Computers in Libraries 2007: Automation Landscape

The New Automation Landscape
Marshall Breeding

Business trends: “Every year they say everythings different this year, but this year things really are very different.” A much more consolidated industry, with mergers and acquisitions. Moving out of a previous phase of fragmentation, with a new narrowing of product options. VC and Private Equity have taken an interest. Open Source has changed business models and R&D.

Other observations: Level of innovation is below our current needs, and we’re falling behind in how we deliver content to users. OTOH, companies struggle to do what we want — innovation and development takes funding that customers [the traditionally underfunded libraries] can’t pay for in the current business model.

Libraries are consolidating for automation, as well. Taking advantage of strength in numbers, supporting each others need for tech skills, allowing tech skills to be focused on other services in the libraries. [Seriously. I miss the NILS environment, where the Gs took care of the systems stuff and left each library to handle the things that mattered. The politics were ugly, but the benefits were real.] Single library ILS implementations are becoming “less defensible and less common”. As companies become more consolidated, libraries consolidate in order to leverage buying power against them, and increase their voice in the industry’s work.

Specifics:
SirsiDynix: Been around “quite a long time” Bought by a private equity firm,
ExLibris: Bought in 2005 by VC firm.
Endeavour: Bought by same VC firm as bought ExLibris. (They bought out Elsevier.) These two E’s have been merged.
Infor: Was Extensity, was Geac. Bought by private equity firm.
[this is creepy. Do people no longer own companies? Are they all owned by faceless groups of investors? Are none of them public? Ah, here goes Breeding on that issue.]

“There are very few public companies in the industry.” [right.] Public companies in the LIS industry are rare, and often peripheral to what we do.

Several family/founder owned companies: Innovative. The Library Corporation. VTLS. These companies are not answerable to venture capitalists, and so operate under slightly different business models. [which does not make them better providers of tech and services!]

Why does ownership matter? Well, are the owners’ priorities in tune with the needs of their customers? Can they understand libraries as business customers (because, see, we’re all non-profits)? It is possible to operate a profitable company and still be in line with the customer. But who owns it affects that proposition.

The current market is narowing libraries’ options, but not moving toward monopoly. Many companies are prospering in this environment, and are innovating in their own niche. Also, domination by a large monopoly is unlikely to be accepted by the library community, and if it happened, it would be subverted by the community and its needs. [ie, open source, upstart companies, etc.]

Open Source alternatives: Explosive interest in Open Source this year, driven by widespread disillusionment with current vendors. Begining to emerge as a practical option for more and more libraries. Total cost of ownership is still reoughly equal to proprietary commerical model. Gaining traction as more and more libraries across the boundaries of academic/public/etc implement open source solutions — but will it become an avalanche? We don’t know. It might.

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