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Analysis of Library Integrated Systems Marketplace

Analysis of Library Integrated Systems Marketplace. 2008 Annual Meeting of University Librarians in Taiwan National Chung Hsing University Library, Taichung, Taiwan May 15, 2008. Three Major areas of interest. The state of the Commercial ILS industry Emerging Interest in Open Source

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Analysis of Library Integrated Systems Marketplace

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  1. Analysis of Library Integrated Systems Marketplace 2008 Annual Meeting of University Librarians in Taiwan National Chung Hsing University Library, Taichung, Taiwan May 15, 2008

  2. Three Major areas of interest • The state of the Commercial ILS industry • Emerging Interest in Open Source • Focus on Next-Generation Library Interfaces • [translate]

  3. Business Trends A look at the companies involved in library automation and related technologies

  4. Automation System Marketplace • Annual Industry report published in Library Journal • 2008: Opportunity out of turmoil • 2007: An industry redefined • 2006: Reshuffling the deck • 2005: Gradual evolution • 2004: Migration down, innovation up • 2003: The competition heats up • 2002: Capturing the migrating customer

  5. Business Landscape: 2007-2008 • An increasingly consolidated industry • VC and Private Equity playing a stronger role then ever before • Moving out of a previous phase of fragmentation where many companies expend energies producing decreasingly differentiated systems in a limited marketplace • Narrowing of product options • Open Source opportunities rise to challenge stranglehold of traditional commercial model • Asia: Country-specific companies seeing more competition from international vendors • [translate]

  6. Other Business Factors • Level of innovation falls below expectations • Companies struggle to keep up with ILS enhancements and R&D for new innovations. • Pressure within companies to reduce costs, increase revenue • Pressure from libraries for more innovative products • Pressure from libraries not to increase costs • Many libraries lack top quality automation systems due to high cost • [translate]

  7. Library Automation M&A History

  8. Consolidation among Libraries for automation - • More libraries banding together to share automation environment • Reduce overhead for maintaining systems that have decreasing strategic importance • Need to focus technical talent on activities that have more of an impact on the mission of the library • Pooled resources for technical processing • Single library ILS implementations becoming less defensible • Essential for libraries to gain increased leverage relative to large companies • Moving toward a smaller number of larger ILS installations

  9. Why worry about who owns the Industry? • Some of the most important decisions that affect the options available to libraries are made in the corporate board room. • Increased control by financial interests of private equity and venture capital firms • Recent industry events driven by external corporate decisions; • Market success and technological advantages don’t necessarily drive business decisions • [translate]

  10. Investor owned companies • SirsiDynix -> Vista Equity Partners (bought out Seaport Capital + Hicks Muse/HM Capital in Dec 2006) • Ex Libris -> Francisco Partners (bought out VC’s in Jul 2006) • Endeavor -> Francisco Partners (bought out Elsevier Nov 2006) • Infor (was Extensity, was Geac) -> Golden Gate • Polaris -> Croydon Company • formerly part of Gaylord Bros (acquired by Demco)

  11. Public companies: • Auto-Graphics • De-listed from SEC reporting requirements • Was OTC:AUGR now Pink Sheets:AUGR • Civica. Public company traded on AIM London exchange • In transition to ownership by 3i Investors, a private equity firm

  12. Founder / Family owned companies • Innovative Interfaces • 100% ownership by Jerry Kline following 2001 buy-out of partner Steve Silberstien • The Library Corporation • Owned by Annette Murphy family • VTLS – tech spin-off from Virginia Tech, wholly owned by Vinod Chachra • These companies not under the control of external financial interests

  13. Revenue sources • New ILS sales • Maintenance support • 15% purchase cost annually with inflation adjustments • Non-ILS software • Library Services

  14. Diverse Business Activities - • Many ways to expand business in ways that leverage library automation expertise: • Non-ILS software: link resolvers, federated search, ERM, portal/alternative Web interfaces • Retrospective conversion services • RFID or AMH • Network Consulting Services • Content products • Imaging services

  15. Libraries Demand choice • Current market narrowing options • Consolidation working toward monopoly? • Many smaller companies currently prosper in the library automation industry • Room for niche players • Domination by a large monopoly unlikely to be accepted by library community • Monopoly would be subverted by Open Source or other cooperative movement • Many countries and regions continue to be served by local companies • [translate]

