Deal-making fueled development of ILS and non-ILS products Following a phase of market fragmentation and gradual product evolution, major business transitions and industry dynamics greatly transformed the library automation marketplace. The changes in company structures broadly fostered more streamlined development of traditional ILS products, as companies focused on products and technologies geared toward helping libraries cope with electronic resources.

See also: Company Profiles

The market saw some growth. Total industry revenues in 2005 were about $535 million, up about 6% from our revised 2004 estimate of $505 million. This figure represents total revenues from all the companies that sell library automation products in North America. Total ILS sales were down at least 13% among the high-end systems. Non-ILS sales represent increasing proportions of income among library automation companies. Companies specializing in library technology products that do not offer an ILS, such as WebFeat and Serials Solutions, have become a larger factor. Competition for ILS sales remained strong, though overall sales volume dipped. SirsiDynix, formed in this year’s consolidation, stands as the largest company in the industry by far and ranked at the top in both total sales and in gains of new name clients, with 238 contracts for its dual flagship products Unicorn and Horizon, including 112 sales to new clients. In addition, the company expanded many existing implementations. SirsiDynix characterized its sales performance this year as providing new automation products to 683 unique political entities. Innovative Interfaces demonstrated strong performance against this new formidable competition. The company’s 73 new name sales topped both Unicorn and Horizon individually. Innovative won a major municipal system, the newly amalgamated library system in Montréal; Virginia Tech, the only Association of Research Libraries (ARL) member library out to bid this year, selected Millennium to replace the VTLS system that launched its namesake company. Innovative continued to leverage its head start in the electronic resources management arena, with 94 new licenses this year alone and 180 installed to date. Innovative not only attracted legacy migrations but took away flagship systems from its competitors, including Unicorn, Horizon, The Library Corporation’s Carl.Solution, Endeavor’s Voyager, and VTLS’s Virtua. Ex Libris continued to dominate in products that support management and delivery of electronic resources. The company held a long lead among the ILS vendors’ OpenURL linking and metasearch products. The 178 libraries that licensed the SFX Link Server in 2005 increased its installed base to 905; 59 libraries selected MetaLib as their metasearch platform. At a time when managing electronic content ranks high on the agenda of most academic libraries, Ex Libris enjoys technical prowess and strong sales in a product arena with undoubted growth potential. In the school market, Follett and Sagebrush dueled for top rank. In terms of the number of libraries automated, the two company’s 2005 sales matched almost exactly. Sagebrush sold its new InfoCentre product to 3,541 libraries; Follett sold 273 licenses for Destiny Library Manager for Districts, serving 3180 schools. Sales of the company’s other automation systems balanced the scales. An important component of the sales performance of each company is its ability to migrate the libraries running its legacy system to its current flagship. Innovative continued to be strong in customer loyalty through migration, retaining 37 out of 38 Innopac sites that selected a new system in 2005. Over in Europe, Geac also had a near perfect record in converting Vubis Original to Vubis Smart, as did Ex Libris in converting ALEPH 300 sites to ALEPH 500 in Israel. We counted 124 Dynix sites that chose a new system in 2005 and 73% went to Horizon; of the 53 DRA Classic in play, 52% went to Unicorn. SirsiDynix did well with MultiLIS sites—all but one went to either Unicorn or Horizon.

Migrations winding down

The current round of legacy migrations will play itself out within a few short years. At the end of 2004, 2,983 libraries operated a legacy ILS. This number dwindled to 1,566. NOTIS, INLEX, and Taos are all nearly extinct. DRA, MultiLIS, and VTLS Classic are endangered, with fewer than 50 libraries each. We expect most of these libraries have arrangements in place to migrate within two years. Galaxy, Geac Advance, and PLUS have only slightly higher residual installations. Though the number of libraries using Dynix fell by 60% this year, 768 remain. As we noted last year, Dynix migrations continued to fuel much of the ILS migration economy, but the gas tank will be empty soon. By about 2009, the vast majority of the public and academic libraries in North America currently running legacy systems will have installed one of today’s flagship automation systems, and the ILS market will enter a new phase.

