Transcript Analysis of Library Integrated Systems Marketplace

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]
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?
 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 passthrough 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]
Library Automation
Companies
Taiwan ILS sector
Global Companies in Taiwan
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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
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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
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:
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–
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Openly Informatics
Fretwell-Downing Informatics
Sisis Informationssysteme
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 Asia -
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 
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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]
Current Open Source ILS
Product Options
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
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
Evergreen
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
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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/ltgdisplaytext.pl?RC=13150
ILS Deployments
Unicorn
1704
Koha (Total)
Horizon
1612
Koha (LibLime)
Millennium
1289
Evergreen
Voyager
1183
OPALS
Aleph 500
1970
Library.Solution
700
200-300
90
272
58 / 170
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
Other Open Source Development
efforts
 Duke University leading effort to develop an
open source or community source project to
develop a new ILS for higher education
 Sponsoring project to design/build an
enterprise level automation system for
libraries in higher education
 Project currently in the grant development
phase, with likely start date of Summer 2008
 [translate]
Open Source Issues
 Explosive interest in Open Source driven by
disillusionment with current vendors
 Seen as a solution to:
– Allow libraries to have more flexible systems
– Lower costs
– Not be vulnerable to disruptions that come with
mergers and acquisitions
 Beginning to emerge as a mainstream
option
 TOC (Total Cost of Ownership) still roughly
Cost issues
 Costs shifted from traditional software licensing
models
– No initial purchase of license or annual license fees
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Hardware costs (same as traditional)
Vendor support costs (optional)
Hosting services
Conversion services
Local technical support (may be higher)
Development costs – vague models for nextgeneration development
Risk Factors
 Open Source still a risky Alternative
– Dependency on community organizations and
commercial companies that provide development an
support services
 Commercial/Proprietary options also a risk
– Opinions vary, but:
“the traditional ILS market is no longer a haven for the risk
adverse.”
(Northern PINES talking points
http://pines.bclibrary.ca/resources/talking-points)
Open source ILS Benchmarks
 Most decisions to adopt Open Source ILS based on
philosophical reasons
 Open Source ILS will enter the main stream once its
products begin to win through objective procurement
processes
– Hold open source ILS to the same standards as the commercial
products
– Hold the open source ILS companies to the same standards:
 Adequate customer support ratios, financial stability, service level
agreements, etc.
 Well-document total cost of ownership statements that can
be compared to other vendor price quotes
 [translate]
Measuring Interest in Open Source
ILS
Source: Perceptions 2007: an international survey of Library Automation
http://www.librarytechnology.org/perceptions2007.pl
Open Source Market share
 Open Source ILS implementations still a small
percentage of the total picture
 Initial set of successful implementations will likely
serve as a catalyst to pave the way for others
 Successful implementations in wider range of
libraries:
– State-wide consortium (Evergreen)
– Multi-site public library systems (Koha)
– School district consortia (OPALS)
Next-Generation Library Interfaces
Troubling statistic
Where do you typically begin your
search for information on a
particular topic?
College Students Response:
 89% Search engines (Google 62%)
 2% Library Web Site (total respondents -> 1%)
 2% Online Database
 1% E-mail
 1% Online News
 1% Online bookstores
 0% Instant Messaging / Online Chat
OCLC. Perceptions of Libraries and Information Resources
(2005) p. 1-17.
Usage + / - from 2005 to 2007
+5%
+30%
+14%
+19%
-10%
“The unfortunate exception is
the use of library Web sites;
usage has dropped from 2005 to
2007.”
Source: Sharing, Privacy and Trust in our Networked World. OCLC 2007
Crowded Landscape of Information
Providers on the Web
 Lots of non-library Web destinations deliver
content to library patrons
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Google Scholar
Amazon.com
Wikipedia
Ask.com
 Do Library Web sites and catalogs meet the
information needs of our users?
 Do they attract their interest?
The Competition
Typical ILS OPAC
Better?
Demand for compelling library
interfaces
 Urgent need for libraries to offer interfaces
their users will like to use
 Move into the current millennium
 Powerful search capabilities in tune with
how the Web works today
 Meet user expectations set by other Web
destination
[translate]
Inadequacy of ILS OPACs
 Online Catalog modules provided with an
ILS subject to broad criticism as failing to
meet expectations of growing segments of
library patrons.
 Not great at delivering electronic content
 Complex text-based interfaces
 Relatively weak keyword search engines
 Lack of good relevancy sorting
 Narrow scope of content
Disjointed approach to
information and service delivery
 Books: Library OPAC (ILS module)
 Articles: Aggregated content products, e-journal
collections
 OpenURL linking services
 E-journal finding aids (Often managed by link
resolver)
 Local digital collections
– ETDs, photos, rich media collections
 Metasearch engines
 All searched separately
Change underway
 Widespread dissatisfaction with most of the current
OPACs. Many efforts toward next-generation catalogs and
interfaces.
 Movement among libraries to break out of the current mold
of library catalogs and offer new interfaces better suited to
the expectations of library users.
 Decoupling of the front-end interface from the back-end
library automation system.
