Closing in on Content.(library automation industry)(Industry Overview)

Mergers and acquisitions continue; OPACs take a cue from Amazon.com

IN SOME WAYS, the inevitable changes in the 2000 automation marketplace paralleled those in the past: mergers between automation vendors and acquisitions by larger conglomerates. However, in 2000, some vendors also responded to the demand for innovative solutions by introducing exciting new products in the areas of content delivery and personalization.

By far, the most discussed move of the year was the purchase of Endeavor by publishing giant Elsevier. However, perhaps the most surprising one was the acquisition of CARL by The Library Corporation (TLC).

As for sales of automated systems, the year started off slow for almost all vendors. Many institutions had spent their technology budgets on Y2K fixes and upgrades, so the 1999-2000 fiscal year left potential buyers with few funds for big new purchases at the beginning of the calendar year.

Mergers and alliances

The acquisition of Endeavor by a larger company didn't surprise most in was Elsevier Science raised several questions. It's no secret that many librarians, particularly ones in Endeavor's targeted academic market, retain suspicion of Elsevier due to the pricing of its scholarly journals. Whether fairly or not, Elsevier is often portrayed as the "wolf at the door" of academic library budgets. So, what impact will the Elsevier corporate presence have on Endeavor? What role will Elsevier play?

While current Endeavor management must remain for a specified time under the purchase agreement, some in the industry speculate that longtime staff may eventually leave Endeavor. At the same time, others quietly applaud the arrival of a financially strong content provider in the automation marketplace. Elsevier's deep pockets can finance the costly development and support of today's technologically complex library system. Already, the monetary infusion at Endeavor has doubled its development staff.

We can expect to see more content providers entering the systems arena. Automation vendors still being run by an aging founder might be prime targets for future acquisitions. For librarians, such consolidations may make sense because an increasing number of library services are being designed around the provision of electronic content. Collaborations among systems vendors and content providers, whether through mergers or alliances, will enable libraries to offer the necessary linkages between local collections and online materials.

Acquisitions and new faces

The acquisition of CARL Corp. by TLC in June caught more people by surprise. Though speculation had been mounting about the future of CARL, few realized that the partnership between CARL and TLC in Singapore during the late 1990s would bring the two companies together. Since the introduction of its Library. Solution product in 1997, TLC has tried to position itself as a company that could serve larger libraries. CARL's historic strength has been with very large library systems, particularly public library ones, so the merger is logical. By acquiring CARL, TLC has placed itself as the vendor of choice when current CARL customers seek to upgrade.

A new face among automation vendors is Patrick C. Sommers, who took over as president of Sirsi in January. However, Sommers is not new to the information industry: he has been the president and CEO of Dialog Corp. and former president of Dun & Bradstreet Information Resources. Sommers will run the Sirsi operation, while founders Jim and Jacky Young will focus on the company's technological developments. In an era where automation executives often hop from one vendor to another, leaders from other segments of the information industry may bring new ideas and perspectives.

Revenues in 2000

Estimated library systems revenue for 2000 based on this survey are no more than $440 million--though that figure should be treated with caution, since this year's survey garnered fewer responses' and included more estimates. The figure is below that of the three previous years, partly due to slow sales early in the year, too. Last year's survey included 26 vendors. This survey includes responses from 19 vendors, though revenues were also estimated for vendors not covered and those that did not specify revenue. Profiles below are based in part on company-supplied answers to survey questions.

Inadvertently, the survey was not sent to the following companies: CASPR, Geac, and Sanderson. The following companies were not able to complete the survey in time for the publication of this article: Fretwell-Downing, SIRS Mandarin, SydneyPLUS.

Of the 17 companies reporting revenue, Innovative Interfaces again had the largest revenue with $75 million. Another vendor, which requested that its identity not be disclosed, reported revenue in the range of $70-$80 million, as did another which reported revenue of $60 million. Another reported revenue in the $40-$45 million range. The remainder of the companies reported revenue under $30 million: one in the $25-$30 million range, one in the $20-$25 million range, one in the $15-$20 million range, three in the $10-$15 million range, five in the $5-$10 million range, and two in the $1-$2.5 million range.

Revenue breakdown

Revenue coming from the reselling …