Entrepreneur Mark Rowse tells Geoffrey Davies that content is king - and he's buying it bigtime.
Academic life has traditionally not offered huge opportunities for entrepreneurs. The culture of research for its own sake and open access chimed ill in the face of Thatcherism.
But higher education has become more business-like as the budget cuts have continued and opportunities have developed around commercial ideas from within the universities that are sold outside.
It is all the more unusual then when an entrepreneur emerges who thinks he can make money out of exploiting the academic community's interest in research and openness.
"I was interested in digital media when the internet exploded in the mid-nineties and I was looking for a business opportunity," says Mark Rowse, chief executive of ingenta, which now runs the Bath Information and Data Services (Bids) used by more than 70 per cent of British universities.
Bids is the research resource created by the Higher Education Funding Council for England in 1991 to allow online searches of journals. What Rowse has done is to merge Bids into a private company and develop it for the benefit of academics with, he believes, a huge potential for profit making.
"There are two sides of a successful web business: content and users. Each needs the other. But with academic research, you already have the users and what they want is content," says Rowse, who read Anglo Saxon and later law at Cambridge.
Previously with N. M. Rothschild for seven years in mergers and acquisitions, Rowse became interested in the potential of digital media while working in eastern Europe on the privatisation of telecoms and film studios.
"I felt the acquisition of content was more interesting than finding the users, so having identified academic users I looked for content."
Last month, ingenta announced that Reed Elsevier, the world's largest publisher of academic journals, many of which are leaders in their field, had signed up to make their titles available online.
More than 1,000 titles from Elsevier Science will be online by the end of this month, along with titles from OUP, Blackwell's, Academic Press and John Wiley.
Publishers pay a set-up fee to get onto Bids and an annual fee thereafter.
Academic users are unusual in that they are rarely the person paying for the content or the access. Because ingenta organises site licences with unlimited use - like a book on a library shelf - any registered user can look at anything the library has signed up for. This takes the cost out of individual searches and, of course, access via the Joint Academic Network (Janet) means there are no direct line charges.
"Compare this with a law firm using a specialist system who pays a base charge and then cost by the hour for searches and line charges," says Rowse.
The company is 25 per cent owned by Bids, the largest shareholder, which raised $4 million through a private placing last year. Not only does the university have a large share in the company but employees who transferred to ingenta from the university staff were able to buy shares or take part in the option scheme. Staff and management own 20 per cent of the company. "I think there is a huge commercial opportunity now with the internet to make this resource available to professional knowledge workers outside of academia. People who need information as part of their working lives and will pay to get it," says Rowse.
When Rowse identified Bids as a potential vehicle for his entry to the academic information market, the university had already been considering the future of the organisation. Being funded only on a year-to-year basis was unsettling for staff and the university's management thought there was commercial potential in the service they were operating.
"They had identified three options by the time we appeared," says Rowse.
The first was a sell-off to venture capitalists - but they wanted a more commercially experienced team. Second was a sell-off to an existing data provider - but the university wanted to keep the academic integrity of the operation. Third was a hybrid solution, which is where ingenta came in.
"Bath put their assets in for their share of the company and we went out to raise the $4 million," says Rowse. "It's easy to raise a few hundred thousand or $20 million - but the amount we were looking for was rather in between."
Much of the money has come from private clients' investment trusts managed by stockbrokers and represents investment by about 40 individuals.
The deal with Reed Elsevier means that researchers whose universities are signed up can now have access to almost 2,000 academic titles and hundreds of thousands of articles, which can be searched by keywords, author's name and so on.
When an article has been identified the text can be downloaded as a Portable Document Format file, which will be free if the university is a subscriber, or paid for on a credit card if not. Registration to the service is free and there is no obligation to buy.