Seller’s Pendulum
A few weeks back, I wrote about the data information and analytics buyer’s pendulum and how it’s swung back and forth over the last 25 years. The patterns are predictable. They’re just new to those whose work life has been largely dominated by high growth, ample money, low interest. No one that I know has led during inflationary times and that’s a new beast for all of us, even in an industry where computing costs keep going down.
As I look now to providers in our industry — who we call The Sellers — the pendulum is now swinging in response. And from where I sit, it’s swinging harder, faster, and with more whiplash. I haven’t spoken to a CEO in months who isn’t cutting back and now doing so hard.
In Q4, it was business as usual, with some minor softening but optimism and pretty much OK-ness.
In Q1, it was waking up to a need to trim, slow hiring, and responding to a slowly lengthening sales-cycle.
In April May? It’s becoming a you-know-what show.
Budgets cut. Expenses under a microscope.
PE owners insisting on cost savings, cash preservation, and no RIFs yet. That’s reserved for META and Disney and the big platforms. Hiring is tight for sure. Just the other day there was an article about the impossibility of finding a white-collar job. Media hype? I’m not so sure.
Bottomline: A large chunk of our industry is PE-backed and screws are tightening big time and fast.
In societies, panic is emerging. The combination of AI, open access, changing user and buyer needs, institutional budget constraints, and lower demand means the old models are finally breaking.
In the large companies: wholesale pullback. They are taking big chunks of budget and slashing. Many are struggling to invest in AI or facing the bellwether of changing markets. I could name names, but I won’t. Just look at the financials and earnings reports of most of the large public companies in our space and it’s not pretty.
RELX and WKS will be the last ones standing because they had the foresight to remain diversified and to pivot hard into analytics. Hearst too, which took a hard pivot into B2B and health and had the good fortune of being private. Other large (read market-share leaders) private societies with dominant businesses in data are doing OK — they have must-have solutions, often analytics-based, and users won’t live without.
Where are the other green sprigs? In the young startups whose data is unique, who are AI-enabled, and fortunate enough to be profitable and serving workflows that help customers save or make money.
A reckoning is coming in our industry and my instincts say it will be worse than 2001, 2008–09, and 2020. They were all different, but this isn’t one we’ve seen before. The world is different. The machines are different. The economy is different. The geopolitical climate is different.
Recession plus Inflation is an ugly combination, and while there’s a lot of resilience in info services, the writing is on the wall. The ink is red. The pendulum is at it again.