I used the subtitle “Power Plays” for the 2016 Library Systems Report published in American Libraries. In covering a variety of events in the library technology industry, the key theme that jumps out is the competition among the top layer of companies that provide technology or services to libraries. The article highlighted the strategies of EBSCO and ProQuest, which both offer an interwoven set of products including content offerings, discovery services, library resource management systems, analytical tools for assessing collection impact, and platforms to acquire collection resources. While EBSCO and ProQuest both deal with all types of libraries, both focus somewhat more on academic libraries.
In this issue of Smart Libraries Newsletter, our attention turns to Follett Corporation, to which many of the same dynamics apply, but its concentration is PreK-12 schools as well as higher education. Like EBSCO and ProQuest, Follett potentially addresses the entire chain of supply and consumption of information resources in the institutions it serves. Unlike EBSCO and ProQuest, Follett channels its efforts at least as much on the broader administration of educational organizations as on their libraries. Student information systems, wholesale distribution of textbooks and course materials, and the management of campus retail stores and online e-commerce portals reach beyond the limits of library budgets and into the deeper pockets of the institution itself. Earlier phases of involvement in products at the broader institutional level can be seen in ProQuest, through Ex Libris' campus business, which offers mobile-oriented content delivery platform for academic campuses.
Follett's dominant market share in library management products for US PreK-12 public schools is unsurpassed among its peers serving other sectors. The recent internal consolidation within the business units of Follett has made it more difficult to make direct comparisons, but in recent years I estimated the Follett Library Software division to have a workforce and revenues at least five times the size of its nearest competitor in the K–12 library software market. Follett had both the insight and the resources to make an early transition into Web-based centralized library automation systems with its Destiny library management system. Some of it its competitors, such as Alexandria, are just now making this shift.
The acquisition of Baker & Taylor raises the dominance of Follett Corporation by into an even higher bracket. Not only does this new business increase the revenue of Follett by about $1 billion annually, it has the potential as a catalyst for further expansion of its product lines. Follett has traditionally confined its business activities to the United States. Baker & Taylor, on the other hand, has a large international footprint and a sales force with a presence in almost all international regions. While the initial press announcements offered no specifics, this acquisition positions Follett for expanding the reach of its content and technology products. Likewise, it increases the reach Baker & Taylor products in the schools sector.
Press announcements mention that Follett Library Services will now report to George Coe, incoming top executive for Baker & Taylor, now responsible for a business unit comprising of Follett School Solutions and Baker & Taylor. This arrangement may well pave the way for increased leverage of the technologies Follett created for schools and Baker & Taylor's for public libraries.
Baker & Taylor is also a player in the public library e-book lending arena with its Axis 360 service. Currently Overdrive dominates the US public library e-book market, though its relationship with public libraries can also be seen as complicated, if not somewhat uncomfortable. Overdrive takes the heat for the business arrangements imposed by publishers. Its technology platform and services are both valued and criticized by public libraries, interested not only in more attractive business terms, but also services that better accentuate their identity and enable them to do a better job of engaging their clientele. These libraries generally seek more ownership of their digital content and the ability to deliver access to these materials within their own environments rather than sending users Overdrive. In recent years, Overdrive has responded to this interest by creating APIs for its platform. The recent acquisition of Overdrive by Rakuten, an international corporation based in Tokyo, does little to diminish the level of anxiety of public libraries.
The Axis 360 service developed by Baker & Taylor now places Follett in the thick of the competition of e-book lending for public libraries. Follett's previous experience in providing access to licensed digital resources in the K-12 arena should provide mutual synergies relative to this increasingly critical service for public libraries. E-book lending or other forms of digital delivery of content can be seen as just one of the many areas where the technologies, business relationships, and core competencies of the two organizations have the potential for mutual benefit. While Overdrive's dominance for public library e-lending does not seem to be in jeopardy, it will be interesting keep an eye Axis 360 in this next phase.
The consolidation of companies and products comes with some high-level concerns for libraries. What are the implications when these diverse sets of products are offered under a single corporate umbrella? A closed ecosystem of content acquisition, end-user discovery, and resource management would not be welcomed by libraries. In the consumer arena, companies such as Apple and Amazon work toward almost end-to-end control.
I do not think that the strategic power plays among the top-level library services organizations are working toward such an ecosystem of control. Libraries would have little tolerance for any technology tools that exert a bias in the way that their patrons discover content or in limiting their options in acquiring content for their collections. Rather, I believe that they seek influence and insight. These organizations generally derive more revenue from their content offerings than from library tools for resource management and discovery. None of the companies involved to the extent of my knowledge has crossed the threshold of bias or control. Rather, they aspire to have complementary management and discovery tools. With additional information on internal library workflows and patron discovery preferences generated by these systems, vendors can strengthen their content offerings. Libraries purchase print and electronic resources from a wide variety of providers. Except for very small institutions, it is not likely that a public or academic library would build its collections through a single distribution channel. Within such a multi-vendor environment, any additional data or analytical insight regarding use patterns or library acquisition trends can provide benefits to content providers in strengthening their product lines. The rise of index-based discovery services brings to the fore the presence of broad-based search products that must perform well across diverse content resources, even when the discovery service itself has been developed by an individual content provider. The Open Discovery Initiative is an example of an industry effort to ensure the independence of content providers and these discovery services. But neutrality does not necessarily imply isolation. While offering neutral performance in discovery, these services have the capacity to provide analytical assessment of content products in a way that would help tune their composition and performance. Any such objective data can be useful when it comes time for libraries to renew subscriptions or review their portfolio of content offerings. For companies such as EBSCO and ProQuest, having a position in the discovery arena brings at least some level of strategic advantage to their content business.
A parallel set of dynamics can apply to staff workflow tools. Content acquisition platforms such as GOBI, which EBSCO acquired from YBP Library Services and MyiLibrary, which ProQuest acquired from Ingram Content Services, aim not to dominate any given organization as exclusive channels of content acquisitions, but to function within a multi-vendor environment. These tools also provide important insight into the internal workflows of libraries as they acquire materials for their collections. Follett may see similar dynamics intertwined among its Destiny Quest discovery environment, its TitleWave content acquisition platform, and its Destiny resource management system.
The parallels of these top-tier companies with involvement in content providers, resource management, and discovery are striking. As the forces toward industry consolidate move forward, the entanglements of these diverse layers of products will only increase. It will be important for libraries to be increasingly aware of these complex dynamics.