It's striking that some sectors of the library technology industry are dominated by a single powerhouse vendor. Follett prevails among PreK-12 school libraries with around 80 percent market share. Ex Libris has won the lion's share of new business among research and academic libraries globally. Yet in other sectors, no single vendor stands out in quite that way. Among US public libraries, for example, no single company exceeds a quarter of the market (Symphony = 15 percent; Sierra + Polaris = 24 percent, and Koha = 6 percent).
Even in the parts of the industry where one company has achieved market superiority, none have a monopoly. OCLC continues to represent serious competition to Ex Libris, for example, even though the number and size of its new clients comes in at lower levels. Many academics also continue to use integrated library system (ILS) products from a large assortment of providers, especially Innovative and SirsiDynix. Companies like Alexandria, Book Systems, OPALS, and The Library Corporation continue to retain large numbers of school libraries and make new sales, though vastly overshadowed by Follett.
An interesting set of trade-offs can be seen in the sectors characterized by a dominant player versus those that have more evenly distributed vendors. Through counterintuitive, it seems that dominance results in more innovation compared to the sectors where a more fragmented competition prevails.
One obvious observation relates to the size of companies able to gain a dominant market share. Companies that have amassed a larger customer base gain the revenues needed to support the development capacity to continually enhance core products and spin off new offerings. Follett and Ex Libris have not remained complacent with their core automation products despite quite successful sales; instead, they have gone on to develop products in new areas of functionality of interest to their respective library types. These corporate giants have an appetite for growth in their business that cannot be satisfied just by selling their core product to more libraries but also by seeking out opportunities in lesser explored territories.
The public library sector sees competition, more evenly distributed, among a group of companies of more modest scale. SirsiDynix and Innovative, once thought of as large companies within the industry, are dwarfed by giants such as Follett and Ex Libris / ProQuest. The combination of stiff competition and more limited development capacity has resulted in less aggressive product development within the public library sector. The ILS products used by US public libraries are all quite mature and with less differentiation among competitors. Innovation seems to happen just as much outside of the ILS companies, in companies such as BiblioCommons that focus on a narrower scope of technology-based services.
Vendors focusing on a single sector of the industry appear more likely to dominate in that sector compared to those that compete in multiple sectors. It has proven difficult for the vendors that serve multiple sectors to make breakthroughs in any of those sectors. Developing products to serve all libraries seems essentially like swimming upstream against the current of increased divergence in collections and services prevailing in each type of library.
In broad strokes, it seems like sheer size and contained focus have proven to be elements of success in the library technology industry. Powerhouse companies have the development capacity to create products with the sophistication required to satisfy the needs of most libraries within a sector. Staying within bounds of a specific type of library but looking broadly at organizational needs can also result in new categories of products that can address needs previously not well addressed.
This issue of Smart Libraries Newsletter features another genre of technology dominated by a single powerhouse vendor. Though somewhat adjacent to the library technology industry, anti-plagiarism services have become almost universally deployed in educational institutions. While libraries often play a role in the acquisition and management of these products, the role of these products as a component of the academic support infrastructure and their increasing presence in the scholarly publishing ecosystem draws attention to this genre of technology. Turnitin, which recently saw a change in ownership, embodies many of the trends seen elsewhere. It handily dominates its competitors, having acquired some of them as well as other companies that have expanded its arsenal of products and services. The company has continually expanded the market scope for its products from beyond its initial offering for instructors to check student papers. It now has offerings targeted at students, admissions offices, journal publishers, and the corporate world. Its new ownership by a company with interests in consumer-facing publishing and mass communications brings interesting implications.