The library technology industry comprises multiple distinct sectors. It is segmented by type of library and by geographic regions. Distinctive assortments of companies and vendors compete within each geographic region. Languages and economic levels favor different selections of products. While the global vendors have some presence in almost all global regions, most countries also have a set of specialized local vendors. Sectors defined by library types have even stronger demarcations of products and vendors. Public, academic, school, and special libraries have increasingly diverged in the shape of their collections and the essence of their services. Each require substantially different technology support. This section takes a closer look at the market dynamics of the academic and public library sectors in the United States.
Academic Library Sector
The academic library sector in the US represents one of the largest opportunities for library technology vendors, with an estimated economic potential of around $160 million. This sector cannot be considered entirely monolithically, but rather through many distinctive layers. The needs of the libraries serving large research universities differ enormously from those associated with four-year colleges, community colleges, or specialized professional schools.
A relatively small set of companies participate in the US academic library sector, including Ex Libris, Innovative Interfaces, OCLC, and SirsiDynix with a limited number of institutions using Koha or other open source products. Ex Libris has built a very strong lead among its competitors in this sector, with OCLC as a secondary competitor, and most of the remaining vendors losing ground.
Overall, Ex Libris holds a 49 percent market share for all academic libraries in the United States, regardless of size, counting those using Alma, Aleph, or Voyager. Innovative has a 14 percent share, counting all Sierra and Millennium sites. Of the 235 US academic libraries with collections over 1 million volumes, 63 percent use Ex Libris products and 23 percent use an Innovative ILS. Among the 1,260 mid-sized academic libraries with collections over 100,000 volumes, 45 percent use an Ex libris ILS and 21 percent use Sierra or Millennium. Much different patterns apply to smaller academic libraries with collections less than 20,000 volumes. Among this group, 12 percent use an Ex Libris product and 8 percent depend on an ILS from Innovative.
OCLC's WorldShare Management Services has been implemented by 10 percent of all US academic libraries (307 out of 2,955); 11 percent of mid-sized Academic libraries in the US; 4 percent of those with collections over 1 million volumes; and 15 percent of US academics with collections over 100,000 volumes. OCLC continues to make new sales of WMS every year and its installed base is growing. These figures indicate that OCLC adds a competitive element to the overall US academic library sector, though at a lower level of market share than Ex Libris.
Case Study: Members of the Association of Research Libraries
The members Association of Research Libraries (ARL) includes 123 libraries representing the top layer of the academic technology sector. These libraries have the largest budgets for technology, collections, and personnel, manage the largest collections, and have the most ambitious programs for digital initiatives and resource sharing.
Ex Libris entered the US academic market in 1998, opening its first office in the country and appointing Carl Grant as President for Ex Libris (USA). At the time Ex Libris was marketing Aleph as its flagship ILS. Between 2000 and 2011 the number of Aleph implementations grew to its peak of 26 ARL Member libraries. Voyager, developed by Endeavor Information Systems, was also a favorite among the ARLs. From its introduction in 1995, it saw ARL implementations climb to 35 institutions by 2003 and hold steady until 2013, after which its use steadily declined. Ex Libris acquired Endeavor in 2016, giving it a combined 46 percent market share between Aleph and Voyager. Implementations of Alma began in 2012 and saw adoptions in 73 ARL institutions by 2020. The rise of Alma implementations among ARL members during this period was faster than any other product. Combining Alma, Aleph, and Voyager, Ex Libris currently holds a 72 percent market share among ARL institutions.
Innovative has historically been a strong competitor among ARL members, with its Millennium ILS leading in implementations between 2000 and 2011. Innovative has historically followed an evolutionary product strategy, progressing from INNOPAC, to Millennium, and to Sierra, each based on a common core codebase, but with new layers of technology infrastructure and major enhancements.
