ICOLC Executive Briefing
Books24x7 Strategy & Update
September 20, 2002
Nashville, TN
A SkillSoft Company
Agenda
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Company Update
SkillSoft Market Position and Strategy
Library Product Strategy and Overview
Content Strategy
Technology Infrastructure for Libraries
Business Model
Doing Business with Books24x7
Q&A
A SkillSoft Company
Presenter:
John Ambrose
General Manager & VP, Marketing and Content
A SkillSoft Company
Books24x7 Company Overview
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Founded in 1994
HQ in Norwood, Massachusetts
Pioneer in creation and delivery of “Referenceware”
Acquired by Skillsoft (NASDAQ: SKIL) – Dec 2001
Combined company strategy:
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Books24x7 wholly-owned subsidiary
Maintains brand and market focus
Referenceware + Courseware = Complete Learning Solution
Comprehensive technology and business content
A SkillSoft Company
SkillSoft Company Highlights
•Vast Content Offering
One of the World’s Largest
e-Learning Companies
Customer Base of More than
Half of Global 5000
Strongest Sales Distribution
Critical Mass and Scale
Detailed Execution Plan
•Focus on High-Quality Design
•Support & Technology
•Wells Fargo, US Army, Minolta,
Procter & Gamble, IBM, CocaCola, Lockheed
•250+ Direct Sales People
•Growing Channel Strategy
•2.8 million Subscribers
•4,500+ course titles
•Cost Synergies
•Strong Organizational Talent
A SkillSoft Company
Combined Offering Is Unmatched
SmartForce
SkillSoft
Complete Employee Base and Life Cycle Coverage
Complete
IT
Enterprise
Apps
Sales and
CRM
Digital
Referenceware®
Compliance
and
Safety
Business
Expertise
Professional
and
Interpersonal
3,000+ Courses
8,000 Hours
Advanced Simulations
25 Languages
A SkillSoft Company
The Critical Fit: Books24x7 and SkillSoft
Courseware
Immersive
Learning
Prescriptive
Learning
Instant
Learning
Referenceware
+
Courseware
=
Complete
Learning
Solution
Referenceware
A SkillSoft Company
Books24x7 Market Strategy
Higher
Education
Corporate
Books24x7
Academic & Higher
Education Team
Goal: Seed, Pollinate,
Grow
Skills
Centers
Books24x7 Channel
Development Team
Goal: Bundle with
Courses
Books24x7 Direct
Corporate Team
Goal: Enterprise Sales
A SkillSoft Company
Referenceware Instant Learning
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Innovative, INSTANT LEARNING &
PRODUCTIVITY solution
Content from Leading Publishers
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Instant access to answers – 24x7!
Topical “Collections”
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ITPro
BusinessPro
Unique subscription-based model
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Books, vendor doc, research, etc.
FULL CONTENTS online
Graphics, code, illustrations
Continuously updated
Single Seat Price: $299
EDS, Bank of America, Avanade
A SkillSoft Company
Licensed Content Snapshot
• ITPro for Libraries
– Live titles: 1912
– Ave. new titles added per month: 77
– Key new publishers for 2002
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Cambridge University Press
IEE (UK)
Project Management Institute (PMI)
Wordware
BusinessPro for Libraries
– Live titles: 734
– Ave. new titles added per month: 37
– Key new publishers for 2002
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Career Press
JJ Keller
Kogan-Page
Perseus
Project Management institute
Purdue University Press
TEXERE
A SkillSoft Company
Key Focus: Current Content
New Titles Added in 2002
ITPro
BusinessPro
Copyright Total
Percent
Total
Percent
2003
25
2.3%
20
3%
2002
582
55%
131
22%
2001
302
28%
205
34%
2000
120
11%
115
19%
1999…
39
3.7%
131
22%
A SkillSoft Company
Partial List: IT Content Partners
A SkillSoft Company
Partial List: Business Content Partners
A SkillSoft Company
Unsurpassed Growth of Quality Content
3500
537%
Increase
Since Launch
3000
2500
2000
BusinessPro
Launched
1500
1000
500
BizPro
ITPro
ITPro
Launched
1146%
Increase
Since Launch
0
* Projected
D
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ep
-9
ec 9
M 99
ar
Ju 00
n
S 00
ep
D 00
ec
M 00
ar
Ju 01
n
S 01
ep
D 01
ec
M 01
ar
Ju 02
n
S 02
ep
D 02
ec
-0
2
* *
35 Consecutive Months of Increased Content