Looking past legacy migration

The next phase of the automation marketplace offers limited opportunities for big-ticket ILS sales, especially in North America. Some of the patterns to expect in this post–legacy migration market include increased activity involving smaller and mid-sized libraries joining a consortium rather than implementing their own independent ILS; greater competition for smaller libraries, including those that have never automated and those with PC-based systems; and increased automation through vendor-hosted ASP (application service provider) offerings. Expect each major ILS vendor to market more aggressively internationally. From the library perspective, pressure to enhance resource sharing will drive automation decisions. This motivation will speed the movement of individual libraries into consortia and the mergers of consortia and spark investment in technologies that connect ILS systems to facilitate broad-based patron borrowing at costs below current interlibrary loan models. In the current market, it is rare for a library to make a lateral move from the flagship ILS of one company to one of its competitors. Librarians tend to show loyalty to their vendors. In a consolidated market, however, a library’s vendor may not be the one it originally selected. It may be the company that bought the original vendor, twice removed. It’s an open question whether traditional vendor loyalty will hold up through the rounds of consolidation. As legacy migration opportunities dwindle, we can expect competition to heat up to woo libraries running the flagship of their opponents. Many of the current flagship systems are already beginning to show their age. Vendors that fail to modernize their core ILS systems increasingly will be vulnerable to defections to competing systems. This year saw 18 flagship defections, 16 of which were displacements of other vendors’ current systems by Millennium. The 49 libraries that comprise the CLAN consortium, for example, will move from their two-year-old Horizon system to Millennium; the Mountain College Library Network consortium will migrate to Millennium from Unicorn; four separate college and university libraries will move from Voyager to Millennium; and one academic library moves from Virtua to Millennium. Polaris took away a Unicorn site, and one library pulled out of a consortium running Millennium to implement its own Library.Solution system.

Diversification needed

Diversification and expansion efforts have been underway for some time already. Several companies have ratcheted up their efforts. As sales of its Virtua ILS slow in the broader market, VTLS has concentrated on very large-scale and complex automation projects, including Oxford University in the UK and New York University. The company’s business plan includes enhancement and support of open source solutions in the areas of institutional repositories, electronic theses, and dissertations. More than just about any other company, Innovative Interfaces focuses its efforts on the development and marketing of its Millennium ILS. Outside this sphere, the company has been a leader on the electronic resource management (ERM) front, with four times the installations of its nearest competitor, Serials Solutions. This year Innovative began development of an institutional repository platform called Symposia. Ex Libris, though its ALEPH 500 ILS is quite successful, has established a strong reputation for its non-ILS products, each focusing on some aspect of electronic content management and access: SFX, MetaLib, Verde, and now Primo. Its market-leading SFX link server has proven to be an effective lever to break into its competitors’ client base. SirsiDynix, in addition to its two flagships, Unicorn and Horizon, offers a wide set of diversified products. Director’s Station allows a library to analyze its internal workflow patters, and its Normative Data Project subscription service enables librarians to measure current and potential client use patterns in a larger geographical context. The company’s repertoire also includes OpenURL link servers, metasearch applications, digital library products, and portals—with dual Sirsi/Dynix offerings in most cases. Auto-Graphics relies on ILS for only a minority of its revenues, with more of its efforts focused on large-scale resource sharing systems. Endeavor, with new sales of Voyager declining, now relies on products centered on management and access to digital content, including its new Meridian ERM and its former ENCompass family of products, now revamped and renamed. The company also has moved toward digital archiving as a strategic activity. The Library Corporation (TLC) extends its reach beyond the traditional ILS by reselling the AquaBrowser and Endeca search interfaces. TLC took a large step out of the ILS bounds into the automated materials handling industry when it acquired TechLogic, which it will operate as an independent company. Companies such as Follett and Sagebrush come prediversified. In both companies, the library automation division represents only one business activity among others that offer many different products and services to schools.