Libraries usually pay a new licensing and migration fees to move to the latest product, providing the company new revenues, but also risking the possibility of defections. Innovative hit its peak among the ARLs in 2010 with 40 implementations. In that year transitions to Sierra began, growing to 19 ARL implementations in 2017. Since 2017, Sierra implementations have declined to 14. Innovative's overall market share among ARL libraries has declined from 32 percent in 2011 to 13 percent in 2020.
SirsiDynix has also seen a decline in market share among the ARLs in the last decade. Its Symphony ILS, known as Unicorn until 2007, was a strong player among these libraries, hitting a peak of 20 implementations in 2010. Implementations have declined in the last decade. Horizon, gained in the 2006 acquisition of Dynix, has seen implementations decline from its apex of 10 in 2000 to 2 in 2020. In 2008 SirsiDynix held a 25 percent market share of ARLs, which has since diminished to 8 percent.
OCLC's WorldShare Management Services was introduced in approximately the same time frame as Alma and has attracted a diverse array of academic libraries. Although it was also offered to public libraries in its early implementation period, OCLC now offers it primarily to academic libraries. WMS has capabilities for large libraries. Its presence among ARL implementations grow from 2 in 2014 to 5 in 2020. The overall installed base of WMS has continued to grow since its introduction, though the rate of growth has been uneven and has been concentrated on the mid-level academic libraries. Open source products have not had a major presence among ARL libraries. As of 2020, 1 ARL member has implemented Koha, one is using the legacy Kuali OLE ILS, and 2 have public commitments to implement FOLIO, and a handful of others are expected to migrate to FOLIO within the next two years. None are using FOLIO in production. The strong support and investment of EBSCO Information Services in FOLIO strengthens the potential of FOLIO as a factor in this sector, though lacking actual implementations, its competitive impact is only theoretical at this point.
In broad terms, Ex Libris Alma ranks as the strongest contender among the ARL member institutions by far. Its rise has been fast and has been fueled both by its own legacy ILS products and by those of its competitors, especially Innovative and SirsiDynix. OCLC's WorldShare Management Services is the only other product with a positive trajectory within this sector. Open source alternatives may be poised to make some gains though much depends on the success of pending implementations.
ILS Implementations among ARL Members (all systems)
US Public Library Sector: Urban Library Council Members
The public library sector in the United States has been more evenly divided among products and vendors with no single product dominating. There are about 9,460 public libraries in the US with a total of 16,901 branch facilities.
An examination of the ILS products implemented among the Urban Library Council (ULC) members gives a similar representation of the high end of the public library technology market as the ARLs do for the academic library sector.
The Urban Libraries Council represents the higher end of the public library sector. These libraries serve urban population centers, though membership criteria are not precisely defined.
The libraries.org directory has a designation for ULC, which has not been consistently aligned with current membership.
As such, this designator can be taken as a broad indicator of trends in the higher end of the public library technology market, though not necessarily a precise reflection of this group. In 2014, for example, the number of libraries designated as ULC members increased from 135 to 179. The membership may have changed more gradually, but the designations in libraries.org were systematically updated in 2014.
Data available in 2000 showed that Innovative had placed its Millennium ILS in 37 ULC member libraries. This number steadily increased until the introduction of Sierra in 2009, marking a period where Millennium sales began to fall as Sierra sales increased. Installations of these two systems combined captured about 34 percent of ULC members from 2005 through 2014.
SirsiDynix achieved its highest market share in 2005 following the acquisition of Dynix, supporting ILS products in 75 libraries. This merger increased SirsiDynix ULC market share from 24 percent to 56 percent as it gained responsibility for both Dynix Classic and Horizon. This event was the apex of SirsiDynix's penetration in this group, which steadily declined to its current market share of 35 percent.
Innovative likewise hit its peak within this group through its 2014 acquisition of Polaris, which increased its presence among the ULC to 99 members or 55 percent. It has since slipped slightly to 50 percent market share among ULC members. Symphony, Sierra, and Polaris as individual products have seen steady increases in implementations among this group since their respective introductions. Declines of secondary or legacy products, such as Millennium, Horizon, and Dynix Classic led to an overall redistribution of market share.