  16. OEM Partnership strategies - • ILS companies partner with other companies for technologies. • Development resource are not abundant, even in the companies with massive capital support • No library automation company can take on all aspects of development • Tough decisions on what to build vs buy • OEM arrangements can increase cost, increase flexibility, and decrease control

  17. Partnerships - • Increasing number of partnerships with specialist companies: • Serials Solutions • TDNet • MuseGlobal • WebFeat • Openly Informatics • Medialab Solutions

  18. Companies more self-reliant - • Tend to develop products through their own development efforts relying less on technologies licensed from third parties • Examples: • Innovative • Ex Libris • Better integration, more control, now pass-through costs

  19. Business Development Strategy • Essential to understand the strategic business plans of the company • Long term growth? • Short term profits? • Growth through M&A • Organic growth by attracting new customer libraries • Positioning for sale? • Get past press releases and spin and look closely at the corporate behavior. • [translate]

  20. Library Automation Companies

  21. Taiwan ILS sector

  22. Global Companies in Taiwan • Innovative Interfaces (21%) • Civica: Spydus (15%) • SirsiDynix: Horizon (14%) • Ex Libris: Aleph 500 (5%) • VTLS: Virtua (2%)

  23. Innovative Interfaces • Privately owned by one of this founders • No involvement with VC or Private equity • No recent involvement in M&A • Acquired SLS in 1997 • Evolutionary Product strategy • Innopac -> Millennium beginning in 1995 • Millennium as core technology • Encore, RightResults, ResearchPro

  24. Ex Libris • Global provider of software to Academic Libraries • Largest in the academic market • Owned by Francisco Partners • Acquired Endeavor in Nov 2006 • Strong focus on non-ILS products: • SFX – MetaLib – Verde – DigiTool – Primo • Continues to support and develop ALEPH and Voyager

  25. SirsiDynix • Highly consolidated company • Sirsi Corp, Dynix, DRA, MultiLIS, INLEX/300, Docutec, OCLC Local Systems, DataPhase, Electric Memory, NOTIS Systems • Largest in the industry • Owned by Vista Equity Partners • Previously supported by VC: Seaport Capital, Hicks Muse) • Consolidated company working toward consolidating and integrating products and business units. • Recent announcement for single Unicorn-based ILS

  26. Civica • UK Company; library automation unit based in Australia • Recently purchased by 3i private equity firm • Large company with software products across several sectors, specializing in systems for public governmental authorities • Spydus library automation system one of many business units • Originated in Australia, deployed in many other geographic regions

  27. Taiwan Companies • Transtech: • Totals II (Technically Opulent TRANSTECH Automation Library System) • 31% share of major academic libraries in Taiwan • Distributes federated search system based on technology licensed from MuseGlobal • Distributes OCLC WorldCat Link Manager WCLM • Formerly 1Cate link resolver from Openly Informatics

  28. Top Information Technologies • Provider of library automation technologies to Taiwan for over two decades • Distributor for Ex Libris • ALEPH, SFX, MetaLib, etc • Distributor for Spydus (previously Urica) since 1985 • Torica

  29. OCLC in the ILS arena? • Increasingly overlapped with library automation activities • WorldCat Local recently announced • Penetrating deeper into local libraries • Library-owned cooperative on a buying binge of automation companies: • Openly Informatics • Fretwell-Downing Informatics • Sisis Informationssysteme • PICA (now 100%) • DiMeMa (CONTENTdm) • ILS companies concerned about competing with a non-profit with enormous resources and the ability to shift costs.

