The library-technology industry is coming into a new phase that's characterized by consolidation of companies into enterprises spanning sectors that previously operated separately. This differs from earlier consolidation phases in which companies focused primarily on a given area of activity and expanded through the acquisition of direct competitors. The current phase has not come about abruptly, but recent events have brought the trend into sharper focus: In the library-technology sector, companies are expanding their scope of involvement across diverse business activities. In this context, the acquisition of Ex Libris Group by ProQuest marks a significant change in the business landscape.
Technology Company Consolidation
We can see a long process of consolidation in the library-technology sector playing out over the last couple of decades. Looking back into the 1980s and 1990s, there's quite a fragmented industry. A large number of companies offered ILSs and related products. These companies were relatively small in comparison to today's industry leaders. The products they offered were not especially differentiated. While there were some distinguishing qualities among the ILSs, they all followed a remarkably similar functional model. As the category of ILSs matured out of the 1970s and into the 1980s, the mold was cast: Most products included modules for circulation, cataloging, acquisitions, serials management, and authority control, as well as an online catalog. The features offered by each of these modules evolved similarly among the diverse vendor offerings, driven by the boiler-plate request for proposals (RFPs) employed by procurement processes. The RFPs provided a pragmatic way for libraries to be sure that the products provided the functionality expected. But at the same time, this left little room for any company to color outside of the lines and develop automation systems that may have supported libraries according to differing visions of workflow or functional organization.
This fragmented environment of undifferentiated systems-operating in a finite business economy-set the stage for consolidation. Companies can grow in a couple of different ways. They can organically increase their revenue and incrementally build capacity by winning over new cus-tomers year-by-year. This is a slow process, especially in a highly fragmented environment that gives libraries lots of choices about which brand of software to acquire, but in a way that distributes sales across a large number of companies with the result that none gain the capacity to produce substantial innovations. The ILSs, at that time, became stagnant in a procurement environment that did not reward innovation. The ILS earned its reputation as an unimaginative approach to library automation, shaped as much by the way that libraries demanded functionality as by their developer's ability to address operational requirements more creatively.
Companies can also grow through acquisition. Those with the cash or financial backers with that cash can buy out a competitor. Thus began a process of consolidation among direct competitors that defined the industry for a couple of decades. The products of that process include the following:
- SirsiDynix. Sirsi Corp., which had previously acquired DRA (which had previously acquired MultiLIS and INLEX), acquired Dynix Corp., which was previously named epixtech, previously called Ameritech, which had acquired Dynix Systems, NOTIS Systems, DataPhase, LS/2000, and the remains of other failed products of the 1980s, and most recently EOS International, which had previously acquired IME
- Innovative, which acquired Polaris (which began as Gaylord Library Systems), VTLS, and SLS Information Systems
- Ex Libris, which acquired Endeavor Information Systems and Dabi
- OCLC, which acquired PICA (formerly Stitching Center for Library Automation), Fretwell Downing Informatics, Sisis Informationssysteme, Amlib, BOND GmbH (which previously acquired Härtel & König and Keufel & Kriete), and, most recently, HKA
- Follett School Solutions, which had acquired Sagebrush Corp., which had previously acquired Nichols Advanced Technologies
Out of this acquisition process, today's library technology giants emerged. Although merging many different businesses, product consolidation usually took a slower pace. Even among similar products, moving from one to another involves considerable effort and expense for a library, and it's especially resented when the move is deemed lateral instead of progressive. Taking advantage of the substantially reduced cost of business achieved in a merger, companies usually set very long road maps for any product strategy that would eventually mean the demise of acquired products. Any that abruptly disrupted existing product trajectories were soundly punished in the marketplace. In some cases, consolidation brought the resources to create entirely new products, while others focused development on a single flagship product to gradually displace those gained through acquisition. While it's always a slow death, many of the products launched in the 1980s have become extinct, with legacy products of the 1990s becoming endangered.
Consolidation brought together companies, which produced ILSs, but it also generally was focused by library sector. Ex Libris' acquisitions kept to the academic and research library's sphere. Follett absorbed its competitors that were oriented to K-12 libraries. SirsiDynix and Innovative had originally developed their respective ILSs for a mixed customer base of academic, public, and special libraries and acquired other companies with similar profiles.
Content Company Consolidation
In parallel with the consolidation within the library-technology industry, another set of companies-traditionally oriented to content products for libraries-were being assembled at a much larger scale and with more impact. The players in this content-oriented industry of particular interest are EBSCO and ProQuest, since they have become more intertwined with the library-technology sector. Others include Elsevier and Gale.
Both EBSCO and ProQuest have very complex corporate histories that resulted in companies in which content products represent a core activity, supplemented by an ever more diverse array of products and services with direct and indirect synergies. Although the companies share patterns, they differ substantially. EBSCO is a family-owned business with little to no debt. ProQuest has a complex ownership structure, including both family and investors, and is a highly leveraged company.
EBSCO Information Services has an especially interesting corporate heritage that blended services to help libraries acquire content with the creation of content products from its start. The company traces its beginning to a magazine subscription service, which evolved and expanded over a few decades to include abstracting and indexing services. The EBSCO/iosi platform is populated with a vast range of products created in-house and licensed from external organizations. Skipping over its many content-related deals, EBSCO developed or acquired a variety of products and services related to the management and access of library resources. The company's EBSCONET platform takes forward the long-established tools for managing print and electronic subscriptions to journals and periodicals to include other aspects of electronic-resource management. During the phase in which OpenURL-based products were of particular interest, EBSCO created its own knowledgebase and link resolvers. Now that indexbased discovery services have become a critical component of a library's technical infrastructure, EBSCO Discovery Service (EDS) has taken the dominant position in terms of implementations. EBSCO recently acquired YBP and its GOBI8 platform that's used by libraries for selecting and ordering monographs.
