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Does Choice Matter?

By Andrew K. Pace
American Libraries Columnist
andrew_pace@ncsu.edu

Head of Systems, North Carolina State University Libraries, Raleigh.

Column for December 2005

Someone once called me a communist. Not in the way that you might think, nor at the time when the moniker was thrown about with the same venom that “liberal” or “right-winger” are today. I was bemoaning the fact that every web product for which I was responsible had to pass quality assurance tests for at least three browsers and three operating systems.

How much easier, I mused, if there was only one browser and one operating system. “That sounds like commie talk,” came the joking reply. It felt more like socialism to me, and almost seemed like a good idea, until I realized how much more reviled Microsoft might be if the federal government were responsible for running it.

Less to choose from

Just as dot-coms were not immune from the laws of economics that led to the bubble burst of the 1990s, the library and educational software industry is hardly immune from all the mergers and acquisitions to which the world outside Libraryland is falling victim. Exxon and Mobile, Amoco and BP, Adobe and Macromedia. In our world, it’s Elsevier and Endeavor, Sirsi and Dynix, and Blackboard and WebCT (see below), just to name a few.

Mergers and acquisitions are natural, and the word count devoted to them in the Quick Clicks section of this column is quickly overshadowing the North American contract awards for integrated library systems. Nevertheless, even the perception of fewer choices is anathema to librarianship. Such revulsion is a bit schizophrenic for a profession that relies on consistency, uniformity, and compliance.

Just the beginning

If the software firm you deal with is not buying another company or considering whether to allow itself to be purchased, that’s the exception, not the rule. During a recent Q&A session after a vendor demo, the president of the company (both president and company shall remain nameless) was asked point-blank if his firm was for sale. “Everyone’s for sale,” was his candid reply. “The only question is who’s buying and for what price?”

So, we must be prepared for more of these mergers. The ripple effects of the SirsiDynix merger will most certainly be felt as ILS competitors strategize against the new Goliath. The October announcement that course-management software giants Blackboard and WebCT would be mergin g is quite similar, though the two control a larger percentage of overall customers, more than 3,700 in all. (The deal, valued at $180 million, is expected to be finalized by early 2006 and will retain CEO Michael Chasen at Blackboard’s helm.)

Though big mergers create big shadows, they also tend to make customers take note of smaller competitors in the field, of which there are several, including Angel Learning, eCollege.com, Desire2Learn, and IntraLearn Software.

Mergers make customers nervous, and often for good reason. Mostly, it’s because “merger” is most certainly a gentler euphemism for “acquisition.” Sirsi acquired Dynix when the financial backers of Dynix sold their interest to the financial backers of Sirsi. Blackboard paid $180 million for WebCT (keep in mind that this is probably double the value of any single ILS vendor).

Certainly, I would be more nervous as an employee of one of these companies than as a customer. To some degree, the promises of synergy, combined strength, and market dominance are all true. But the sword of synergy has another edge designed to carve out redundancy and inefficiency. Companies that merge must make development decisions a priority and if due diligence on the acquired assets was not performed before a merger, it most certainly will mean product-lineup changes afterwards. Closely monitoring those changes will be the task of the customer, since not every synergistic opportunity will be announced with fanfare by the company that comes out on top.

Is choice in danger?

As a columnist, I must (when it serves my point) put my argument in the context of what I have said in the past. So much library automation software has reached commodity status that even with more companies to choose from, I am not convinced that there was really much choice, per se, on the market. That is, if product A and product B share all the same features and functionality, why should I care if the companies merge and settle on marketing either A or B exclusively?

On the other hand, even the illusion of choice in the marketplace brings comfort to the customer. I firmly believe that the burgeoning open source software movement is much more about choice than it is about saving money. It has become well accepted that free software is like a free kitten (the costs pile up afterward—maintenance, care, growth, etc.). Nevertheless, the freedom that comes with open-source applications promises choice not only in the product suite as a whole, but in the functionality that is put into the software itself. The cost-benefit of such choice is fodder for another column.

So the best that can be said is that we must be comfortable with the shrinking set of players on the traditional library automation market. I for one am comfortable with it when it comes to commoditized product offerings, since a monopoly can increase the price of a commodity (caveat: I got a C– in college economics). I also take heart that more nontraditional software players are entering the library software market, which is what continues to make following this industry so interesting.

Open source watch

Big mergers in the e-learning and course-management world could be good news for two open source projects in that niche with growing followings—the Sakai Project and Moodle. 

VTLS continues its support for open source initiatives with the release of an open source web submission–software package for electronic theses and dissertations (ETDs). The web-based forms are designed to simplify the ETD submission process into an underlying Fedora repository.

Announcements

Azriel Morag, founder of Ex Libris, has sold all of his remaining interest in the company to internal investors. Ex Libris also announced plans in September to raise $15 million with an initial public offering to be used to expand global marketing and pursue acquisition possibilities. The plan was abandoned when the offered price on the U.K. stock exchange was lower than expected. In a message to customers, Ex Libris stated, “Both the shareholders and Ex Libris management reviewed this offer and felt that the value offered for the company to go public was not indicative of Ex Libris’ position as a global leader in library automation and e-resource management."

Sagebrush Education Resources has released a new feature that dynamically aligns titles to each state’s curriculum standards in all core subject areas—a feature that will assist libraries in selecting titles to support specific instructional mandates.

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