Focus on interfaces and portals

To satisfy increasingly web-savvy users, librarians see the need to offer web interfaces as attractive, sophisticated, and easy-to-use as what’s on the commercial web. Librarians expect their online catalog to provide access to all aspects of their increasingly diverse collections, spanning all types of media in addition to print. Simple Google-style search boxes are emerging; delivering well-ranked results remains a challenge. Library OPACs are looking to FRBR (Functional Requirements for Bibliographic Records) as an organizational concept that will help their catalogs intuitively present content delivered in multiple forms. Innovative’s WebPAC Pro and the SirsiDynix Enterprise Portal Solution are examples of integrated OPACS enhanced with portal functionality. The AquaBrowser Library, a search interface that can be used with any of the major automation systems, saw strong sales this year. Medialab Solutions in the Netherlands developed the AquaBrowser technology; TLC markets it in the United States and Canada. Initially available as a replacement interface for library catalogs, the next version of AquaBrowser Library will offer metasearch. Guided Search from Endeca, also marketed by TLC, offers yet another alternative OPAC replacement; early adopters include North Carolina State University Libraries.

Metasearch mandate & ERM excitement

Libraries need the ability to offer simple search interfaces that span ever-growing collections of e-journals and other digital content, and many invested in this technology in 2005. WebFeat, by far, holds the top spot in metasearch, with total sales in 2005 of 651 library clients sold directly (485) or through ILS partners (166). Its WebFeat PRISM service appeals to both public and academic libraries. WebFeat’s ILS partners include SirsiDynix, TLC, and EOS International. Only a small number of ILS vendors have developed their own metasearch software. Among these, Ex Libris’s MetaLib holds the lead at 508 installations to date, with 58 sold in 2005. Auto-Graphics’s AGent portal and ZPORTAL from Fretwell-Downing also developed their own metasearch products. Several ILS companies offer metasearch based on technology from MuseGlobal: SirsiDynix, Mandarin Library Automation, VTLS, and Innovative Interfaces, each of which saw only moderate sales in 2005. This year Endeavor switched allegiance from MuseGlobal to TDNet. In the K-12 market, Follett’s One Search and Sagebrush Corporation’s Pinpoint both saw strong sales. In 2005, ERM finally became a mainstream product. Innovative Interfaces, fielding its Electronic Resource Management application since 2003, now has plenty of company. Endeavor’s Meridian, Ex Libris’s Verde, and VTLS’s VERIFY entered the ERM competition. Innovative delivered its second release in May 2005, with version three underway for 2006. Serials Solutions, now owned by ProQuest, launched its ERMs in October 2005. Again, we see non-ILS vendors anxious for a piece of the pie. For now, interest in ERM seems to be limited to academic and research libraries, but as other library types become more heavily invested in electronic content, interest will expand accordingly.

