Dick Harrington is the CEO of Thomson. During a December investor’s conference presentation, he clearly described Thomson’s future strategy. Their vision is to be the leading provider of workflow solutions to business and professional customers. Their goal is to develop “must-have” products with high utilization and renewal rates. I would assume that a recurring revenue model is also preferred. As they create technology to leverage their content, they find that they achieve greater leverage and higher margins. This is a very sound strategy.

His decision to divest Thomson Learning aside, it would seem that there are excellent opportunities awaiting College and Educational publishers who employ similar strategies. Students, professors, teachers, and parents could all benefit from tighter integration of enabling technology and multimedia including simulations with more traditional text based materials. Many publishers are already finding success with next generation products that offer customers their choice of media options combined with technology that helps this group of professionals do their jobs better. The key is to focus on customer needs and creating innovative new products rather than creating new media versions of existing products. These new products also have the potential to be licensed for specific terms and usages rather than be sold outright. This model would likely accelerate revenue growth and yield better margins.

We’ll strive to provide examples of successful ventures in later posts…