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Explore the evolving landscape of library automation systems, industry consolidation, and emerging open-source technologies. Discover the impacts of business decisions on library innovations and the trend of partnership strategies.
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Analysis of Library Integrated Systems Marketplace 2008 Annual Meeting of University Librarians in Taiwan National Chung Hsing University Library, Taichung, Taiwan May 15, 2008
Three Major areas of interest • The state of the Commercial ILS industry • Emerging Interest in Open Source • Focus on Next-Generation Library Interfaces • [translate]
Business Trends A look at the companies involved in library automation and related technologies
Automation System Marketplace • Annual Industry report published in Library Journal • 2008: Opportunity out of turmoil • 2007: An industry redefined • 2006: Reshuffling the deck • 2005: Gradual evolution • 2004: Migration down, innovation up • 2003: The competition heats up • 2002: Capturing the migrating customer
Business Landscape: 2007-2008 • An increasingly consolidated industry • VC and Private Equity playing a stronger role then ever before • Moving out of a previous phase of fragmentation where many companies expend energies producing decreasingly differentiated systems in a limited marketplace • Narrowing of product options • Open Source opportunities rise to challenge stranglehold of traditional commercial model • Asia: Country-specific companies seeing more competition from international vendors • [translate]
Other Business Factors • Level of innovation falls below expectations • Companies struggle to keep up with ILS enhancements and R&D for new innovations. • Pressure within companies to reduce costs, increase revenue • Pressure from libraries for more innovative products • Pressure from libraries not to increase costs • Many libraries lack top quality automation systems due to high cost • [translate]
Consolidation among Libraries for automation - • More libraries banding together to share automation environment • Reduce overhead for maintaining systems that have decreasing strategic importance • Need to focus technical talent on activities that have more of an impact on the mission of the library • Pooled resources for technical processing • Single library ILS implementations becoming less defensible • Essential for libraries to gain increased leverage relative to large companies • Moving toward a smaller number of larger ILS installations
Why worry about who owns the Industry? • Some of the most important decisions that affect the options available to libraries are made in the corporate board room. • Increased control by financial interests of private equity and venture capital firms • Recent industry events driven by external corporate decisions; • Market success and technological advantages don’t necessarily drive business decisions • [translate]
Investor owned companies • SirsiDynix -> Vista Equity Partners (bought out Seaport Capital + Hicks Muse/HM Capital in Dec 2006) • Ex Libris -> Francisco Partners (bought out VC’s in Jul 2006) • Endeavor -> Francisco Partners (bought out Elsevier Nov 2006) • Infor (was Extensity, was Geac) -> Golden Gate • Polaris -> Croydon Company • formerly part of Gaylord Bros (acquired by Demco)
Public companies: • Auto-Graphics • De-listed from SEC reporting requirements • Was OTC:AUGR now Pink Sheets:AUGR • Civica. Public company traded on AIM London exchange • In transition to ownership by 3i Investors, a private equity firm
Founder / Family owned companies • Innovative Interfaces • 100% ownership by Jerry Kline following 2001 buy-out of partner Steve Silberstien • The Library Corporation • Owned by Annette Murphy family • VTLS – tech spin-off from Virginia Tech, wholly owned by Vinod Chachra • These companies not under the control of external financial interests
Revenue sources • New ILS sales • Maintenance support • 15% purchase cost annually with inflation adjustments • Non-ILS software • Library Services
Diverse Business Activities - • Many ways to expand business in ways that leverage library automation expertise: • Non-ILS software: link resolvers, federated search, ERM, portal/alternative Web interfaces • Retrospective conversion services • RFID or AMH • Network Consulting Services • Content products • Imaging services