Business transitions

The library automation industry in 2005 saw a major reshuffling of companies. Goodbye to Sirsi, Dynix, GIS Information Systems, and Geac. Hello to SirsiDynix, Polaris Library Systems (leveraging the brand recognition it had built for its flagship product), and a new yet-unnamed company, respectively. OCLC entered the fray in a big way, acquiring Fretwell-Downing, Openly Informatics, and Sisis Informationssysteme. This year witnessed the beginning of the end for the Geac name, though the company’s library products and services remain intact. Golden Gate Capital, a major San Francisco–based investment firm, acquired Geac, now a multinational, diversified company, in a deal valued at just over $1 billion. The Library Solutions division, a relatively small operating unit with the former Geac, will be part of a new company, wholly owned by Golden Gate, to be named and established in 2006. Despite the new ownership, major restructuring, and new branding, operations are expected to continue much as before. In the last few years, Geac’s library automation business based on Vubis Smart had found a stronghold in Europe and the UK as its once powerful North American presence based on Advance and PLUS declined. One of the largest business acquisitions in the history of the industry unfolded this year. SirsiDynix emerged through the June 2005 buyout of Dynix by Sirsi and its chief financial backer Seaport Capital. The previous owners of Dynix, mostly related to Hicks, Muse, Tate & Furst, a Dallas-based investment fund, retain only a small stake in the new company. Patrick Sommers, CEO of Sirsi, heads SirsiDynix. Most of the VP and director-level positions went to former Sirsi execs, though some from the Dynix side of the company also landed top positions. Prior to the merger, Sirsi ranked third behind Dynix and Innovative; now SirsiDynix looms about 40% larger than Innovative. The new company oversees a wide array of library automation products, including its Unicorn and Horizon flagship systems, and a number of legacy products: DRA Classic, Dynix classic, MultiLIS, and INLEX. As direct competitors for over two decades, the companies had overlapping products in almost all areas. SirsiDynix faces a huge challenge as it works out its future product strategies. So far, SirsiDynix assures its customers that it will continue development on both Unicorn and Horizon for a number of years. In the shorter term, the company plans to do more consolidated development of front-end interfaces and portals, creating interfaces that will work equally well with both flagship systems. Sales for 2005 largely reflected the sales efforts in place prior to the merger. Key in coming years will be how SirsiDynix positions its products among its existing customer base and as it bids on new business. OCLC, a member-owned nonprofit with diverse business relationships, went on a buying spree of library automation companies in 2005, both directly and through its European subsidiary OCLC PICA. In addition to many other activities, PICA was involved in the development of library automation software, offering both a union catalog product for consortia and a traditional ILS. In June 2005, OCLC PICA purchased Sisis Informationssysteme, a German company that offers a library management system called Sunrise, installed in about 150 libraries in Germany and Austria. Sisis was also involved in the development of portal technologies. Six months later, OCLC PICA purchased UK-based Fretwell-Downing. This acquisition brought into the OCLC fold a number of library automation products, including the OLIB7 ILS, deployed mostly in the UK; VDX, a resource sharing environment; the ZPORTAL metasearch environment and CPORTAL, a product for e-government applications; and OL2 an OpenURL-based link resolver. In January 2006, OCLC purchased the assets of Openly Informatics, a company involved with technologies and data products related to the support of electronic resources. Much of Openly’s products were sold through other companies rather than direct to libraries. Openly developed the 1Cate Link Server and created databases that help libraries manage e-journals. TLC branched out by acquiring Tech Logic Corporation, based in White Bear Lake, MN. Tech Logic specializes in automated materials handling systems and RFID technology. TLC will operate Tech Logic as an independent, wholly owned subsidiary. This event marks the first time TLC has expanded through acquisition since taking in Carl in 2000. Another business transaction that made headlines involved an aborted IPO attempt by Ex Libris. In a move designed to raise additional capital to fund aggressive development efforts and possible acquisitions, the company staged an initial offering of stock on AIM, a London stock exchange for small cap companies. Finding the valuation of the offering lower than hoped, the company abandoned the effort, choosing instead to rely on ongoing revenues for its development campaign, exploring other options such as bank financing as needed. We’ve long expected consolidation in the library automation arena. Though on first blush the year seemed frenetic with business transitions, what played out was one of the more conservative of the potential scenarios. While the competitive arena now includes a giant, the other business transactions are lateral moves that do not significantly reposition the companies involved. Industry fragmentation endures; a large number of companies offer highly overlapping products with marginal differentiation in a limited market. The reshuffling in 2005 may be only an interim stage as the industry reorganizes itself, adjusting to a new balance of library priorities tipping more toward managing electronic content with less emphasis on traditional automation issues.

