Magazine article Information Today

Are We Being Ripped Off?-Part 2. (Investigate Report)

Magazine article Information Today

Are We Being Ripped Off?-Part 2. (Investigate Report)

Article excerpt

Pricing for high-value electronic information is a complex subject--and often highly charged. If the perception is of overpricing, then the reality becomes irrelevant. In last month's issue, I solicited the views of one academic user and two subscription database providers. But subscription pricing is perhaps a simpler subject than transactional pricing. The latter typically involves aggregators as well as highly trained search specialists. This is because transactional pricing is often the more cost-effective model for users who are conducting powerful cross-database searches of multiple databases on host organizations.

In order to gain some insights into the corporate viewpoint, this month I asked a longtime, experienced online searcher who works in the world of corporate research to share his views.

James Lommel is manager of technical information at GE Global Research in Niskayuna, N.Y In 1957, he joined GE Research Laboratory (a predecessor of the present GE Global Research) after receiving his Ph.D. in applied physics from Harvard University. He was a staff researcher working as a physical metallurgist in fields such as recrystallization, magnetic materials, and permanent magnetic recording media. He also held positions in technical administration and computer and information services management. Since 1993, Lommel has been manager of Whitney Information Services, the technical library at GE Global Research.

Subscription or Transaction?

"We get just two databases on subscription: Compendex and Metadex," Lommel said. "These are delivered to us monthly on CD or DVD and then mounted on our own server behind the firewall. But for all other databases, we go to integrators and access the databases we need transactionally. We do have a choice between a number of different integrators, and choices are based on our familiarity with a particular service (our library researchers become fond of a particular set of arcane command tools)--but are obviously also based on the selection of databases available."

He continued: "Having experience with a particular search engine is very important in making transactional searching cost-effective--an important productivity issue. We use many hundreds of databases transactionally. [These are] covered primarily by just two hosts and supplemented by Web searching. At this location, we have three professional librarians that concentrate on searching, serving over 2,000 internal company customers, some of whom are also users of these hosts in their own right. As end-user tools have become progressively easier to work with, the number of end users has also increased, and this is definitely something that we encourage. We find that end users will do simple, fast searches but leave the more sophisticated questions--or questions requiring comprehensive retrieval--to the professional librarian."

So what does Lommel think is the future for pricing models? Is there a trend away from transactional pricing in favor of more spending on subscription services? "No, not as far as we are concerned," he said. "We tend to favor transaction pricing because of our finance model for supporting R&D, and I can't see this changing for the foreseeable future. Yes, this is true even for our end-user online spending. The reason is that we get most of our financial support from GE operating components on a contract basis. The cost of subscriptions on the other hand goes into an overhead pool, increasing the overhead rate we have to charge on R&D labor."

Lommel agreed however that in the academic arena there would be different priorities. "I can see that in the academic environment, total predictability for exact budgeting may be a more important driver, leading to more products on subscription. But in the contract-supported corporate organization, being able to pass on the transactional charges to individual projects is an important capability. …

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