Automated System Marketplace reviews
From Independent Study: Library Automation
Automation System Marketplace Reviews
2007
Marshall Breeding reports that in 2006, the automation system marketplace grew compared to previous years, with total revenues approaching $570 million. Companies found the system migrations, web interfaces, and RFID products to be main areas of profit.
In 2006, open source products also grew in prominence in the ILS market. When many public libraries in Georgia changed to Evergreen, they increased interest in such open source ILS products. Koha, now run by LibLime, is another emerging open source ILS product.
OCLC also increased its role by acquiring DiMeMa, which develops the CONTENTdm, an "application for managing digital objects." OCLC now oversees various automation products and also increases its reach by making part of WorldCat open to the public.
The SaaS model is also increasing in prominence. This refers to a vendor hosting and maintaining the software for their ILS so that the library doesn't have to maintain the software itself. With increased interest in this model, the price will become more reasonable.
When it comes to user interfaces, the focus has been on how to draw in popular features on the web that include users more. For instance Aquabrowser is a compelling product for its use of tag clouds. Encore also uses tag clouds as well.
In terms of the library automation market as a whole, the large companies of SirsiDynix, Ex Libris, Endeavor, Follett, and Sagebrush dominate the market, but smaller companies stay alive by offering unique services. Private equity firms rather than venture capitalists are the major backers.
Managing electronic content is one of the largest challenges that libraries and ILS vendors face. Link resolvers and the like are becoming important, if not absolutely necessary. Some products include Serials Solutions and SFX.
In the future, electronic content management and web-based services will be key to the development of automated library systems. Open source models might disrupt the business models of the current leading companies, however.
2006
In 2005 the market's revenues totaled approximately $535 million, which represented modest growth. Breeding predicts that by 2009 most public and academic libraries in North America will have automated systems, which will allow the ILS market "to enter a new phase."
There is movement toward merger on all fronts: smaller libraries are tending toward joining consortia in implementing an ILS, and vendors themselves have merged together to create larger companies. Vendors often woo libraries over to their side; there is less vendor loyalty than there used to be, evidently. Companies also stay afloat by offering more products that just an ILS. Ex Libris, for instance, offers SFX, MetaLib, Verde, and Primo in addition to its ILS, Aleph.
Vendors are also making headway in designing OPACs that are "web-savvy." WebPAC Pro and SirsiDynix Portal Solution are integrated OPACS that are appealing to many.
In terms of services to users, libraries are also looking for a way to search all their resources at once-- i.e. metasearching. Products such as WebFeat and MetaLib are examples of such a product, and One Search and Pinpoint are available for the school markets.
On the business end, SirsiDynix was created when Dynix was acquired by Sirsi. Now the new company is larger than Innovative and offers more products than the separate companies did on their own. OCLC also acquired Openly Informatics, and its European subsidiary, OCLC PICA bought Sisis Informationssysteme and Fretwell-Downing. Ex Libris also tried to go public at the London stock exchange, but the value of the stock was not high enough to begin with, so that possibility was put aside for the time being. Breeding writes that the library automation marketplace as a whole acted quite conservatively in 2006, with only one major change being the merger of Sirsi and Dynix.
2005
In 2004 the industry grew about 5% compared to 2003. Breeding credits a strong economy, "mandatory migrations," and new products for managing electronic content for this growth. Companies must not only acquire new libraries as customers but also maintain those contracts. International markets offer a new range of customers. Libraries often switch to a different vendor. Breeding offers the formula that companies must be aware of: "New-Name Sales minus Legacy Losses (plus Flagship Defections) equals Net Gain/Loss." TLC, Sirsi, and Dynix were the leaders in the field. The industry has 33 companies, but 10 of those dominate with 80% of the revenues. Somehow the smaller companies stay afloat by offering more cost effective systems to smaller libraries.
Some companies also offer the ASP model, or Application Service Provider. Here the company takes care of hosting the automation system so the library doesn't have to do this on their own. Other services include metasearching functions, link servers, and collection management services.
In 2004, BiblioMondo was acquired by ISACSOFT, which allowed them to "expand its market of content-based learning systems."
Other major business developments included Google's IPO and their movement toward the library world with Google Scholar. Additionally, MediaLab Solutions BV's AquaBrowser offers possibilities for transforming library OPACs.
A new consortium was created, Vendor Initiative for Enabling Web Services (VIEWS), which aims to promote dialog between various companies. Book vendors, courseware systems, and ILS companies can provide better services by being in communication. So far there was limited development of actual products as a result of these discussions.
Library administrators can use new tools like LibraryDECISION and Normative Data Project to help in decision making. Such products gather information such as demographic, collections, and budget data to bring important information all together.
The K-12 market suffered this year because so many school libraries are already automated. School systems also required centralizing of IT services, so libraries have less choice in picking products than they used to.
Two new all-web-based products released included Liberty3 (by Softlink) and Genie (by Inmagic).
2004
2003 was a hard year for the library automation industry with both private and public funding falling. Revenues and employment in the industry were down on account of this "contraction," and companies received fewer contracts than in previous years.
Several companies lead in the field, including Innovative Interfaces, Dynix, Sirsi, Ex Libris, and GIS Information Systems. And in 2003, Corporate Networks acquired Insignia, a Canadian company. And in other major business news, Ex Libris hired a new CEO for the comany as a whole and also for the US division.
From the library end, there has been movement towards forming consortia of libraries in order to implement ILS products. This way libraries can pool financial and human resources in supporting the work of the ILS.
