One of the basic trends in the library technology industry is the consolidation of the companies that has transpired over the last few decades through mergers and acquisitions. This consolidation has resulted in an industry dominated by a small number of organizations. These companies operate internationally, and are in many cases the leading options for libraries in other regions of the world, as they are here in the United States. While there are some mid-sized and smaller companies that offer library technology products within a given region or to niches not covered by the larger companies, the options of providers today remains uncomfortably narrow.
The number of products supported today exceeds the number of providers. In many cases, even though companies have merged, the products of the incumbent companies continue to be supported, and in many cases receive ongoing development. Examples include ongoing support of both Horizon and Symphony by SirsiDynix; and of Aleph and Voyager from Ex Libris, in parallel with the development of its new Alma platform. Innovative continues to support Millennium in addition to Sierra as well as the Polaris and Virtua ILS products, gained through business acquisitions. Follett has largely completed the unification of its product line around Destiny, though some installations of its much older product lineup remain, including Circulation Plus, Winnebago, and Athena.
The number of products from these companies will eventually narrow. Supporting multiple incumbent products in the short term is a wise and pragmatic strategy. Companies can reap considerable savings when they merge through business integration of administrative, sales, and support divisions without also eliminating development and support of multiple products. Libraries do not respond well to abrupt product transitions because of their deep reliance on these products for their operations and their long planning and procurement cycles. It disrupts the library's technology strategy when a product on which it depends faces an early demise as a victim of a corporate merger.
Given the need to maintain positive relations with their library customers, companies follow a gentle course in their product strategies. These product strategies may involve a long-term convergence of multiple legacy products into a single next-generation platform. Ex Libris can be seen as a prominent example of this strategy in its ongoing support and development for both Alma and Voyager. SirsiDynix, likewise, continues to support Horizon and Symphony while providing new modules, functionality, and products via its strategic BLUEcloud platform. Innovative has more recently joined the leagues of companies with multiple ILS platforms and has not diminished the resources devoted to the development of Polaris. The company has strengthened the development of the LEAP technologies, which provide Web-based interfaces for Polaris, with potential for extension to Sierra and other products from Innovative.
My general view is that most companies work toward an eventual one-platform strategy, even if it takes a decade to execute. Within this context there is an overall expectation that incumbent products will receive development and support for an extended period, but that the development and other services will eventually wind down as they are displaced by newgeneration offerings. Providers that attempt to coerce change too rapidly can diminish loyalty of existing customers and tarnish their reputation in ways that are counterproductive. The strength and innovation of the new products will attract libraries more than any coercive product strategy. The long-term strategies of each company toward a single or a unified set of products will result in further narrowing of the field of options for libraries. I am optimistic that this slate of new and evolved products will be more powerful and innovative than the current slate of offerings. Companies with more capacity than in previous phases of the industry, undertaking long period of development, will achieve results. The number of options may be narrow, but it is my hope that strong products for each type of library will emerge. If either the number of options shrink beyond levels of tolerable competition or if the products prove not to perform at expected levels, then other disruptive factors will likely transpire to alter the market.
Another level of consolidation or concentration is apparent in the ways that libraries opt to implement systems. I see a pattern, not unlike business consolidation, where libraries previously operating as separate integrated library systems are moving toward shared implementations. In this issue of Smart Library Newsletter, we note a number of national and statewide projects provide a single instance of a technology platform displacing multiple systems. Sharing systems through consortia has been part of the library automation arena from its inception. The numbers of libraries joining existing consortia and the mergers of consortia result in ever larger implementations. This trend of concentrated implementations not only favors the providers able to support large-scale projects, but it also can dramatically reshape the competitive landscape to one where procurement results in a winner-take-all outcome.
The trend toward concentrated systems isn't universal. Threads of activity work in the opposite direction. Some libraries break away from consortia to implement individual systems. For example, the Lincoln City Library in Nebraska recently exited the Pioneer Consortium, which shares a Koha system, to implement its own SirsiDynix Symphony ILS. Overall, in the data that I observe, the churn of libraries joining consortia exceeds those moving to independent ILS implementations.
The consolidation of companies, products, and implementations means that each of these organizations offering strategic library products bears incredible responsibility. Ever larger numbers of libraries depend on the success of each of the members of this small corporate club.
Given the high stakes that bear on the success of these companies, reasonable scrutiny, analysis, and assessment is important. I continually gather information on these companies for the many articles and reports that I produce, keeping an eye out any red flags that signal concern. Any organization may exhibit symptoms at any given time that may need to be addressed. I keep a watch out for chronic issues.
Not that the industry is entirely free of problems, but overall each of these organizations continues to demonstrate a generally healthy prognosis. It's important to note that this current slate of players represents the survivors of the industry. Weaker players of the previous phases of the industry have been the targets of acquisitions and absorbed into other companies. The industry is fortunate to have seen very few companies that have gone bankrupt, and none in recent decades.
This month's feature on the transition of leadership at Innovative follows this vein of inquiry. Any abrupt change in leadership—especially at the CEO level—triggers concern. Is such an event related to the individuals involved, or is it a harbinger of broader change? My initial conclusion leans toward the former. Any person can make a choice not to continue with any given employer—and it's highly conspicuous at the CEO level. It's not necessarily important to know the personal circumstances. But after talking with a number of persons within the company, I don't see any indication of systemic concern. As usual with this type of article, we take the opportunity to review and report on a variety of events related to the company that helps support this conclusion.