The formation of SirsiDynix prompted a couple of interesting posts. Kenton Good predicted that there would be another coming together this year and wondered would it be Innovative Interfaces and Endeavor Information Systems. He speculated that:
Ex Libris feeling isolated will radically shift their business model. Leveraging their plans to modularize their ILS, they will shift to the Red Hat open source model – open source their code – and sell support for the resulting product. [Kenton Good � My Fearless ILS Predictions]
Ken Chad of Talis reviewed the history of consolidation in the industry. He notes two patterns. In one, a library systems company is bought by some larger group. These have not proved to be longterm relationships, so he predicts that Elsevier will divest itself of Endeavor. In the other, a stronger company buys a weaker one, often to acquire a customer base. Ken suggests a reason for the lack of long term success of the first model, where a broader group acquires a library system:
In my view these failures came about because the companies misunderstood the library market and the limitations of vertical applications. It just didn’t scale. [panlibus: A UK perspective on consolidation in the library market: The SirsiDynix merger]
This theme, of vertical application vendors, is picked up in the Talis white paper, Project Silkworm, which was published a little while ago. It includes an analysis of the Amazoogle experience, and how it compares with a library experience, in terms similar to those in these pages, introduces some Web 2.0 concepts and suggests how they might alter the structure of the library market, and talks about Talis’s own directions. The most interesting paragraph in the report to me was the following:
Currently, the library market is structured in a high cost way with many vertical vendors and little horizontal specialization. It will be too expensive for each player to provide an all-encompassing experience and the market should not have to bear the weight of each vendor duplicating this. Vendors will therefore need to work together. Indeed, it’s the sign of any mature market that a horizontal structure is required to lower the total costs for all.
Recently also, Roland Dietz and Carl Grant, of Endeavor and VTLS respectively, wrote an article in Library Journal which considered factors which hamper innovation in the library environment. They talk about the need for library system vendors, and the libraries they serve, to work together in new ways.
We’ve seen cross-licensing in metasearch and link resolving products, yet cross-licensing between direct competitors is still rare. The benefits could be huge for the vendors, the profession, and thus the users. For this actually to happen, librarians must tell vendors that it is what they want to see. The “not invented here” syndrome is very real in all technology companies, and ILS vendors are no different. What is equally real is that any vendor that desires longtime survival listens to customers’ needs. [Library Journal – The Dis-Integrating World of Library Automation]
So, we see an expectation of further consolidation among library system vendors. In a level funding environment each is extending its offerings to cover resolution, digital object management, e-resource management, metasearch and so on. As each vendor struggles to develop the full range of vertical applications, capacity for innovation is squeezed. Economies resulting from horizontal specialization or sharing of components (in a Web 2.0 platform sense, or in a more traditional sense) have not been realized. Such mixing of approaches between vendors is technically possible, but what it might mean in business and service terms has not been worked through. This seems to me to be the main reason that VIEWS has been slow to coalesce around an agenda: service and business models need to co-evolve with the developing capacities that web services (or web 2.0) provide. At the same time, there is not a dominant player around which technologies or service models can be consolidated. All of this meanst that progress is uneven and slow, through the variety of consensus-making forums in which library system vendors participate with each other and and with libraries and other service providers.
At the same time, it is interesting to observe how some library system vendors are developing new services which have a more ‘horizontal’ flavor, even if they are available only within their vertical application domain. Here are some examples:
- Ex-libris supports customers of its resolution application with its knowledge base. They could potentially offer knowledge base services to libraries with other resolver products.
- SirsiDynix is a sponsor of the Normative Data Project, working with partners to collect and analyse data about collections and transactions as a source of management intelligence.
- Several library system vendors have associated union catalogs. These include Talis and OCLC Pica. Historically, this category also included Libertas, a UK company acquired by Innovative Interfaces. In the Silkworm paper mentioned above, Talis suggests that one possible direction is to offer union catalog service to others, not just those that buy its system.
Of course, there are already significant providers of ‘horizontal services’ – OCLC and RLG, for example. Think also of RefWorks and Serial Solutions. And some organizations provide horizontal services within particular funding domains – the California Digital Library, at the University of California and DEFF, in Denmark, for example. One wonders would a case ever arise where those services were offered more broadly.
I have noted several times in these pages that I think that the major issues facing libraries moving forward are organizational. This is an example, where the way in which library system vendors, other service organizations, and libraries will move to new alignments. Greater horizontal specialization around software, service and data aggregation seems highly desirable. We don’t have good venues to have those discussions at the moment. Or good models to focus attention, which is a major reason why I think that ‘business architecture‘ is critical. I hope that this work which DLF has started will be taken up in other settings also as scaffolding within which we can develop the shared understanding that is necessary for some of what is called for above.
[It is interesting to consider how innovation emerges and its results are secured in our community – but that big question is for another day ;-)]