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Smarter Libraries through Technology: The Library Tech Industry Transforms

Smart Libraries Newsletter [February 2016]

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The ongoing consolidation of the library technology industry has been a recurring theme for the past two decades. Recent months have seen the most significant transition of that history, with the largest company in the library technology industry joining forces with one of the major companies in the broader library content and services arena. We are in a phase of the industry where patterns of business transformations and investments previously established may take new turns.

The business environment oriented to libraries can be seen as divided into different sectors or layers. One sector, providing content to libraries and related organizations, and another, providing technology, have previously operated separately for the most part. The past decade saw minor overlap, but the involvement has now become more substantial. The consolidation of ILS companies seems to have gone as far as reasonably possible, leading to other arrangements as companies seek new growth opportunities.

Library Content and Services Industry

One sector of the industry includes a group of very large organizations with involvement in many different business activities, primarily oriented to libraries, though some also may seek customers in other information-oriented sectors. These general library services companies take many different forms with varying areas of focus. Companies in this league might include primary and secondary publishers such as Gale Cengage, Sage, Elsevier, Taylor & Francis, Springer, Wiley, Thomson Reuters, EBSCO Information Services, ProQuest, and dozens of smaller organizations. Demco, a large company that offers a large catalog of supplies and services to libraries, has also ventured in to the technology arena with its October 2015 acquisition of Boopsie, known for its mobile platform.

The primary publishers are certainly involved in developing technologies, but mostly for the acquisition and delivery of their own or licensed content. Those such as Elsevier, Gale, Thompson Reuters, and Gale have created or acquired critical content products of interest to libraries and related organizations and have developed technology platforms for the delivery of that content. These platforms are specifically oriented to the delivery of their content and do not necessarily aim to provide general resource management capabilities to libraries nor generalized discovery services.

Smart Libraries Newsletter, and its antecedent Library Systems Newsletter, have not routinely covered the content industry. These content products, the companies that provide them, trends, and business developments in this space are well covered by more specialized publications. Smart Libraries Newsletter occasionally delves into this sector to cover a major event or technology product of broader interest to libraries.

Elsevier's Scopus database is an interesting exception because it provides discovery to content from many different sources within its scope of content. Scopus includes only a subset of the broad realm of scholarly and professional content of interest to libraries, an important difference relative to the general index-based discovery services such as EBSCO Discovery Service, Summon, Primo, and WorldCat Discovery Service.

I consider ProQuest and EBSCO Information Services to be categorized in both the general library services and library technology industries. EBSCO Information Services and Pro- Quest each offer major content products, but also offer technology products that provide management and discovery functionality beyond their own content offerings. While the many different announcements related to new content offerings on EBSCOhost or on the ProQuest content platform fall out of this newsletter's scope, developments related to their general index-based discovery services, electronic resource management tools, and resource management systems are well within the focus of coverage.

Library Technology Industry

Companies of the library technology industry, while perhaps offering a broad range of products, are characterized by a focus on strategic technology products for libraries. Smart Libraries Newsletter specifically covers this industry.

The library technology industry comprises primarily companies that offer resource management products, discovery products, or some narrower niche of library interests. In an earlier phase the industry was oriented toward integrated library systems. Some of those companies that continue in this vein include SirsiDynix, Innovative Interfaces, Ex Libris (prior to its acquisition by ProQuest), The Library Corporation, Auto-Graphics, and Biblionix. Several others are active in the United States, as are dozens internationally. BiblioCommons, while not offering resource management products, has developed a discovery interface for public libraries.

Consolidation in the library technology industry has been pervasive, primarily through the mergers and acquisitions of direct competitors. There may be little room for further consolidation of that type. This process has formed a handful of large companies, each offering multiple internally developed or acquired products. It seems unlikely that the marketóor regulatorsówould tolerate further mergers. A merger of SirsiDynix and Innovative, for example, seems to me unlikely. While some possibilities remain for larger companies to acquire mid-sized or small companies offering ILS products, not many would be open to acquisition or of high strategic value. I believe the industry is close to the final phase of likefor- like consolidation.