Follett and Sagebrush continue to dominate the K-12 market. Public libraries are looking for products that provide access and are efficient. The possibility of RFID is interesting to many libraries. The ASP (application service providers) option also interests libraries who want to outsource the work of maintaining their ILS.
The largest challenges for both libraries and the automatated systems market are managing electronic resources and developing metasearch tools. For instance, Ex Libris has been successful in offering SFX and MetaLib to non-ALEPH users, which allows them to add more business.
2003
Companies are needing to diversify the services they offer beyond simple library automation. Some new services include digital library systems, linking products, and federated searching. But ILS systems are still responsible for the bulk of the revenue for library automation companies in 2002. The overall market did not improve or decline dramatically in 2002. Innovative Interfaces, Sirsi, Endeavor, and TLC were the leaders in the field with the most sales.
The management of companies including Dynix and Sirsi changed, in both cases with new CEOs from outside of the industry.
Companies struggle to keep their customers: those that do have a better standing in the field. For instance, Sirsi got new customers with its Unicorn product. Companies also need to develop new products that manage electronic content/digital libraries and that provide linking services between resources.
Follett and Sagebrush dominate the school library market, although TLC announced a new product for school libraries called SchoolLibrary.Solution.
Companies are experiencing pressure to develop products that are interoperable: an ILS that works together with external systems. For instance, a web-based OPAC should allow patrons to renew their loans. There might be official interoperability supported by following standards such as NISO Circulation Interchange Protocol (NCIP). Digital library products such as Ex Libris' DigiTool are also in demand.
ILS systems are also moving toward metasearching, the ability to pull results from multiple sources. Non-ILS vendors and ILS vendors alike are working on this market. Academic libraries are also interested in reference linking, which would make it easy to check citations. An OpenURL standard would be necessary in order to make reference linking feasible. A NISO committee is working on such a standard.
2002
In 2001 the library automation market grew by 17% and was dominated by large, international, privately owned companies. The top ten companies earn 73% of the industry revenues.
One of the challenges for library automation companies is that libraries demand increasing sophistication in the products needed but work with limited budgets. This requires companies to offer other services as well in order to maintain a profit.
In 2001, Sirsi acquired DRA (Data Research Associates) for $51.5 million. Sirsi thus gained about 1000 possible customers through the take-over, although they'll have to compete with other vendors to for these customers.
Of the companies participating in the survey, 2001 revenues are estimated at $530 million for the industry. This is 17% higher than that of 2000. Most companies did not reveal their exact income, so numbers are based on the ranges reported, rather than precise numbers.
There is major movement toward libraries forming consortia in order to purchase their software. Eight companies reported having 42 consortia as coustomers. And these 42 consortia represent 3380 individual libraries.
Libraries continue to move away from old systems including Dynix, DRA Classic, MultiLIS, PLUS, ADVANCE, BookPlus, VTLS Classic, GALAXY, and INLEX.
Many companies in the automation market are international. For instance, Endeavor is a subsidiary of Elsevier (Netherlands) and Ex Libris is headquartered in Israel. Companies need to beyond ILS services and offer reference linking products, digital library products and the like. 19 companies of those surveyed also reported offering web-based OPAC products. Other new features include metasearch capabilities, which are made possible through Z39.50, SQL, and HTML parsing. 14 companies offer reference linking products.
More companies now offer an ASP service, which offers libraries the service of setting up and maintaining their ILS. For instance, EOS International offers the E-Library Service and CASPR offers LibraryCom.com.
Another development in the field is the impact of the Open Archives Initiative (OAI). Federated search products are needed in order to effectively search databases that are open.
2001 (by Jeff Barry)
In 2000, major news for the market included Elsevier acquiring Endeavor and TLC acquiring CARL. Some people are concerned that Elsevier is playing too large a role in the electronic information world, since they already demand so much money in the pricing of scholarly journals. On the other hand, it is good to have Endeavor now funded by a financially stable backer. And this merger might represent a trend in the union of content providers and system vendors; good may emerge from these constituencies working together.
In terms of profits, the year started slowly since many libraries had already expended their budgets with Y2K upgrades. In 2000, estimated revenues for the industry based on the survey totaled $440 million, but there were few responses to the survey-- only 19 respondents, compared to 26 responding the prior year. Of those responding, Innovative Interfaces had the largest revenue. Software covered 48% of revenue, and maintenance and service accounted for 29% of revenue.
Companies are experiencing pressure to add more content to their products, such as personalization features and book reviews. Sirsi's iBistro is one such product. It imitates the Amazon site a bit in that it adds reviews, TOC, and book images into the listing for a title. TLC has released "YouSeeMore," and Innovative has a MAP product as well. Companies have great hopes for such products. The CEO of BiblioMondo, Todd Joron, says he "thinks that 'libraries will become the world's digital points of presence' by providing a variety of online content."
Another major development is support for OpenURLs, a neutral standard for linking resources. SFX is one such product that facilitates such linking. Ex Libris promotes SFX as a means to link between various interfaces and resources.
Discussion also surrounded the possibility of demand for e-books. Vendors must determine how to integrate them into their products if they are, indeed, desired. At this point, only Sagebrush has joined the Open E-Book Forum. Perhaps e-books will be most helpful for reference titles or resources for the disabled.
As libraries become increasingly virtual, vendors need to change their services accordingly. The CEO of Inmagic, Phil Green, says that "Within five years we believe that the majority of special library resources will be electronic/virtual…" Libraries and vendors must both work to find ways to use new technologies to best meet the needs of library users.
