In the summer of 2023, Accuris (formerly IHS) quietly acquired Techstreet from ASME. At the time of writing, no public announcement had been made, which is odd for a deal of this size (about 70 M). At the time of the acquisition Accuris / IHS revenues were estimated at 350 M USD and Techstreet at 65 M USD. Both companies are now owned by KKR Private Equity and are currently being consolidated. Combined, the IHS and Techstreet companies now represent over 33% of standards market, estimated at 1.5B per year, and over 90% of enterprise accounts that subscribe to numerous standards from various publishers. The next biggest aggregator is SAI Global, owned by Intertek, with approximately 30 M USD in sales. This consolidation of the market is concerning for a couple of reasons.
Firstly, standard development organizations (SDOs) are now in a weaker negotiating position with Accuris as its sheer volume and sales network dwarf anyone else. While SDOs retain a monopoly on their own standards, most multinational or larger companies want to purchase their engineering, safety, and other industry standards in a single location to facilitate management of the standards and new versions. Most medium and large companies require standards from at least a dozen standards bodies, if not more, making it improbable they will work directly with SDOs or smaller aggregators. While smaller companies may be okay with purchasing from numerous sources, it does create a number of challenges and will ultimately contribute to more piracy as companies may resort to workarounds and sharing purchased standards to avoid buying from more suppliers and complicating their purchasing process. Whenever you make a product more difficult to purchase, sales go down.
The second reason for concern is the potential impact on the cost of purchasing standards. You do not need a Harvard MBA to know that competition keeps prices down. Techstreet kept IHS/Accuris honest through price competition and transparency. Now that the two companies are consolidated under management by the private equity firm KKR, it is quite possible that Accuris will try to increase prices and apply pressure on the SDOs to provide larger margins to Accuris. The increase in prices will be interpreted by the market as an increase in SDO prices, even if the price increase comes from Accuris. Generally speaking, less competition leads to inferior products and higher prices.
Accuris has confirmed to its customers that they will migrate all Techstreet subscribers to their product IHS Accuris Workbench. Workbench has a number of benefits but also has a number of challenges and issues. Many Techstreet customers selected Techstreet because they were not fans of Accuris/IHS, and those same customers are now forced to go back to a product they intentionally left. This will likely cause some issues and frustrations. In short, this acquisition and management by a non-engineering private equity firm of an engineering data company are creating ripples in the standards industry.
Nimonik currently works with SPC for Chinese GB and TS industry standards. We hope to be able to offer access to more standards in the coming years through partnerships and relationships. If you have a specific needs or ideas, please contact us at info@nimonik.com.
