This is the third and final instalment of “What’s Next” for the library automation marketplace. Time to review: Major consolidation of the library automation market, the emergence of viable open source software solutions and new business models for supporting them, and a somewhat rancorous and impatient customer base that fears that profit and efficiency have out-gunned innovation and service. This is the making for a dangerous cocktail. What’s a vendor to do? What’s a library to do?
IMHO, I suspect that most libraries are going to sit tight. As have been mentioned many times, the pain and expense of moving systems is in the move itself. This gives vendors a little time (a little time) to breathe and think. If you want to make an organization move, you have to use more carrots and fewer sticks. So far, I see mostly sticks.
Some vendors, including the open source providers, will still be moving quickly to capitalize on discontent, and they will likely reap some rewards from that. Some libraries will want to take some risks, make a statement, or just try something new. Witness: University of Washington and WorldCat Local, British Columbia and Evergreen, the eXtensible Catalog project led by the University of Rochester, and PennTags.
Business Is Business
Back to consolidation and a dirty truth that no one ever wants to talk about: Most humans have an instinctive self-preservation reaction to change. The mergers and product announcements instill selfish reaction—”How will this affect me?” How do you think it feels to be working for a vendor when this happens? Dozens of people have lost their jobs in the last several months. And there will be more. We can be disappointed about a development opportunity missed, another path trod down a dead end, and time wasted, but at least most of us are not looking for new jobs in a shrinking market.
Ken Chad, a colleague who has been around the ILS (or LMS, as they say in the UK) block a time or two, has been writing and commenting on equity ownership in the marketplace. He has also asked the question of why equity firms are interested in a market that is not that rich.
So why would these underperforming companies be of interest to, for example, private equity investors who will need a good short-term return on their investment? Well precisely because they are underperforming there is scope for cost savings through product rationalisation and staff reductions especially when a merger takes place.
–Ken Chad, CILIP Gazette, March 2007
It has been suggested to me, on occasion, that ownership does not matter. I don’t believe this. Though it’s true that equity ownership in this space is nothing new, I think who owns your vendor is important. I also do not mean to lump all equity firms together in one pile, just as I would not talk about two founder-owned CEOs interchangeably (despite the fact that I think these folks share several characteristics…but that is a topic for another day). I only mean to say that ownership structure and motivation are important factors in assessing directions for libraries.
Private equity firms will no doubt add to a company’s efficiency and (perhaps) profitability (keeping in mind that some of “efficiency” is a euphemism for “downsizing”). Other privately held companies will be competing with those that are cost cutting and still providing competitive product. Will any of these companies innovate? Can they afford to? Someone will ask….do we need them to?
My answer to that last question remains a firm “yes.” Not every library is going to embrace open source or try to build something on their own. Some still want a “library-in-a-box” and not a platform that supports openness, modularity, and integration with 2nd-tier products and services. On the other hand, a lot of libraries want all of those things. I think the chips will go to the company that can do both. I don’t think either the open source side or the proprietary side are there yet.
Who will fund research and development in this new era? If we’re already paying a vendor, how much of that money is going into R&D and how much into operations? Is this new era one of continued co-dependence or co-development? If it’s the latter, how do we make sure that we are asking for the right things?
No Sitting on Hands
The challenge for libraries is realizing that perfect is the enemy of good. We will have to take the risks that matter. We will have to formulate exit strategies for IT solutions, or embrace decisions to stay the course. I myself have to tear down the poster on my wall that reads: “Indecision is the key to flexibility.”
[This post originally appeared as part of American Libraries’ Hectic Pace Blog and is archived here.]