Libraries Demand choice • Current market narrowing options • Consolidation working toward monopoly? • Many smaller companies currently prosper in the library automation industry • Room for niche players • Domination by a large monopoly unlikely to be accepted by library community • Monopoly would be subverted by Open Source or other cooperative movement • Many countries and regions continue to be served by local companies • [translate]
OEM Partnership strategies - • ILS companies partner with other companies for technologies. • Development resource are not abundant, even in the companies with massive capital support • No library automation company can take on all aspects of development • Tough decisions on what to build vs buy • OEM arrangements can increase cost, increase flexibility, and decrease control
Partnerships - • Increasing number of partnerships with specialist companies: • Serials Solutions • TDNet • MuseGlobal • WebFeat • Openly Informatics • Medialab Solutions
Companies more self-reliant - • Tend to develop products through their own development efforts relying less on technologies licensed from third parties • Examples: • Innovative • Ex Libris • Better integration, more control, now pass-through costs
Business Development Strategy • Essential to understand the strategic business plans of the company • Long term growth? • Short term profits? • Growth through M&A • Organic growth by attracting new customer libraries • Positioning for sale? • Get past press releases and spin and look closely at the corporate behavior. • [translate]
Global Companies in Taiwan • Innovative Interfaces (21%) • Civica: Spydus (15%) • SirsiDynix: Horizon (14%) • Ex Libris: Aleph 500 (5%) • VTLS: Virtua (2%)
Innovative Interfaces • Privately owned by one of this founders • No involvement with VC or Private equity • No recent involvement in M&A • Acquired SLS in 1997 • Evolutionary Product strategy • Innopac -> Millennium beginning in 1995 • Millennium as core technology • Encore, RightResults, ResearchPro
Ex Libris • Global provider of software to Academic Libraries • Largest in the academic market • Owned by Francisco Partners • Acquired Endeavor in Nov 2006 • Strong focus on non-ILS products: • SFX – MetaLib – Verde – DigiTool – Primo • Continues to support and develop ALEPH and Voyager
SirsiDynix • Highly consolidated company • Sirsi Corp, Dynix, DRA, MultiLIS, INLEX/300, Docutec, OCLC Local Systems, DataPhase, Electric Memory, NOTIS Systems • Largest in the industry • Owned by Vista Equity Partners • Previously supported by VC: Seaport Capital, Hicks Muse) • Consolidated company working toward consolidating and integrating products and business units. • Recent announcement for single Unicorn-based ILS
Civica • UK Company; library automation unit based in Australia • Recently purchased by 3i private equity firm • Large company with software products across several sectors, specializing in systems for public governmental authorities • Spydus library automation system one of many business units • Originated in Australia, deployed in many other geographic regions
Taiwan Companies • Transtech: • Totals II (Technically Opulent TRANSTECH Automation Library System) • 31% share of major academic libraries in Taiwan • Distributes federated search system based on technology licensed from MuseGlobal • Distributes OCLC WorldCat Link Manager WCLM • Formerly 1Cate link resolver from Openly Informatics
Top Information Technologies • Provider of library automation technologies to Taiwan for over two decades • Distributor for Ex Libris • ALEPH, SFX, MetaLib, etc • Distributor for Spydus (previously Urica) since 1985 • Torica
OCLC in the ILS arena? • Increasingly overlapped with library automation activities • WorldCat Local recently announced • Penetrating deeper into local libraries • Library-owned cooperative on a buying binge of automation companies: • Openly Informatics • Fretwell-Downing Informatics • Sisis Informationssysteme • PICA (now 100%) • DiMeMa (CONTENTdm) • ILS companies concerned about competing with a non-profit with enormous resources and the ability to shift costs.