  30. Cambridge Information Group • Increasingly involved in library automation arena • ProQuest: • Serials Solutions • WebFeat • AquaBrowser (Academic, North America) • R.R. Bowker • AquaBrowser (worldwide) • Syndetic Solutions

  31. Major US Companies not present in Asia -

  32. Follett Software Company - • Consolidated company focused on K-12 school library automation • FSC, Sagebrush Corporation, Winnebago Software, Nichols Advanced Technologies, Card Catalog Company, Scribe • Privately owned; division of Follett Corporation • Destiny as flagship system for centralized automation of districts • Legacy: Winnebago Spectrum, Athena, Circ Plus, InfoCentre • Accent – OEM of Unicorn offered by Sagebrush withdrawn

  33. The Library Corporation - • Family owned and managed • Focused on public libraries • Acquired Carl in 2000 • Acquired Tech Logic in April 2005 • No involvement by VC or Private Equity • Carl division slipping in market share • Presence in Singapore

  34. Auto-Graphics - • Founded 1950 • Evolved from traditional publishing services company to focus on library automation • Publicly owned company (Pink Sheets)

  35. Polaris - • Privately owned and funded by Croyden, a small holding company • Martin Blackman • Morris Bergreen (deceased Jul 9, 2001) • Formerly part of Gaylord Bros • Gaylord Information Systems, GIS Information Systems (May 2003) > Polaris Library Systems • Focus on U.S. Public Libraries • Products based on Windows-based technologies

  36. Open Source Software An Emerging Trend in the Global ILS Arena

  37. Open Source Alternatives • Explosive interest in Open Source driven by disillusionment with current vendors • Beginning to emerge as a practical option • TOC (Total Cost of Ownership) still roughly equal to proprietary commercial model • Still a risky strategy for libraries • [translate]

  38. An industry in turmoil • Disruptions and business decisions to narrow options have fueled the open source movement • Benefit to libraries in having additional options • Traditionally licensed and open source ILS alternatives will coexist in the ILS arena • [translate]

  39. Open Source ILS enters the mainstream • Earlier era of pioneering efforts to ILS shifting into one where open source alternatives fall in the mainstream • Off-the-shelf, commercially supported product available • Still a minority player, but gaining ground • [translate]

  40. Current Open Source ILS Product Options

  41. Koha: first Open Source ILS • Koha + Index Data Zebra = Koha ZOOM • Components: • Perl • Apache • MySql • Zebra: search engine option for larger installations

  42. Libraries committed to Koha - • 300+ libraries • Horowhenua Library Trust • Nelsonville Public Library • Athens County, OH • Crawford County Federated Library System • 10 Libraries in PA • Howard County, MD • Service area population: 266300 • 4.7 million circulation transactions in 2006 • 1 million volumes • Central Kansas Library System • Santa Cruz Public Library • Central, 9 branches • 2 million volumes • Near East University Library • 1.5 million volumes

  43. Evergreen • Developed by the Georgia Public Library Service • Small development team • June 2004 – development begins • Sept 5, 2006 – live production • Streamlined environment: single shared implementation, all libraries follow the same policies, one library card

  44. Libraries using Evergreen • Georgia PINES • http://gapines.org • Georgia PINES: • 1 Installation • 54 Public Library Systems • 260+ library facilities • Does not include municipal systems: Atlanta-Fulton County, Cobb County • Province of British Columbia in Canada – Northern PINES • Kent County, MD • Under consideration by academic libraries in Canada

  45. Evergreen

  46. OPALS • Open source Automated Library System • http://www.mediaflex.net/showcase.jsp?record_id=52 • Developed and Supported by Media Flex • Harry Chan • Original developer of Mandarin • Installation ($250) and Hosting services ($750) • South Central Organization of (School) Libraries • consortium of K-12 school libraries in NY

  47. NextGenLib • ILS designed for the developing world • Originally traditionally licensed, introduced 2003 • Transition to Open Source in Jan 2008 • 122 Installations (India, Syria, Sudan, Cambodia) • Collaborative project: • Kesavan Institute of Information and Knowledge Management • Versus Solutions • Versus IT Services Pvt. Ltd • http://www.librarytechnology.org/ltg-displaytext.pl?RC=13150

  48. ILS Deployments

  49. Commercial Involvement Companies formed to support open source library products

  50. The Open Source Business Front • Index Data • Founded 1994; No ILS; A variety of other open source products to support libraries: search engines, federated search, Z39.50 toolkit, etc • LibLime • Founded 2005. Provides development and support services for Koha ILS. Acquired original developers of Koha in Feb 2007. • Equinox. • Founded Feb 2007; staff formerly associated with GPLS Pines development team • Care Affiliates • Founded June 2007; headed by industry veteran Carl Grant. • MediaFlex. • Longstanding school library automation company. Latest generation ILS developed in open source model

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