Information Industry Overview

It has been said that the universe, though known to be expanding, is not doing so in the way in which it was once thought to be, that is outward from a single point. The same can now be easily said of the universe of information. As the need for more and better information is met head on with the tools and desire to create it, the Information Age has generated Information Overload and Data Deluge. The quest for relevant information now leads not only to proprietary databases, but also to the Internet, which has now become a primary source for research, and to the corporate PC and the enterprise where workers create content on a daily basis. To compound the problem information providers are creating more data in an effort to meet the needs of those who seek it. Of course where a need exists there are those who try to capitalize on it and the Information Industry is no exception. Outsell Inc. recently released a report entitled, Information Industry Outlook: FutureFacts 2007, which provides an extensive overview of the market and reveals its potential. The report predicts that the industry will reach $458 billion in revenues in the next three years. With all the information out there it should be no surprise that chief among the growth drivers is a category referred to as Search, Aggregation and Syndication (SAS).

Though, according to the report, “Growth of the overall information industry slowed in 2005 from its earlier faster pace that resulted in a compound annual growth rate (CAGR) of 8 percent for the period 2001 through 2005,” solid growth did occur and is expected to continue. In 2005 the information industry grew at a 6.3 percent rate over the previous year and ended with, “aggregate revenues of $358 billion.” Overall Outsell suggests that there is a flattening of growth and valuations consistent with a market at “an inflection point.” The market which may near its peak in late 2006 and into 2007 is not seen as entering a downturn, rather Outsell suggests that the market is reaching the, “turning point from increasing growth rates to steady and slower ones.” Ultimately, “the information industry is heading into a period of steady growth at a slower pace.” As the needs of information seekers are attempted to be met a key driver in the market has been, and will continue to be, Search, Aggregation and Syndication.

“The information industry hot spot continues to be Search,” which has continually led the pack. In 2005 the Search, Aggregation and Syndication segment generated $36.2 billion in revenues, “10 percent of the entire information industry.” This is not a huge surprise, as, “Growth of the SAS segment has far outpaced that of the overall information industry since 2000, and its 14 percent growth in 2005 was again more than double the industry average.” Growth in this sector is also expected to continue. “Outsell forecasts that SAS will grow 16 percent in 2006, well over double the industry growth rate, to $42 billion, and we forecast SAS will have a compound annual growth rate of 17.3 percent from 2006 through 2009, to achieve $68 billion in revenues.” In this sector Outsell notes three key trends. As it is a search sector, it is not a surprise that at the top of the list of these trends is Google. Outsell refers to Google as the “New Starbucks” which “continues to expand in every direction, with new launches and beta experiments cropping up all the time.”

Though it is praised for “light speed” actions, Google (and other search leaders) are cautioned by another trend, “The most linked-to ranking methods are being challenged, and click fraud is rattling the pay-per-click (PPC) foundation.” Such challenges are leading to, “a tremor in the force.” Finally, ‘Traditional’ aggregators are focusing on, “high-value-added solutions and reinforcing their long-standing positions in the enterprise market.” This is being done through rolling out enhancements and enterprise tools as well as through expansion of content offerings.

According to the report, “Publishers and information providers, and enterprise information managers, need to attend to changing user behaviors. In particular, they need to address reducing the time necessary to find information and closing the gap in user expectations.” These parties must, “keep pace with the proliferation of information-seeking and –using (and -creating) behaviors and rapidly adapt.” As, “Users have become more diverse and voracious in their information consumption patterns,” and outpaced, “providers’ ability to create real solutions that save them time,” the amount of time spent on ‘information tasks’ is growing with, “the trendline moving away from user efficiency.” Two years ago ‘information task time’ averaged 11 hours a week, that amount has now risen to 13 hours per week. Such a trend is only going to increase the need for tools that deliver efficient solutions, and they are out there. It will also increase the noise surrounding these tools, as their creators speak up trying to get a piece of the $458 billion pie.

A more complete version of this posting, with accompanying journal articles, and research reports can be found at the website of Analyst Views Weekly.

More information on this topic can be found on Northern Light’s Internet & Information Services Market Intelligence Center.

And in the following articles:

The Search for Meaning
Computer Weekly, October 24, 2006
Everyone knows that there’s masses of valuable information lurking in the enterprise. So all that’s needed is a user-friendly way to find the right stuff and put it to good use. The benefits of enterprise search are significant, according to Short, who says users can reap measurable savings, especially if search is coupled with a more structured approach to storage, using a corporate filing plan, classification schema and metadata tagging of documents.

HotTopics: Information Industry Outlook: FutureFacts 2007
Outsell, September 19, 2006
In this HotTopics, Outsell forecasts conservative growth for the information industry from 2006 to 2009, while predicting a great 2007 for companies that innovate while focusing on execution. This future-looking piece summarizes metrics and trends for 11 vertical information industry segments and key customer groups that fuel the $358 billion information industry.

Information Industry to Reach $458 Billion by 2009, According to Report
EContent, September 19, 2006
Outsell, Inc., a research and advisory firm for the information industry worldwide, has released Information Industry Outlook: FutureFacts 2007, an annual forecast of the trends and drivers fueling the information industry. The report predicts that the industry will reach $458 billion in revenues in the next three years, with a slow but steady compound annual growth rate (CAGR) of 6.4% from 2006-2009.

Zen and the Art of Enterprise Search
CIO, September 18, 2006
What’s the similarity between meditation and business? Simple: In both cases, the answers to the big questions are usually found within. And with widespread deployment of business intelligence and data warehousing solutions among corporates, that’s never been truer than it is today. When knowledge workers want to know something, they are looking inward, using search techniques to seek out clues that are scattered across the entire corporate IT resource—from the data submerged in silos including ERP, ordering and financial systems, intranets, e-mail and Web servers, and users’ own workstations.

Northern Light Debuts New Business Research Engine
Information Today, September 11, 2006
C. David Seuss, CEO of Northern Light, explained the history of its research engine and why this might feel like déjà vu for longtime searchers. “Ten years ago, Northern Light launched our first publicly available search engine with the idea that business professionals would prefer to search industry publications, business news, and the Web from one site using one user interface. Northern Light has been providing business search for a decade now. In 2002, the company’s then new owners discontinued free public access to the search engine and focused solely on enterprise users. When the employee group bought the company back in 2003, we immediately decided to return the free public access to our search engine as soon as we had the right product to offer. You cannot imagine how proud we are of this day when we are able to invite the public back. The Little Blue Folders are once again at your service!”

Search Moves Well Beyond Google
InformationWeek, June 12, 2006
Search for “enterprise search” and you’ll find Google Enterprise. It’s the top result returned by Google and Yahoo, and the third returned by Windows Live. But Google isn’t the answer for every company. Your choice of a search tool depends on what you need. “Google’s search appliance doesn’t really have very many dials and knobs to tune it or adjust it,” says Susan Aldrich, senior VP of IT research firm the Patricia Seybold Group.

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