 Eventual redesign of the ILS to be better suited for current
library collections of digital and print content
 [translate]
Working toward a new generation of
library interfaces
 Redefinition of the “library catalog”
 Traditional notions of the library catalog
questioned
 Better information delivery tools
 More powerful search capabilities
 More elegant presentation
Redefining the “catalog”
 More comprehensive information discovery environments
 It’s no longer enough to provide a catalog limited to print
resources
 Digital resources cannot be an afterthought
 Systems designed for e-content only are also problematic
 Forcing users to use different interfaces depending on type
of content becoming less tenable
 Libraries working toward consolidated user environments
that give equal footing to digital and print resources
 [translate]
Web 2.0 Flavorings
 Strategic infrastructure + Web 2.0
 A more social and collaborative approach
 Web Tools and technology that foster
collaboration
 Integrated blogs, wiki, tagging, social
bookmarking, user rating, user reviews
 Avoid Web 2.0 information silos
 [translate]
The Ideal Scope for Next Gen
Library Interfaces
 Unified user experience
 A single point of entry into all the content
and services offered by the library
 Print + Electronic
 Local + Remote
 Locally created Content
 User contributed content?
 [translate]
Interface Features / User Experience
 Simple point of entry
– Optional advanced search
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Relevancy ranked results
Facets for narrowing and navigation
Query enhancement – spell check, etc
Suggested related results
Navigational bread crumbs
Enriched visual and textual content
Single Sign-on
[translate]
Relevancy Ranking
 Based on advanced search engines specifically
designed for relevancy
– Endeca, Lucene, etc
 Web users expect relevancy ordered results
– The “good stuff” should be listed first
– Users tend not to delve deep into a result list
– Good relevancy requires a sophisticated approach,
including objective matching criteria supplemented by
popularity and relatedness factors.
– [translate]
New Paradigm for search and
navigation
 Let users drill down through the result set
incrementally narrowing the field
 Faceted Browsing
– Drill-down vs up-front Boolean or “Advanced Search”
– gives the users clues about the number of hits in each
sub topic
– Ability to explore collections without a priori knowledge
 Visual search tools
 Navigational Bread crumbs
– Select / deselect facets
– [translate]
Query / Result Enhancement
 “Did you mean?” and other features to avoid
“No results found”
 Validated Spell check
 Automatic inclusion of authorized and
related terms
 More like this – recommendation service
 Make the query and the response to it better
than the query provided
 [translate]
Enriched content
 Rich visual information: book jacket images, rating scores, etc.
 Syndetic Solutions ICE ($$$$)
 Amazon Web Service (AWS)
– Recent changes in term of use seem to preclude use by
libraries
 Google Book Search API
– Released March 13, 2008
– Liberal terms of use
 No open content approach (yet)
Personalization / Single Sign-on  Customized content options based on personal
preference and profile of user
 Persistent sign-on
– Seamless navigation in and out of appropriate subsystems
 ILL / ILS patron requests, federated search, proxy services
– Credentials follow as user navigates among Web site
components
– ILS / Interlibrary Loan / proxy services / shopping cart
/ etc
 Ability to select and save content; initiate
requests; customize preferences, etc.
Deep search
 Entering post-metadata search era
 Increasing opportunities to search the full contents
– Google Library Print, Google Publisher, Open Content Alliance,
Microsoft Live Book Search, etc.
– High-quality metadata will improve search precision
 Commercial search providers already offer “search inside the book”
 No comprehensive full text search for books quite yet
 Not currently available through library search environments
 Deep search highly improved by high-quality metadata
See: Systems Librarian, May 2008 “Beyond the current generation of next-generation interfaces:
deeper search”
[translate]
Beyond Discovery
 Fulfillment oriented
 Search -> select -> view
 Delivery/Fulfillment much harder than
discovery
 Back-end complexity should be as seamless
as possible to the user
 Offer services for digital and print content
 [translate]
New-Gen Library Interfaces
Current Commercial and Open
Source Products
Endeca Guided Navigation
 North Carolina State University
http://www.lib.ncsu.edu/catalog/
 McMaster University
http://libcat.mcmaster.ca/
 Phoenix Public Library
http://www.phoenixpubliclibrary.org/
 Florida Center for Library Automation
http://catalog.fcla.edu/ux.jsp
AquaBrowser Library
 Queens Borough Public Library
– http://aqua.queenslibrary.org/
 Oklahoma State University
– http://boss.library.okstate.edu/
 University of Chicago
– http://lens.lib.uchicago.edu/
Ex Libris Primo
 Discovery and Delivery platform for
academic libraries
 Vanderbilt University
http://alphasearch.library.vanderbilt.edu
 University of Minnesota
http://prime2.oit.umn.edu:1701/primo_library/libw
eb/action/search.do?vid=TWINCITIES
 University of Iowa
http://smartsearch.uiowa.edu/
Encore from Innovative
Interfaces
 Designed for academic, public and special
libraries
 Nashville Public Library
http://nplencore.library.nashville.org/iii/encore/app
 Scottsdale Public Library
http://encore.scottsdaleaz.gov/iii/encore/app
 Yale University Lillian Goldman Law Library
http://encore.law.yale.edu/iii/encore/app
OCLC Worldcat Local
 OCLC WorldCat customized for local library
catalog
– Relies on hooks into ILS for local services
– Tied to library holdings set in WorldCat
 University of Washington Libraries
http://uwashington.worldcat.org/
 University of California Melvyl Catalog
The Library Corporation
 First ILS company involved in promoting
new interface technologies
 Initially based its strategy on AquaBrowser
and Endeca
 Indigo – announced at ALA Midwinter Jan
2008
 “Library Positioning Software”
 Based on Lucene / SOLR
Summary
 ILS Industry going through major changes
 Open Source ILS gaining ground in US
sector
– Likely to expand internationally
 Current focus on improved interfaces
 Future: A new model of library automation
specifically designed for digital / print hybrid
libraries
 [translate]
Questions and Discussion