organized in a sequential manner. The digital domain allows many tasks to be handled quickly and, in some cases, in parallel.
3. The costs for manual, serialized work processes can be problematic. When software can be used to eliminate certain work previously done by humans, the economics change.

I think you can see from these examples that our time traveling researcher from Mont St Michel in the Middle Ages would have a steep learning curve.

I have given quite a bit of thought to the implications of this type of domain collision. I know when I look at banking, retail, manufacturing, and finding the right person to marry that domain collisions are one of the defining attributes of today’s world.

Publishing

I want to comment about publishing because most NFAIS members are involved in the creation, selection, and dissemination of information. The domain collision began with the advent of the online search systems for the NASA RECON project, the work of Dr. Gerald Salton (Cornell University), and the non-linear increase in the capabilities of hardware and software.

What is interesting to me is that since this revolution began, arguably in the 1970s, publishing has been eager to embrace certain technologies yet reluctant to get too close to other technologies.

Let me give you an example. When I worked at the Courier Journal & Louisville Times Co., we operated a rotogravure press and we printed the New York Times Sunday Magazine. We embraced traditional rotograveur printing technology and then we adopted technology that chopped the manual plate making process out of the work flow. We used computers, fancy software, and numerically-controlled presses as early as the early 1980s.

The Courier-Journal Board of Directors understood the importance of electronic information and created a separate separate business unit to build digital products. I was lucky to participate in the development a profitable online business with ABI/INFORM, Business Dateline, Pharmaceutical News Index, and the core technical databases that were the foundation of today’s Cambridge Scientific Abstracts. This work took place in the early 1980s and relied on traditional mainframes and timesharing businesses like Tymnet and Dialcom as service bureaus.

I know from first-hand experience that those who managed the technologies steeped in the domain of traditional newspaper production believed their unit of the company was in the thick of technological change. The electronic publishing technology was a radical and strange undertaking. The people running the state-of-the-art four color printing presses did not see how electronic information could be a viable business.

We know now that the electronic publishing technology has emerged as one of the key technologies for information companies today. In fact, the brutal struggles between Macmillan and Amazon, Apple and Sony, and Google and book publishers are anchored in the technology that was a second-class citizen in the 1980s.

What’s interesting is that within publishing the domain of the traditional products like books, music, motion pictures, and television programming is now colliding with the domain of the network computing infrastructure. Complete businesses and their nested processes are now a Web service. One can download a electronic publishing system as open source software. The key point is that anyone anywhere in the world can become a digital newsroom with a Web site, newsfeed, and a community.

What’s even more interesting is that the agents of change are the children of many publishing executives and in some cases, the former employees of established publishing and rich media companies.

Another interesting point is that the new domain of content production is surrounding the traditional information industry which Paul Zirkowski tried to capture in this diagram from the Information Industry Association in the mid-1980s, which, in my opinion, nicely summarizes what we now know as the Petri dish for Amazon, Apple, and Google, among other firms.

This is a diagram created by the “old” Information Industry Association. Created in the mid 1980s, it is an attempt to show how the information world at that was beginning to develop. What’s interesting is that the successes of Amazon, Apple, and Google, among other companies is dependent to some degree on combining several of these “old” segments in one service.

When I look at this diagram, I can see that the success of Amazon, Apple, and Google in information comes from taking the building blocks from this 20-year-old diagram and combining pieces into new constructions. Keep in mind that these firms are not in the strict sense traditional publishing companies. These are technology-centric companies whose engineering uses information as a catalyst to create new functions.

Let me identify and comment briefly on three and then provide some concluding observations. If we had more time, this is a rich area and warrants a more in-depth discussion.

First, this diagram makes it easy to see that Apple fused hardware, information, and software. Once Apple saw how the iPod fused with the iTunes online store and the monetization of digitally-protected content worked, Apple was quick to focus on supporting the Windows platform. None of the competitors in MP3 players hit upon the particular chemical-like combination Apple found. Like a pharmaceutical company, Apple came up with the correct formulation and none of the competitors have been able to crack the Apple formulation. Apple created a new domain and has been able to use product commoditization and different value and quality pairs to build a de facto monopoly. Apple has recently used its disruptive power to change the Amazon subsidizing approach to eBook sales. Amazon, it seems to me, is in a defensive position in online music, eBooks, and now in the hardware business itself. Amazon’s core competency and its domain expertise are not likely to be sufficient to deal with Apple.