COMPANY	SYSTEM NAME	TOTAL SALES					NEW CUSTOMERS					TOTAL INSTALLED
		2001	2002	2003	2004	2005	2001	2002	2003	2004	2005
Full Function Multiuser Systems for Public, Academic, and Consortia
SirsiDynix	Unicorn Library Management System	117	207	124	134	91	110	72	46	74	56	1512
SirsiDynix	Horizon	126	114	168	193	147	60	43	77	63	56	1503
Endeavor Information Systems	Voyager	50	44	35	22	14	50	44	35	22	11	1325
Innovative Interfaces, Inc.	Millennium	157	136	144	119	107	66	71	96	76	73	1225
Ex Libris	ALEPH 500	80	58	51	53	83	70	48	42	53	53	923
The Library Corporation	Library.Solution	79	70	73	58	41	74	61	64	55	40	655
InfoVision Technology	Amlib Library Management System	36	139	58	38	42	5	139	58	38	27	520
VTLS Inc.	Virtua	37	60	67	35	25	21	26	34	28	23	223
Civica	Spydus	50		21	16	50	9		21	5	5	199
Geac	Vubis Smart	13	34	54	56	60	8	9	17	19	16	164
Polaris Library Systems	Polaris Integrated Library System	12	21	20	37	39	2	6	9	6	12	146
Auto-Graphics, Inc.	Impact/VERSO (local or ASP)	14	19	6	23	15	10	18	4	20	15	106
Keystone Systems, Inc.	KLAS	4	13	6	3	4	4	10	4	3	4	58
The Library Corporation	Carl.Solution					0					0	21
The Library Corporation	Carl.X				1	3				0	0	1
Automation Systems for Centralized School Districts
Follett Software Company	Destiny Library Manager for Districts			25	143	424			10	71	273	424
Softlink America Inc.	Softlink Oliver			20	68	213			20	46	115	278
Book Systems, Inc	Atriuum				30	45				13	25	76
Automation Systems for Individual Schools
Follett Software Company	Follett Circulation Plus & Catalog Plus	6275	4088	3040	1618	465	3279	2414	1354	990	365	33,877
Sagebrush Corporation	Winnebago Spectrum	2461	2388	2150	1399	325	1424	1403	1290	496	183	15,169
COMPanion Corp.	Alexandria		1530	1538	1085	502		646	682	432	232	9971
Sagebrush Corporation	Sagebrush Athena	2091	1986	1787	575	298	1208	1208	1072	522	270	9762
Softlink America Inc.	Softlink Alice	1006	650	398	417	900	1006	500	398	385	900	9400
Book Systems, Inc.	Concourse	1912	1361	954	627	506	1402	1009	713	497	385	8990
New Generation Technologies Inc.	LIBRARYSOFT	337		796	710	585	281		580	564	536	4300
Sagebrush Corporation	InfoCentre					3541					170	3745
CASPR Library Systems, Inc.	LibraryWorld	330		203	89	55	330		72		55	2240
CASPR Library Systems, Inc.	LibraryCom	243		167	195	204	243		167	195	204	645
Follett Software Company	Destiny Library Manager for schools				44	373				40	261	435
Mandarin Library Automation, Inc.	Mandarin M3	132	225	231	104		87	225	231	104
Automation Systems for Special Libraries
Inmagic, Inc.	all products					200					2000	8000
EOS International	EOS.Web			18	157	196			15	42	49	371
Softlink America Inc.	Softlink Liberty3 / ASP		22	135	137	177		21	109	117	172	245
CyberTools, Inc.	CyberTools for Libraries	15	26	27		73	15	26	27		73	221
Enterprisewide automation systems for Special Libraries
Open Text, Inc., BASIS Division	Livelink for Libraries	20	14	15	20	18	10	6	4	2	3	204
SydneyPLUS	SydneyPLUS for SQL and Oracle				26	56				6	9
SOURCE: LJ AUTOMATED SYSTEM MARKETPLACE 2006 *Where there are blank spaces, no data were available

	PERCENT OF NEW SALES
COMPANY	ACADEMIC	PUBLIC	SCHOOL	SPECIAL	CONSORTIA
Auto-Graphics, Inc.	0	93	7	0	0
Book Systems, Inc.	1	5	49	44	0
Civica	8	62	10	14	6
CyberTools, Inc.	7	0	0	79	14
Endeavor Information	44	6	0	31	19
Systems EOS International	0	0	0	100	0
Ex Libris (USA), Inc.	61	1	1	33	3
Follett Software Company	1	3	92	4	0
Geac Library Solutions	2	78	0	17	3
InfoVision Technology	0	11	48	41	0
Innovative Interfaces, Inc.	60	23	3	13	1
Keystone Systems, Inc.	0	0	0	100	0
The Library Corporation	7	68	14	11	0
New Generation	19	19	19	20	24
Technologies Inc. Open Text, Inc.	0	0	0	100	0
Polaris Library Systems	10	82	3	3	3
Softlink America Inc.	3	0	78	18	0
SydneyPLUS	0	0	0	100	0
VTLS	69	7	0	24	2
SOURCE: LJ AUTOMATED SYSTEM MARKETPLACE 2006

