Una Introducción a la Industria Internacional de Automatización de Bibliotecas. Marshall Breeding Director for Innovative Technologies and Research Vanderbilt University

Abstract  “An introduction to the international library automation industry” which will present information on the major companies and products, trends such as business consolidation, globalization, and company performance.

Vanderbilt University Library

Library Technology Guides   Repository for library automation data  Lib-web-cats tracks 38,000 libraries and the automation systems used. –Expanding to include more international scope  Announcements and developments made by companies and organizations involved in library automation technologies

¿ Quienes es Quienes?  Koha –Open Source ILS  Pérgamo –Commercial ILS software –Distributed by WalySoft  Aguapey –Biblioteca Nacional de Maestros –ILS por bibliotecas de las escuelas  Marco Polo  Catalis  Punto Biblio  SiGeBi – CONABIP –Systema de Gestion Bibliotecaria

¿ Quienes es Quienes? (cont)  Dominant software used by libraries and information centers throughout Latin America  Distributed without cost by UNESCO  Many different programs: –CDS/ ISIS –WinIsis –Wwwisis  Open Source ILS under development –ABCD

ILS from Global Automation Companies  SirsiDynix Unicorn –Pontificia Universidad Católica Argentina  Ex Libris ALEPH 500 –Universidad de San Andres

OCLC  Not a major factor for most libraries in Argentina

Observations about Library Automation in Argentina  Small fraction of libraries use commercial products from global vendors  Very little involvement with OCLC  CDS/ISIS software prevails  Interest in open source for new projects  Most libraries automate independently rather than cooperatively

Impact of Politics and Geography  Each Region of the world has its own specific needs  Resources available for library automation vary  Library automation needs and capacities varies by geographic, political, and economic situation  Tremendous variation within each region –Many small, rural libraries in the United States remain without automation –In the United Kingdom, the government provides library services to each library

Global Library Trends  Physical collections continue to play a large role, but play a diminishing role  Emphasis on resource sharing  Dramatic increases in digital content  Competition with other information providers on the Web  Library as provider of collaborative learning spaces

Trends (continued)  Technology center for Universities  Integration with other academic information systems –Courseware, Student Records, distance education tools  Library as locus for physical and digital preservation  Custodian for the intellectual output of the academic institution  Question: How true are these trends in Argentina?

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

Automation System Marketplace Annual Industry report published in Library Journal  2008: Opportunity out of turmoil (Mostly North American perspective)  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

Business Landscape:  An increasingly consolidated industry  Venture Capital 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  International: Country-specific companies seeing more competition from international vendors

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

Library Automation M&A History

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

Why worry about who owns the Industry?  Important to determine best long-term partner for strategic library development  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

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  Civica -> 3i Investors (private equity)

Public companies:  Auto-Graphics –De-listed from SEC reporting requirements –Was OTC:AUGR now Pink Sheets:AUGR

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

Revenue sources  License fees for new ILS contracts  Maintenance support –15% purchase cost annually with inflation adjustments  Non-ILS software  Library Services

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 Automated materials handling –Network Consulting Services –Content products –Imaging services

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

ILS Defections  Horizon: 196  Unicorn: 187  Millennium:25  Virtua: 14  Aleph 500:5

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.

Major International ILS products

ALEPH 500  ILS Developed by Ex Libris Group  Specialized system for large academic libraries, national libraries, and consortia  Adopted by libraries throughout the world –Israel, Europe, United Kingdom, United States, Asia, Latin America  Long-term prospects: eventual transition to URM  $$$$

Millennium  ILS developed by Innovative Interfaces  Generalized system for many library types: Academic, Public, Law, Medical  Highly regarded for its technical services sophistication  Geographic Distribution: –United States, Canada, Asia, United Kingdom, Europe, Lain America  Long term prospects: commitment to continued product evolution  $$$$

Voyager  ILS Developed by Endeavor Information Systems, acquired by Elsevier and later Ex Libris Group  Specialized system for Academic Libraries, National libraries  Geographic Distribution: –United States, Australia, Europe, UK  Long term prospects: –better development under Ex Libris than Elsevier –Eventual transition to URM  Minimal new sales

Unicorn / Symphony  ILS developed by Sirsi Corporation, now SirsiDynix  Generalized system for Public Libraries, Academic, Government  Geographic Distribution: –United States, Canada, Australia, United Kingdom, Europe, Latin America  Long term prospects: continued gradual evolution  Significant defection rate  New sales declining.

Horizon  ILS Developed by Dynix Corporation, acquired by SirsiDynix  Generalized system for Academic Libraries, Public Libraries, Special  Geographic distribution: –United States, Canada, Australia, United Kingdom, Europe  Long term prospects: None. Only maintenance development continues  Defection rate high, most libraries will leave this system within 2-5 years

Virtua  ILS Developed by VTLS  Generalized system for Academic Libraries, Public, National, other special libraries  Geographic distribution: –Europe, Asia, Australia, United States  Defection rate high. (NYU, Oxford)  Recent project for ILS to Queens Public Library

Beyond the ILS Other essential library automation products

Link Resolvers  SFX from Ex Libris Group  360 Link from Serials Solutions

Federated Search  360 Search from Serials Solution  WebFeat (acquired by Serials Solution)  MetaLib from Ex Libris Group

Electronic Resource Management  Verde from Ex Libris Group  360 Resource Manager from Serials Solutions  Electronic Resource Management from Innovative Interfaces

Library Automation Companies

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

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

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

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

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 –Infovision (Amlib) –PICA (now 100%) –DiMeMa (CONTENTdm)  ILS companies concerned about competing with a non- profit with enormous resources and the ability to shift costs.

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

Major US Companies not present in Latin America  Follett Software Company –K-12 School library software –Destiny ILS  The Library Corporation –Public Libraries –Library.Solution / Carl.Solution  Polaris Library Systems –Public Companies –Polaris ILS  Auto-Graphics –Public Libraries –AGent

International Library Vendors Advantages and Issues

Stability  Some international vendors may have better means to survive compared to local country businesses  In many regions the global companies have stepped in as local companies decline –Often local companies lack resources to re- develop through technology cycles  Still risky. Mergers and acquisitions can make a big impact

Product sophistication  International companies have large capacity for research and development  Current products offer rich functionality  Support for Unicode and language localization  Ability to automate very complex library organizations

Concerns  Ability to provide in-country support  Software optimized for automation needs of a given region?  Cost. How does the international market price compare to that of local options and open source, and subsidized alternatives?  Long-term continuity of products? –As opportunities decline in the US and Europe, many seek developing world as an emerging market for products

Technology Trends  Open Source Library Automation (Afternoon session)  Next generation library catalogs (Seminar Wed 10 Dec)  Next generation ILS (Seminar Thursday 11 Dec)  Web 2.0 and Beyond (Seminar Fri 12 Dec)

Questions and Discussion