Cover Page
B.2.2 Long term viability
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- Bu səhifədəki naviqasiya:
- Digital Libraries
- Search powered content provider
- B.2.2.b Market Approach
- B.2.2.c Business Projections
- LangLog Business
- QueryTrans Business
B.2.2 Long term viabilityB.2.2.a Market SizeThe market of GALATEAS is represented by digital libraries in a first instance and the market of all kind of information providers which run autonomous search engines, in a second instance. The reason why we tend to prioritize digital libraries, is not technical in nature: it is just connected to the fact that some of the partners are in contacts with some of the main European federation efforts, as well as private and public digital libraries. Overall, according to a study by the European Commission, revenue from online content will reach €8.3 billion by 2010. While this figure includes also content providers which cannot be considered GALATEAS’s potential customers (e.g. on-line games), the five years predicted growth of 400% provides a clear idea of the expansion force of the sector. Digital LibrariesWe consider here as “digital libraries” the following institutions/companies:
All of these players are potential customers of the LangLog service. As for the QueryTrans service we must evaluate specific need concerning multilingualy. The following facts help us to assess market size:
These factors lead us to believe that there is a strong need for the services proposed in this project. At the same time, no vendor of OPAC or e-catalogue platforms is offering the possibility of cross-language access. The only exception to this claim is represented by CACAO: however, as stated elsewhere, CACAO and GALATEAS are not competitors, in that CACAO is aimed at cross language search and indexing, whereas GALATEAS focuses on query translation: in other words: a customer who needs CACAO-CLIR is typically a customer who either have no search engine, or it is not completely satisfied by the current search engine; on the contrary a customer of GALATEAS is a customer who already runs a search engine and want to introduce cross-linguality without renouncing to the already in-place search engine. Concerning the market dimension, spending on automation by libraries in the (enlarged) European Union for the year 2007 amounted to 406 million euro for public libraries, 57 million for national libraries, and 235 million for higher education libraries, representing about 7% of total library expenditures.4 We can estimate that only 20% of this amount was spent on software products, and that half of that (10% overall) was devoted to information access software: This leaves us with a potential market of about 70 million euro per year. Search powered content providerWe consider as belonging to this category all types of content providers that have a resident search engine as the main tool for accessing contents. By “resident” here we mean an autonomously run search engine, as opposed, for instance to outsourced searches such as the ones provided by Google web site search. This category comprises:
There are no statistics available about such a differentiated user group, and especially there are no statistics concerning adoption of resident search engine. However, we can have some clue about economical figures if we consider that the market size for eCommerce only in 2008 was worth 60 billion dollars in the USA (annual growth of 15%) and 170 billion euros in Europe (annual growth of 25%). In certain sectors such as tourism, 20 % of sales are mediated via eCommerce, and for the publishing industry (software and books) this figure raises to 30%. It is also noteworthy to consider that analyst estimates that the current offer of eCommerce is undersized with respect to customer needs. It is evident that gross revenue in this segment is at least as interesting as the gross revenue in the digital library segment. B.2.2.b Market ApproachThe whole market approach of GALATEAS is based on service provision rather than on software licensing. Software developed in the project that is subject to an open source license will be indeed licensed under an open source model. This means that any company would be able to provide services of log analysis and query translation, as soon as the necessary NLP web services or software (which are not open source and are not part of the development of GALATEAS) would be available. This kind of model will foster competition, as several vendors will be able to offer comparable services, with varying commercial conditions. Practically the envisaged business model foresees three kinds of players:
According to a consolidated business model, utility service providers will receive a percentage out of the yearly fees which is paid by the customers to the GALATEAS service provider. Of course companies inside GALATEAS will be the best candidates for the exploitation of the software. At least two of them (XEROX and CELI) may be providers of utility services, thus benefiting of percentage fees. Most importantly, all companies may become GALATEAS service providers, with a special interest by GONETWORK and Objet direct, which are already providing log related services. This fact could in principle raise inside-project competition. While this would not be in principle a negative factor (competition being one of the main market pillar), partners of GALATEAS will rather opt for a collaborative model in order to maximize market impact. The main lines for a collaboration will be:
Moreover all the GALATEAS companies have a long track of co-operation in the context of commercial and research projects, which will naturally facilitate co-operation in GALATEAS. B.2.2.c Business ProjectionsIn this section we will formulate some forecasts concerning the potential realistic economic impact of GALATEAS services. In the following we will assume revenues for GALATEAS providers, irrespective of the fact that they are utility service providers or main GALATEAS providers. Moreover we assume that part of the business will come from consultancy and not only from service provision. This is a realistic assumption as it is likely that organization specific needs will emerge in the context of the provided services (e.g. specific adaptation of query translation or specific mappings for query classification). In the following a distinction is made between the LangLog and QueryTrans services. LangLog BusinessThe most likely business schema for LangLog is probably based on annual fees. Such a fee will be based on a fixed amount plus a percentage computed on the basis of the number of queries in the analyzed log files. As an average, the commercial partners of the consortium estimate that a base fee of 3.000€ per year could be a perfectly affordable cost for most concerned institutions. After the first year of market penetration, the average of the annual fee could rise to 4.000€ for small organizations. We make the “conservative” hypothesis of about 4.000 potential customers, and we assume that after four years of marketing activities, 12,5 % of such a potential market will be attained. The resulting numbers are reported in the following table (Year 2 is considered to be the last year of the project):
Notice that for the computation of Net Present Value (NPV) we considered project costs as an initial investment (the are split between the LangLog and the QueryTrans service). QueryTrans BusinessIn the context of CACAO, some of the commercial partners verified that an annual fee of 6.000 € for small organization is considered as perfectly acceptable. In the following projection we assume such an amount as a base: this is a rather conservative estimation, as bigger institution are likely to pay higher fees, due to the variable part of the fee itself, proportional to the quantity of translated queries. We assume a potential market of 2.000 organizations and we consider a rate of market penetration of 10% after 4 years of marketing activities (Year 2 is considered to be the last year of the project).
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