A SkillSoft Company
Strong Publishing Industry Partners
• Books24x7 is recognized as the leader
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Trusted partner since 1994
Opened up entirely new market (corporate)
Consistent growth and execution
Increasing royalty leverage
• Unique revenue model based on actual usage
– Every publisher thinks their books are best
– Competition to get best-sellers in the service
• Users still buy printed books
– Online behavior is event-oriented
– Users report buying habits equal to or greater
than without Books24x7
A SkillSoft Company
Renewed Growth in Library Customers
220
250
200
150
100
Analyze &
Evaluate
Renewed
Commitment
& Expansion
Libraries
Initial
Launch
50
0
Q4/00
Q2/01
Q4/01
Q2/02
A SkillSoft Company
Library Market: Lessons Learned
• Key Segment: Advanced learning, reference
resource. When students grow up they become
professionals
• Right People: Invested in library industry
expertise to ensure proper focus
• Technology: Libraries have different technology
needs from corporations
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Structured licensing, flexible options
Remote patron access
MARC records
Usage information
• Role: Books24x7 is bridge between publishers and
online database needs of libraries
A SkillSoft Company
Partial Library Customer List
Antioch College
Cornell University
McGill University
Bard College
DePaul University
Ohio State University
Bentley College
Drexel University
Princeton University
Bowling Green State
Fordham University
Stanford University
Brown University
Georgia State
SUNY
Cal. Polytechnic
Indiana University
UNC
Case Western
Kent State
University of Toronto
Colgate University
Loyola University
Vassar College
Columbia University
MIT
Western Michigan
A SkillSoft Company
Presenter:
Doug Jenkins
Vice President, Engineering
A SkillSoft Company
Books24x7 Technology Platform
• High availability and performance
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Load balanced web servers
Multiple internet connections
Multiple database servers
Secure hosting environment
• Patent pending search engine
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Boolean, relevance, proximity, truncation
Search multiple collections down to an individual book
Search prior results, categories, bookshelves
Relevance scores for book, chapter, section
• Quality content presentation, navigation
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Complete intra-book linking including Index
Scaled and full size graphics (often in color)
Inter-book linking based on citation information
Extended Table of Contents (lists of figures, tables, code samples, etc.)
A SkillSoft Company
Library Application Features
• Authenticate via IP, referrer pattern matching
• In-library CU usage may be protected from remote
patron usage
• Access multiple collections from single UI
• MARC records with persistent links directly to the
book
• Printer friendly content page reformatting
• Browser-based self-service patron UI with no
applets, plug-ins, etc.
• Persistent personalized bookshelves, content
annotation, and new content e-mail notifications
(optional)
A SkillSoft Company
Library Reports
• Sales-assisted reports currently available
– sessions by day, month, custom time periods
– titles accessed with retrieved page counts
– SU denials (counts, time of day)
– HTML, CSV formats
• Customer accessible reporting site (11/1)
• ICOLC compliant reports (1/31)
A SkillSoft Company
Presenter:
Scott Doan
Director
Academic & Higher Education Business Unit
A SkillSoft Company
Value
Complement business & technology collections
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Provides front list, high-demand, ‘perishable’ content
Supports distance education, remote learners
Reinforces and builds upon current curriculum – extends the learning experience
Low maintenance, streamlined licensing/access model (no points to track, eliminate
turn-aways, no multiple copy purchase requirements)
– High Use, High-Demand (1,000+ sessions, 10K+ unique pages) in Academic setting
Productivity & Learning tool
– Unlike other title based services, our offering is a database of works (i.e. Lexis-Nexus,
EBSCOhost, etc.)
