BIBLIOTHÉCONOMIE

Library Journal Print Page

An Industry Redefined

Private equity moves into the ILS, and open source support emerges

By Marshall Breeding -- Library Journal, 4/1/2007

The reshuffling of the deck in 2005 presaged even larger changes this year, introducing new players and effecting dramatic shifts. The industry grew at a healthy pace in 2006, with overall revenues expanding from an estimated $535 million in 2005 to about $570 million in 2006.

Some companies saw decreased revenues from core ILS products and increased income from new web-based interfaces and tools to manage electronic content. RFID products represented large revenue gains for others.

Legacy system migrations represented 63% of overall ILS sales in 2006, though migrations among the midsized to large academic and public libraries are continuing to wind down. K-12 school and small public migrations are just heating up, fueled by thousands of libraries running aging standalone systems. Opportunities for new automation in the small public library arena abound for companies willing to offer products and services at an affordable price.

No Goliath stood unchallenged. The Davids of the industry continued to prosper by carving out niches underserved by the larger companies and capitalizing on the growing interest in open source software alternatives. Following many years of near evangelistic rhetoric, 2006 was the year that open source ILS products finally gained a measurable presence.

In a rash of mergers and acquisitions, Endeavor Information Systems and Sagebrush Corporation disappeared from the roster of companies this year. Private equity firms took charge of SirsiDynix and Ex Libris, and Endeavor was merged into Ex Libris. Follett Software Company acquired archrival Sagebrush, and Extensity morphed into Infor Library Solutions.