As a new year begins, I'm thinking about the technology trends and events that might be in store for libraries. While libraries shouldn't base their strategies on anyone's predictions, it's sometimes helpful to look forward a bit to anticipate anything that might impinge on technology planning. I see the next year as one that will continue to build on trends already in play, though there may be some new turns in the road as well.
First of all, I anticipate some shrinkage in the overall library automation market. The economic condition of libraries will take a bit out of the library automation industry. Even though many aspects of the economy have shown improvement over the last year, many libraries continue to deal with heart-wrenching budget cutbacks. Reports of branch closures, reductions in staff, and decreased spending on collections have, unfortunately, become common in the last year, with little hope for significant improvements within the next year or so. Given that the library automation industry depends on revenue from these cash-strapped organizations, we can expect some fallout. As branches close, for example, the associated support and software license revenues from those shuttered facilities disappear. Though some automation vendors may attempt to compensate for losses in revenues associated with the contraction of library systems through increases in other areas, the economic pressures will build, leading to changes in automation strategies that may lead to even more drastic measures.
Many libraries have turned away from managing their own automation infrastructure to participating in shared systems provided through a consortium, a regional or statewide project, or though commercial outsourcing arrangements. Others may turn to open source automation systems in hopes to reduce technology costs. Although the revenues earned in any given geographic area may decline, individual companies may see even or increased earnings through diversification into new areas of business and expansion into other countries.
Consistent with the last couple of years, 2011 will not see large numbers of new ILS adoptions in North America. I observe that many libraries continue to defer much-needed replacement of their aging automation systems due to budget constraints and especially to the lack of technology options, including those in the open source arena, that seem to offer dramatic improvements over their legacy systems. Given that new systems that promise a fundamentally new approach to library automation like Kuali OLE and Ex Libris URM are not anticipated for general availability until 2012, many libraries may continue to hold off making major investments. Still, I don't expect the vendors involved to suffer greatly. Ongoing system maintenance projects provide ample revenues to sustain the companies and sales of discovery products, RFID components, and other systems and services tend to increase as big-ticket ILS sales languish. Demand for improving how patrons experience library services on the Web and the lower threshold of investment should translate into a very strong year for discovery products.
The legal battle between SkyRiver and OCLC will persist. The anti-trust lawsuit brought against OCLC by SkyRiver and Innovative Interfaces made major headlines last year. I think it unlikely that either party will back away from their position and it seems that legal procedures will continue through at least the end of 2011, if not through 2012. While it's possible that the suit could be dismissed by the court, it seems more likely to me that procedures will continue at least through when the time in which a trial might be scheduled. An approaching public trial may trigger a settlement. This brewing legal battle brings uncertainty to industry during a critical period for OCLC as it ramps up its all-out marketing efforts for its new Web-scale Management Services. As conservative decision-making organizations, libraries often wait for the dust to settle in such matters before making major commitments. In the longer term, regardless of outcome, this lawsuit might benefit the industry if it can result in clarity regarding such issues as OCLC's position in the commercial library automation arena and the WorldCat record use policy.
At least one major company will see a change of ownership in 2011. The library automation industry is comprised of companies own by private equity firms or by families or individuals. A business sector of this size would naturally see some turnover in ownership every year or so with ever higher degrees of consolidation of companies. The decline in the broader economy brought the mergers and acquisitions activity to a standstill for the last two or three years. As investments made in the previous cycle mature and as businesses seek ever more opportunities and efficiencies, we can expect at least some new activity this year. Possible actions may also involve increased internationalization of the industry where large successful corporations in other international regions seek a presence in the United States, perceived as a more lucrative market.
I do not expect any business failures in the near future. To the best of my understanding, all of the major companies in the library automation industry are healthy and profitable.
On the technology front, libraries will embrace cloud computing more than ever. The last few years have seen increased pressures for libraries to shift away from locally installed automation systems toward some kind of external hosting. ILS vendors push hard for libraries to adopt their software-as-a-service offerings. Pricing configurations will increasingly drive libraries to purchase new automation products as SaaS and to convert current local installations. In most cases, shifting to SaaS produces mutual benefit. SaaS subscriptions bring in higher levels of revenue to vendors than software maintenance and support fees, though somewhat offset through the investments in infrastructure and support personnel; libraries see decreased costs involved with technical infrastructure and personnel. I expect this trend toward SaaS, which is already underway, to continue and greatly expand in this coming year. Most new technology investments made by libraries will be based on software-as-a-service.
In previous times, libraries had to justify the conditions in which they might turn over the operation of some aspect of their technical infrastructure to a third party. Now, libraries have to justify when it makes sense to maintain a local installation. While some projects may still demand installation on local servers, routine automation components will gravitate toward outsourced arrangements. As the technology cycle continues, local installation may not even be an option; many new products are offered exclusively through software-as-a-service. The offerings of the library automation vendors will increasingly rely on infrastructure based on the cloud. Rather than maintaining their own data centers, library technology products will make use of servers and storage delivered through infrastructure- as-a-service arrangements like Amazon's Elastic Compute Cloud or other competing cloud computing platforms.
Libraries will struggle to meet demands for mobile support. Mobile computing continues to explode in the consumer arena, prompting libraries to respond with at least some services accessible by smartphones and other smaller-screen devices. The advent of the Apple iPad in recent months and the surge in sales of the Amazon Kindle and other e-readers reminds us that this new world involves delivering services through a wide range of devices and that the relative proportions of laptops and desktops will diminish. I'm hearing more and more individuals say that they could easily rely on an iPad as their primary computing device. Relative to the enormous ramifications of this shift away from full-sized devices, the ability for libraries to meet demands for mobile access to their services will be moderate at best. As long as mobile interfaces represent yet another add-on product for libraries to purchase, implement and manage, the majority of libraries may not have the resources to engage with this technology in 2011. As a more sustainable approach, I would rather see mobile support built into any patron-facing library product.