Transcript Analysis of Library Integrated Systems Marketplace

Una Introducción a la
Industria Internacional de
Automatización de
Bibliotecas.
Marshall Breeding
Director for Innovative Technologies and Research
Vanderbilt University
http://staffweb.library.vanderbilt.edu/breeding
http://www.librarytechnology.org/
Abstract
 “An introduction to the international
library automation industry” which will
present information on the major companies
and products, trends such as business
consolidation, globalization, and company
performance.
Vanderbilt University Library
Library Technology Guides
 http://www.librarytechnology.org
 Repository for library automation data
 Lib-web-cats tracks 38,000 libraries and the
automation systems used.
– Expanding to include more international scope
 Announcements and developments made
by companies and organizations involved in
library automation technologies
¿Quienes es Quienes?
 Koha
– Open Source ILS
 Pérgamo
– Commercial ILS software
– Distributed by WalySoft
 Aguapey
– Biblioteca Nacional de Maestros
– ILS por bibliotecas de las escuelas
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Marco Polo
Catalis
Punto Biblio
SiGeBi – CONABIP
– Systema de Gestion Bibliotecaria
¿Quienes es Quienes? (cont)
 Dominant software used by libraries and
information centers throughout Latin America
 Distributed without cost by UNESCO
 Many different programs:
– CDS/ ISIS
– WinIsis
– Wwwisis
 Open Source ILS under development
– ABCD
ILS from Global Automation
Companies
 SirsiDynix Unicorn
– Pontificia Universidad Católica Argentina
 Ex Libris ALEPH 500
– Universidad de San Andres
OCLC
 Not a major factor for most libraries in
Argentina
Observations about Library
Automation in Argentina
 Small fraction of libraries use commercial
products from global vendors
 Very little involvement with OCLC
 CDS/ISIS software prevails
 Interest in open source for new projects
 Most libraries automate independently
rather than cooperatively
Impact of Politics and Geography
 Each Region of the world has its own specific
needs
 Resources available for library automation vary
 Library automation needs and capacities varies by
geographic, political, and economic situation
 Tremendous variation within each region
– Many small, rural libraries in the United States remain
without automation
– In the United Kingdom, the government provides library
services to each library
Global Library Trends
 Physical collections continue to play a large
role, but play a diminishing role
 Emphasis on resource sharing
 Dramatic increases in digital content
 Competition with other information providers
on the Web
 Library as provider of collaborative learning
spaces
Trends (continued)
 Technology center for Universities
 Integration with other academic information
systems
– Courseware, Student Records, distance education tools
 Library as locus for physical and digital
preservation
 Custodian for the intellectual output of the
academic institution
 Question: How true are these trends in Argentina?
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 (Mostly North
American perspective)
 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
 Venture Capital 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
 International: Country-specific companies seeing more
competition from international vendors
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
Library Automation M&A History
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?
 Important to determine best long-term partner for
strategic library development
 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
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
 Civica -> 3i Investors (private equity)
Public companies:
 Auto-Graphics
– De-listed from SEC reporting requirements
– Was OTC:AUGR now Pink Sheets:AUGR
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
 License fees for new ILS contracts
 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 Automated materials handling
– 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
ILS Defections
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Horizon:
Unicorn:
Millennium:
Virtua:
Aleph 500:
196
187
25
14
5
Business Development Strategy
 Essential to understand the strategic business
plans of the company
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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.
Major International ILS
products
ALEPH 500
 ILS Developed by Ex Libris Group
 Specialized system for large academic
libraries, national libraries, and consortia
 Adopted by libraries throughout the world
– Israel, Europe, United Kingdom, United States,
Asia, Latin America
 Long-term prospects: eventual transition to
URM
 $$$$
Millennium
 ILS developed by Innovative Interfaces
 Generalized system for many library types:
Academic, Public, Law, Medical
 Highly regarded for its technical services
sophistication
 Geographic Distribution:
– United States, Canada, Asia, United Kingdom, Europe,
Lain America
 Long term prospects: commitment to continued
product evolution
 $$$$
Voyager
 ILS Developed by Endeavor Information Systems,
acquired by Elsevier and later Ex Libris Group
 Specialized system for Academic Libraries,
National libraries
 Geographic Distribution:
– United States, Australia, Europe, UK
 Long term prospects:
– better development under Ex Libris than Elsevier
– Eventual transition to URM
 Minimal new sales
Unicorn / Symphony
 ILS developed by Sirsi Corporation, now
SirsiDynix
 Generalized system for Public Libraries,
Academic, Government
 Geographic Distribution:
– United States, Canada, Australia, United Kingdom,
Europe, Latin America
 Long term prospects: continued gradual evolution
 Significant defection rate
 New sales declining.
Horizon
 ILS Developed by Dynix Corporation, acquired by
SirsiDynix
 Generalized system for Academic Libraries, Public
Libraries, Special
 Geographic distribution:
– United States, Canada, Australia, United Kingdom,
Europe
 Long term prospects: None. Only maintenance
development continues
 Defection rate high, most libraries will leave this
system within 2-5 years
Virtua
 ILS Developed by VTLS
 Generalized system for Academic Libraries,
Public, National, other special libraries
 Geographic distribution:
– Europe, Asia, Australia, United States
 Defection rate high. (NYU, Oxford)
 Recent project for ILS to Queens Public
Library
Beyond the ILS
Other essential library automation
products
Link Resolvers
 SFX from Ex Libris Group
 360 Link from Serials Solutions
Federated Search
 360 Search from Serials Solution
 WebFeat (acquired by Serials Solution)
 MetaLib from Ex Libris Group
Electronic Resource Management
 Verde from Ex Libris Group
 360 Resource Manager from Serials
Solutions
 Electronic Resource Management from
Innovative Interfaces
Library Automation
Companies
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
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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
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:
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Openly Informatics
Fretwell-Downing Informatics
Sisis Informationssysteme
Infovision (Amlib)
PICA (now 100%)
DiMeMa (CONTENTdm)
 ILS companies concerned about competing with a nonprofit 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
Major US Companies not present
in Latin America
 Follett Software Company
– K-12 School library software
– Destiny ILS
 The Library Corporation
– Public Libraries
– Library.Solution / Carl.Solution
 Polaris Library Systems
– Public Companies
– Polaris ILS
 Auto-Graphics
– Public Libraries
– AGent
International Library Vendors
Advantages and Issues
Stability
 Some international vendors may have better
means to survive compared to local country
businesses
 In many regions the global companies have
stepped in as local companies decline
– Often local companies lack resources to redevelop through technology cycles
 Still risky. Mergers and acquisitions can
make a big impact
Product sophistication
 International companies have large capacity
for research and development
 Current products offer rich functionality
 Support for Unicode and language
localization
 Ability to automate very complex library
organizations
Concerns
 Ability to provide in-country support
 Software optimized for automation needs of
a given region?
 Cost. How does the international market
price compare to that of local options and
open source, and subsidized alternatives?
 Long-term continuity of products?
– As opportunities decline in the US and Europe,
many seek developing world as an emerging
market for products
Technology Trends
 Open Source Library Automation (Afternoon
session)
 Next generation library catalogs (Seminar
Wed 10 Dec)
 Next generation ILS (Seminar Thursday 11
Dec)
 Web 2.0 and Beyond (Seminar Fri 12 Dec)
Questions and Discussion