Cambridge Information Group • Increasingly involved in library automation arena • ProQuest: • Serials Solutions • WebFeat • AquaBrowser (Academic, North America) • R.R. Bowker • AquaBrowser (worldwide) • Syndetic Solutions
Follett Software Company - • Consolidated company focused on K-12 school library automation • FSC, Sagebrush Corporation, Winnebago Software, Nichols Advanced Technologies, Card Catalog Company, Scribe • Privately owned; division of Follett Corporation • Destiny as flagship system for centralized automation of districts • Legacy: Winnebago Spectrum, Athena, Circ Plus, InfoCentre • Accent – OEM of Unicorn offered by Sagebrush withdrawn
The Library Corporation - • Family owned and managed • Focused on public libraries • Acquired Carl in 2000 • Acquired Tech Logic in April 2005 • No involvement by VC or Private Equity • Carl division slipping in market share • Presence in Singapore
Auto-Graphics - • Founded 1950 • Evolved from traditional publishing services company to focus on library automation • Publicly owned company (Pink Sheets)
Polaris - • Privately owned and funded by Croyden, a small holding company • Martin Blackman • Morris Bergreen (deceased Jul 9, 2001) • Formerly part of Gaylord Bros • Gaylord Information Systems, GIS Information Systems (May 2003) > Polaris Library Systems • Focus on U.S. Public Libraries • Products based on Windows-based technologies
Open Source Software An Emerging Trend in the Global ILS Arena
Open Source Alternatives • Explosive interest in Open Source driven by disillusionment with current vendors • Beginning to emerge as a practical option • TOC (Total Cost of Ownership) still roughly equal to proprietary commercial model • Still a risky strategy for libraries • [translate]
An industry in turmoil • Disruptions and business decisions to narrow options have fueled the open source movement • Benefit to libraries in having additional options • Traditionally licensed and open source ILS alternatives will coexist in the ILS arena • [translate]
Open Source ILS enters the mainstream • Earlier era of pioneering efforts to ILS shifting into one where open source alternatives fall in the mainstream • Off-the-shelf, commercially supported product available • Still a minority player, but gaining ground • [translate]
Koha: first Open Source ILS • Koha + Index Data Zebra = Koha ZOOM • Components: • Perl • Apache • MySql • Zebra: search engine option for larger installations
Libraries committed to Koha - • 300+ libraries • Horowhenua Library Trust • Nelsonville Public Library • Athens County, OH • Crawford County Federated Library System • 10 Libraries in PA • Howard County, MD • Service area population: 266300 • 4.7 million circulation transactions in 2006 • 1 million volumes • Central Kansas Library System • Santa Cruz Public Library • Central, 9 branches • 2 million volumes • Near East University Library • 1.5 million volumes
Evergreen • Developed by the Georgia Public Library Service • Small development team • June 2004 – development begins • Sept 5, 2006 – live production • Streamlined environment: single shared implementation, all libraries follow the same policies, one library card
Libraries using Evergreen • Georgia PINES • http://gapines.org • Georgia PINES: • 1 Installation • 54 Public Library Systems • 260+ library facilities • Does not include municipal systems: Atlanta-Fulton County, Cobb County • Province of British Columbia in Canada – Northern PINES • Kent County, MD • Under consideration by academic libraries in Canada
OPALS • Open source Automated Library System • http://www.mediaflex.net/showcase.jsp?record_id=52 • Developed and Supported by Media Flex • Harry Chan • Original developer of Mandarin • Installation ($250) and Hosting services ($750) • South Central Organization of (School) Libraries • consortium of K-12 school libraries in NY
NextGenLib • ILS designed for the developing world • Originally traditionally licensed, introduced 2003 • Transition to Open Source in Jan 2008 • 122 Installations (India, Syria, Sudan, Cambodia) • Collaborative project: • Kesavan Institute of Information and Knowledge Management • Versus Solutions • Versus IT Services Pvt. Ltd • http://www.librarytechnology.org/ltg-displaytext.pl?RC=13150
Commercial Involvement Companies formed to support open source library products
The Open Source Business Front • Index Data • Founded 1994; No ILS; A variety of other open source products to support libraries: search engines, federated search, Z39.50 toolkit, etc • LibLime • Founded 2005. Provides development and support services for Koha ILS. Acquired original developers of Koha in Feb 2007. • Equinox. • Founded Feb 2007; staff formerly associated with GPLS Pines development team • Care Affiliates • Founded June 2007; headed by industry veteran Carl Grant. • MediaFlex. • Longstanding school library automation company. Latest generation ILS developed in open source model