– Instantly pinpoint specific answers to time-sensitive problems
– Personalize for own usage, stay informed
Address costs of high-demand, lost, stolen materials
Immediate access to trusted sources for quality
reference resource
A SkillSoft Company
Focus
Academic Institutions
Universe of Opportunity*
667 Private 2 Year Institutions
1,023 Public 2 Year Institutions
1,758 Private 4 Year Institutions
635 Public 4 Year Institutions
Strong Engineering, IT or Business Programs
Majority of the 4,000+ Institutions Belong to at
least one consortia
*Higher Education Directory (2000)
A SkillSoft Company
Channel Strategy
Direct Sales Team
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112% revenue growth in 8 months
Dedicated team, supported by 250+ sales force
Regional Networks/Providers
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BCR, WALDO, SOLINET, PALINET, AMIGOS
State Networks
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MLC, WILS, NYLINK, OHIOLINK/NET, ILLINET, MINITEX
For-Profit Resellers
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Established Electronic Resource Providers
Micromedia
A SkillSoft Company
Contribution Criteria
Community Reach
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Sufficient representation and member alliance
Adequate Professional Staff
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Education, promotion and training
Commitment
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Minimum Revenues
Complements current services strategy
Need you to “not lose money”
Focused Response to Member Needs
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Timely, reliable and accurate
Communications
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Information Disbursement
Consortia Overlap Issues
A SkillSoft Company
License Approaches
Consistency
Sustainable
– 8-years of experience with model
– Proven approach validated by customers and leading electronic
resource providers
Flexible
– Options for concurrent & unconstrained access
– Usage reports for analysis of continued investment, appropriate
license levels
One size doesn’t fit all!
– Options: unique and shared licensing
A SkillSoft Company
Opportunity
Institution-level (Unique) License
Concurrent Model
Minimum Requirements*
2 Concurrent Users
1 user per 5,000 FTE/350,000 pop. served
Pricing scaled to account for larger FTE sites
2 user: $7,700
10 user: $30,360
Each addl. user after 12, $1,250
*Based on historical library usage trends, comparable usage stats/license fees from
other leading electronic resources, minimum publisher license thresholds
A SkillSoft Company
Opportunity
Institution-level (Unique) License
Unconstrained Site License
FTE
License Fee
1-4,999
$14,793
5,000-9,999
$17,606
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50,000-65,000
$48,825
Pricing scaled to account for large FTE sites
IP authenticated
Usage Reports tracks sessions, content access, etc.
A SkillSoft Company
Opportunity
Consortial-level (Shared) License
Unconstrained Site License – Consortia Sponsored
- $52,500 base (50,000 FTE), + $5,000 per 5,000 FTE
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Pricing scaled to account for large FTE
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5,000 FTE: $17,606
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40,000 FTE: $32,085
- $100,000 (net revenues) annual minimum commitment
- Bundled product discounts (ITPro and BusinessPro)
A SkillSoft Company
Models
• 38 academic institutions, savings of $15,600 gross (split with
libraries), + membership admin/service fees ($250 each) =
7,800 + 9,000 = $16,800 net
– Extended 6% discount to libraries versus 3%
– Savings of $693, instead of $347/institution
• Savings of $1,300 to each library versus libraries licensing on
own, + consortia nets $1,000+ per transaction
• 15 Member, Total FTE = 250,000
Ave. FTE per institution= 16,300
Ave. cost to license on own = $24,008
Ave. cost to license through consortia= $16,413
Savings per institution= $7,595
A SkillSoft Company
Opportunity
Consortial Discounts
12% for sales over $25,000 (annual, aggregated)
17% for sales over $200,000
22% for sales over $500,000
Consortia-driven splits, extended to libraries
Multi-year contracts: discount accelerators
Bundled Product (ITPro and BusinessPro) discounts available
A SkillSoft Company
Process
Approach with Opportunity
Enter into reseller agreement or license agreement
(consortia sponsored)
Jointly draft opportunity
– Confirm minimums met
Build Marketing & Sales Plan
Execute
A SkillSoft Company