CATETORY/COMPANY	PRODUCT	2004 SALES	2005 SALES
OpenURL link Resolvers
Dynix	Horizon Link Resolver	3	4
Endeavor	LinkFinderPlus	5	75
Ex Libris	SFX	178	905
Geac	Vlink	0	5
The Library Corporation	Gold Rush	1	1
Polaris Library Systems	TDNet TOUResolver	1	1
Serials Solutions	Article Linker	184	427
Sirsi	Sirsi Resolver	18	79
Metasearch Products
Ex Libris	MetaLib	59	508
WebFeat	WebFeat PRISM	485
All WebFeat Partners*	WebFeat PRISM	166
Total WebFeat	WebFeat PRISM	651	2903
Products Based on MuseGlobal
Endeavor	ENCompass for Resource Access	10	75
Innovative	MetaFind
Mandarin Library Automation	Mandarin PACPortal
SirsiDynix	Sirsi SingleSearch	28	106
VTLS	VECTORS	2	4
Other ILS metasearch products
Auto-Graphics	Agent Portal	1	27
K–12 Arena
Follett	OneSearch	560	1501
Sagebrush Corporation	Pinpoint	110	412
Electronic Resource Management Products
Endeavor	Meridian	30	30
Ex Libris	Verde	46	46
Innovative	Electronic Resource Management	94	180
ProQuest–Serials Solutions	Electronic Resource Management System	47	53
VTLS	Verify	6	7
Digital Library Products
Endeavor	ENCompass for Digital Collections	2	25
Ex Libris	DigiTool	32	61
SirsiDynix	Horizon Digital Library	3	13
SirsiDynix	Sirsi Hyperion Digital Media Archive	15	98
VTLS	VITAL	5	11
Other SirsiDynix Non-ILS products
SirsiDynix	Director’s Station	138	483
SirsiDynix	Sirsi Rooms	15	110
SirsiDynix	URSA	10	15
SirsiDynix	Web Reporter	172	287
* SirsiDynix, The Library Corporation, EOS International, SydneyPLUS, Serials Solutions, EBSCO, and Infotrieve
SOURCE: LJ AUTOMATED SYSTEM MARKETPLACE 2006

LEGACY SYSTEM	ALEPH 500	MILLENNIUM	AGENT	CARL.X	HORIZON	KLAS	L.S	POLARIS	UNICORN	VIRTUA	V.SMART	TOTALS	LOSS	RETENTION	PERCENT
Advance	4			6	2				2	1	1	16	15	1	6%
Aleph 300	29											29	0	29	100%
Carl			4	1								5	1	4	80%
DRA Classic				7	1	3		1	13			25	12	13	52%
Dynix		2		9	90		12	4	7			124	34	90	73%
Galaxy				1	1		4	27				33	6	27	82%
INLEX/3000									1			1	0	1	100%
Innopac				37				1				38	1	37	97%
MultiLIS				1	1				18			20	2	18	90%
PLUS				3	1				1		8	13	5	8	62%
VTLS Classic	1			5	3					2		11	9	2	18%
Vubis Original											33	33	0	33	100%
Total	34	2	4	70	99	3	16	33	42	3	42	348
This chart shows the system chosen by libraries that migrated from legacy systems. The data are derived from only those migrations where the system migrated from is known. The numbers shown in bold indicate where the library upgraded to systems offered by the same company.
SOURCE: LJ AUTOMATED SYSTEM MARKETPLACE 2006

COMPANY	SUPPORTED SYSTEMS	SUPPORT STAFF	INSTALLED SITES	RATIO
Polaris Library Systems	Polaris, GALAXY	30	210	7.0
Innovative Interfaces, Inc.	Millennium, Innopac	171	1274	7.5
The Library Corporation	Library.Solution, Carl.Solution	85	675	7.9
VTLS	VTLS Classic, Virtua	32	266	8.3
Keystone Systems, Inc.	KLAS	7	62	8.9
SirsiDynix	Unicorn, Horizon, Dynix, DRA Classic, MultiLIS	391	3894	10.0
Ex Libris	ALEPH 500, ALEPH 300	93	981	10.5
Auto-Graphics	AGent/Verso	9	106	11.8
Endeavor Information Systems	Voyager	65	1325	20.4
Geac Library Solutions	Vubis Smart, Advance, PLUS, Vubis Original	25	670	26.8
SOURCE: LJ AUTOMATED SYSTEM MARKETPLACE 2006

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Marshall Breeding (staffweb.library.vanderbilt.edu/breeding) is Director for Innovative Technology and Research at the Vanderbilt University Library, Nashville