Apart from GOBI3 and its established tools for subscription and electronic resource management, EBSCO has not joined the ILS arena or that of the newer category of library services platforms. Rather, the company has focused its strategy on what it has articulated as a discovery services platform as the basis for the essential infrastructure for a library, which can integrate with any of the existing resource management products available. EBSCO has formed partnerships with dozens of ILS companies for the integration of EDS into their products.
ProQuest, though a slightly smaller company than EBSCO, has seen its own expansion with some similar patterns. From its initial products and services based on microform, the company has steadily built a portfolio of content products that place it within the ranks of the leaders. ProQuest has been especially active in the technology sector for the last decade, with increasing overlap with companies developing ILS products. It acquired Serials Solutions in 2005, a rising star in the electronic-resourcemanagement arena.
Serials Solutions initially operated relatively independently, with a firewall in place to maintain neutrality between its resource management and access tools and ProQuest content. This separation was especially emphasized with the launch of Summon as the first index-based discovery service. Over time, that organizational divide was dismantled, with these products now part of what became ProQuest's Workflow Solutions and the sunset of the Serials Solutions brand. ProQuest recently acquired Coutts and its MyiLibrary platform, tapping into the monograph acquisition channels. On the academic ebook front, it acquired ebrary and EBL, which have recently coalesced into a new Ebook Central platform.
Content Technology Merger
The library services platform became established as a new genre that diverged from the entrenched ILS model. Ex Libris led the way with its "unified resource management" concept instantiated in Ex Libris Alma, which has become the dominant product. On only a slightly later track, OCLC developed its WorldShare Management Services, which is oriented in broad terms to some of the same concepts, but is uniquely able to leverage the massive WorldCat bibliographic service. Other companies, such as Innovative, launched products with aspects of this new paradigm, but retained much of the established workflow and business logic. ProQuest announced its strategy to create a library services platform called Intota, which fully embraced the concept of comprehensive resource management, distinguished by shaping workflows in ways that it anticipated would result in even more efficiencies than the now-established competitors in this genre.
The pattern of consolidation among peers in the library-technology sector has been disrupted by the acquisition of Ex Libris by ProQuest. But this event only accelerates a dynamic that would have played out more gradually as ProQuest brought its own Intota product to market. But instead of a content company launching a library services platform that would have come in a bit late and struggled to gain market share, ProQuest immediately takes a dominant position. It has gained the leading product in that genre under its umbrella, along with a portfolio of technology products of proven and potential interest to academic and research libraries. (Keep in mind that although a definitive agreement has been executed, the merger deal has not closed as of this writing.)
The success of technology products for academic libraries heavily invested in electronic resources depends on content components such as knowledgebases and discovery indexes. Ex Libris was able to create and maintain these components at a very competitive level as an independent company. In league with ProQuest, its capacity in this area at least doubles. Companies that produce content products such as EBSCO and ProQuest have a built-in advantage for creating knowledgebases and discovery indexes. I see both Primo and Summon significantly benefiting from this now-concentrated capacity.
This merger is part of the longstanding pattern of top-tier library supply companies, of which EBSCO and ProQuest are a subset. These companies have been expanding through a diversified set of products and services parallel to the consolidation among the technology suppliers. Now that these two movements have intersected, the degree of change and impact remains to be seen. We can anticipate that the strategies of Ex Libris will remain largely in place under ProQuest as before. It would not make business sense to disrupt what has proven to be an enormously successful combination of product and business strategies. But the level of resources in play has been amplified.
In the technology sector, several companies were assembled via these rounds of mergers. The companies at the top were of similar size, though with increased divergence relative to product strategies and library customer profiles. That balance of power has been altered as Ex Libris, already in the top tier, becomes part of an organization multiple times as large. It would not be entirely unexpected for there to be subsequent events during the next year or so that may further repaint the landscape.
The business dynamics underway are a world apart from the fragmented scene in which the library-technology vendors previously played. The stranglehold of the ILS has been broken. It has been replaced by a new set of products that offer substantively different visions in the way that they support the operation of libraries and the acquisition and management of collections, as well as patron-facing services. There have been more open-minded procurement processes that lay out a basic set of expectations and that enable developers to respond with products created under new conceptual frameworks, deployed on platforms consistent with modern technology architectures.
In the fragmented environment of small-to-midsize companies, none had the capacity beyond developing software that reasonably matched competing solutions. The leading companies have development teams of size and capacity not previously seen in the industry. The creation of products such as library services platforms and index-based discovery services require the development of software more sophisticated and complex than was ever imagined in the ILSs and online catalog arena, as well as also the creation of knowledgebases and indexes that, in themselves, require enormous investments in human and technical resources.
I have previously noted the trade-off between a limited range of options for libraries and the potential for innovative products created by organizations with ample resources. As the stakes rise to even higher levels, libraries will assess the innovation and effectiveness afforded by these products. The number of viable options has already narrowed beyond the level of comfort for many libraries. While I'm optimistic that the current slate of products demonstrates more power and sophistication than that of previous generations, libraries will ultimately judge success through the products in which they choose to invest. It will be interesting to observe whether this new phase of the industry is able to deliver products and services out of these new synergies that are able to benefit libraries. It's not too late for new alternatives to emerge should those expectations not be met.