Further consolidation of ILS-oriented companies may push the industry past a threshold of too few choices from the perspective of libraries. In the absence of at least two viable contenders competing within each library niche, libraries may rally behind other strategies or opportunities. For large libraries, the choices already seem sparse. In the past few years, large academic libraries have mostly chosen between two commercial options, Alma from Ex Libris and WorldShare Management Services from OCLC. Intota v2 until now was seen as a promising third option, which has been withdrawn with Pro- Quest's acquisition of Ex Libris. Innovative's Sierra finds use in many academic libraries, but its recent new sales have been skewed more toward the public library sector. In the public library sector SirsiDynix and Innovative stand as the top competitors for large organizations. A larger slate of providers also joins the fray for mid-sized libraries, including The Library Corporation, Auto-Graphics, and Biblionix.

Open source continues to gain an increasing presence in the library technology industry, but its role has not been especially disruptive. Following an initial spike of interest, open source ILS products, primarily implemented through commercial support providers, have become a steadily growing routine option. While libraries resonate with the values of open source, factors such as overall value, functionality, and quality of support apply as much as with proprietary offerings.

Koha continues to see steady rates of adoption in the United States, primarily among small to mid-sized libraries, and mostly through specialized support firms such as ByWater Solutions. Interest in Koha internationally, especially among developing nations, has become increasingly widespread. Evergreen, specifically oriented to public library consortia, saw a growth spurt a few years ago, with ongoing steady growth.

The Kuali OLE project continues brewing as a system built for and by large academic libraries. In addition to the original development partners, two additional libraries have signed on in recent weeks: Cornell University and the Texas A&M Library system. Yet, in comparison to the totality of the large academic library sector, Kuali OLE has yet to gain a significant stake. The project may have even more indirect or conceptual impact, giving libraries a glimmer of hope of a competitive open source alternative.

I see the current phase of the industry to be characterized by strategic acquisitions involving companies of differing profiles. The acquisition of Ex Libris by ProQuest is the current prime example. New types of synergies seem more possible in these scenarios. In the academic environment, where both management and discovery of resources is accomplished through technology platforms imbued with knowledge bases and centralized discovery indexes, the union of organizations with strengths in these different areas offers the promise of much more value than yet another ILS company roll-up.

The synergies for technology products oriented to public libraries seem less obvious. In this space key areas of interest include customer engagement, delivery of e-content, flexible inventory control, and resource sharing.

Any other mix-and-match acquisitions can't be predicted. I do not expect future mergers and acquisitions, whether from content-oriented organizations or those with other kinds of involvement of library institutions, to simply match this pattern. Rather, they will explore other synergistic scenarios. Regardless, I do not expect the library technology to remain static in its current form.

There have been earlier and less successful phases of involvement by the content industry in library technology companies. Content-oriented companies Blackwell and Knight-Ridder, owned Carl Corporation during the 1990s, did not bring particular positive impact to the company. Elsevier, one of the major primary publishers, was owned Endeavor Information Systems from April 2000 through November 2006. In retrospect, this was not deemed as that much of a success in that Elsevier, despite its massive resources, did not develop Voyager or other resource management tools aggressively, but focused more on its e-journal delivery platform. Any potential synergies were not realized, at least partially due to the immaturity of the library technology industry at that time relative to the models in play for electronic resource management and discovery.

View Citation
Publication Year:2016
Type of Material:Article
Language English
Published in: Smart Libraries Newsletter
Publication Info:Volume 36 Number 02
Issue:February 2016
Publisher:ALA TechSource
Series: Smarter Libraries through Technology
Place of Publication:Chicago, IL
Record Number:21673
Last Update:2022-11-29 00:34:54
Date Created:2016-06-13 16:46:28