Demand for integration triggers consolidation

European library-management company OCLC PICA had a busy year in 2005. In June it acquired the German Siemens-spin-out Sisis Information Systems, a provider of library-management systems and portal software that is mainly active in Germany, Switzerland and the Netherlands. This was followed, in November, by the purchase of the UK-based Fretwell-Downing Informatics Group (FDI), which gives OCLC PICA representation in the Netherlands, the UK and the US - three important countries in STM publishing. The two acquisitions bring the total number of staff at OCLC PICA to 240, a significantly larger company than the 70 members of staff that were employed by FDI alone.

'Universities expect all the products that they use to integrate with their infrastructure' Rein van Charldorp

The purchases, the company said, will 'extend [OCLI PICA's] system development resources, product technology and services'. But the decisions to buy Sisis and FDI go deeper than simply a desire to make a bigger company. OCLI PICA, like others in this sector, has recognised that the move from print to electronic delivery is having dramatic effects on what library customers expect from their libraries. What is more, these expectations are continually changing.

Libraries are changing

'In the past, both librarians and library-management systems were collection-focused but now they are more patron-focused,' said Robin Murray, FDI's managing director. 'People regarded libraries as the end-point but now they are seen as the means to an end.' One example of this, which took FDI rather by surprise, was the success of a portlet that the company developed. 'It allows a collection to be searched from any website and has generated huge amounts of interest,' he said.

'The library is clearly changing its role,' agreed Rein van Charldorp, managing director of the Netherlands-based OCLC PICA. 'Previously, librarians needed to get as much into the library as possible. Now they want to get as much out to users as possible. Librarians are also becoming involved in e-learning, setting up electronic repositories and the publication process. They are involved in publishing the results of the university.'

These changing demands are having a knock-on effect on the library management systems that librarians use to manage the resources they offer. 'It is clear that technology is changing very fast and customers expect this. They want things to be better, faster and cheaper. It is a substantial challenge and there is a need for us to invest,' van Charldorp observed. In particular, he sees a move away from proprietary software towards integration of all resources throughout universities within the same infrastructure. 'They expect the products that they use to integrate with their infrastructure,' he explained. 'Only by enlarging the scale of our operations can we make the resource investments needed to stay ahead in the market.'

OCLC PICA has retained both the Sisis and FDI names and says that it is committed to supporting existing product ranges. However, van Charldorp said that the companies will converge products. 'This will mean that we will have spare capacity to invest in new products,' he explained.

A challenge for all suppliers

This potential to invest is important. 'All the library-management suppliers are facing this issue,' he continued. 'They must either carry on with existing products or develop new ones. Either way, they need to invest.' For this reason, van Charldorp expects that there will be more consolidation in this sector. 'The library-management market is still very fragmented and there are thousands of companies,' he pointed out. 'There are a lot of small companies outside Europe that we have never heard of.'

So what will happen to all these companies? Some could merge with or be acquired by larger companies - at the same time as OCLC PICA was buying Sisis, for example, the two biggest library-management companies, Sirsi and Dynix, announced their merger - but there are other approaches. 'Some will go out of business. Some will specialise in certain products. Most of them will probably already be having discussions with potential partners,' predicted van Charldorp. 'There is also an increasing cross-licensing of products,' added FDI's Murray.

And the ever-present topic of Google could also influence library-management. 'Google in its way is a threat to everyone but we must work with it,' said van Charldorp, adding that US-based OCLC, which is one of OCLC PICA's parent companies, is working closely with Google.

With so much changing in this industry there could be reason to be nervous but van Charldorp is confident about the part that OCLC PICA will play. 'There is a need for further consolidation and acquisitions in the future,' he said. 'We have taken the first steps and hope to continue.'