Second, in the case of Google versus Microsoft in Web search we see that Google has expanded beyond simple indexing into technology infrastructure. The firm’s investment in next-generation computer hardware and software has created a “mini pre-Judge Green AT&T”-style monopoly. With the infrastructure in place, Google has been able to diffuse—perhaps a better word is seep—into other business sectors. This tactic is difficult for incumbents to blunt because Google has an infrastructure in place and its services can be changed with a few lines of software code. Incumbents have to figure out what Google is doing, make sure the infrastructure is in place, and then respond to Google. The problem is that once an incumbent realizes Google is a threat, it is too late. Google now has scale and scale cannot be duplicated quickly, cheaply, and robustly. Scale becomes a competitive advantage just as it was for the “old” AT&T.

Third, we can see that Amazon has moved from the online sale of fungible products like books into a very different space by setting up an online store and then selling tangible and intangible products. Of most interest to me is Amazon’s video rental business and its music business. Amazon has a striking array of free, unprotected MP3 files available. Amazon has blended Content Services, Facilitation Services, and Content Packages. Amazon gets involved in setting up storefronts for other vendors. Amazon is also a publisher because I can take my quite dull monographs and sell them there.

Some Lessons

What do these examples tell us about domains that brush one another? The IIA diagram shows quite separate segments of the information industry in 1980. What we now know is that the boundaries between once-distinct information sectors have touched. The interaction or collision has produced opportunities and three companies along with Facebook, Twitter, and a handful of others have trumped the incumbents in revenue, customer pull, and products.

First, I see significant opportunities for those who can look at the original IIA diagram and weave together solutions that cut across the boundaries the IIA identified 20 years ago. Instead of problems, I think quite a bit of opportunity exists by looking at ways to bridge domains.

Second, I think the examples of Amazon, Apple, and Google are not isolated. Each has a high profile and attracts a great deal of attention because of the economic clout to which there seems to be no easy rejoinder from a company lacking a cross-domain presence. When a company with a competence in a specific domain runs into a cross domain player, the buggy whip problem cracks once more.

Third, I believe lower cost and more efficient business processes will encroach and eventually supplant less efficient and more expensive business processes. Some information sectors may persist as the equivalent of couture fashion and luxury goods like the Rolls Royce, but for the majority of information functions, the software-centric systems will become dominant.

To conclude, let me make several observations about opportunities. One is that the success of the Apple iPod/iPhone/iPad App Store provides some ammunition for developing information services specifically for these customer segments. The idea that a publishing company can surf on Amazon, Apple, or Google is one that should be given serious thought. Pick one or pick all three. Ignore them all at your peril.

Another is that the notion of stopping the diffusion of technology into established domains has to be put aside. An attempt to stop lower cost and more efficient businesses from entering a market will not work. The reason is that both money and demographics are forcing the change. In today’s economic climate, investors will fund entities that use technology to lower costs, increase efficiency, and gain agility. Entities lacking these attributes will face significant challenges.

Finally, many information companies are adapting to the collision of the traditional information domain and the newer, software-enabled approaches. The popular press fixates on big name companies, but there are firms mounting significant challenges across the information spectrum. Examples range from YouTube.com distributing Sundance Festival films to Demand Media’s creating content at low cost for traditional publishers who do not know how to “manufacture” low-cost information. Facebook, not Google, is now one of the largest sources of rich media for its members. And Facebook is becoming a news referrer and a news generator of note. Not even Google has an answer to Facebook’s social content solutions.

When domains collide there is opportunity. Obviously great effort is needed to look objectively at existing business methods and processes, make changes, and then create new solutions. A changing of the guard is underway, and the building blocks of this revolution have been known for decades.

Now, time is short and purposeful, informed action is needed. If you want to talk about our work in identifying new opportunities, just contact me at sa at arnoldit dot com.

Stephen E Arnold, March 1, 2010

Yep, I was paid to write this. My opinion, though.

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