Re: mergers and acquisitions
Andrews, Mark J. <MarkAndrews <at> CREIGHTON.EDU>
2007-01-08 14:23:15 GMT
Here are my musings - I revised a post I made to another list on this
topic. MJA
-----Original Message-----
My past experience with mergers and acquisitions is that certain
financial and organizational decisions are held fairly close to the vest
by management. The last thing a manager in any organization wants -
whether for-profit or non-profit - is to scare people. What do people
want? Freedom AND to be included in major decisions. What scares
people? Uncertainty. People who are scared by uncertainty vote with
their feet - they decide not to participate. When push comes to shove,
"scary" and uncertainty are bigger motivators than freedom and
inclusion. That's just human nature.
A race can start where both customers and staff can bail out. Once
those types of bleeding start they are hard to stop, and they feed off
each other. Staff bail and customers may say "Gee, I can't get the
service I'm used to, so lets look at other products." Customers bail
out and staff say "Gee, why should I push this rock up hill anymore -
I'm not getting paid any more, and the work has gotten harder, with no
relief in sight." An internal dynamic can start between developers and
support people, too, where if a programmer leaves, and takes a lot of
historic knowledge of a product with them, support folks get
demoralized, 'cause the only person who can fix long-standing problems
just quit. Conversely, if support folks leave, other staff may be
pressed in to service they didn't sign on for. So they are de-motivated
and start to look for work.
Then there's management, or perhaps I should say "leaders with
managerial skill." A leader has some handle on the following:
Vision
Mission
Leadership
Planning
Management
Evaluation (in industry you'd evaluate by the numbers, on at-least a
quarterly basis, and annually).
Into this mix I'd put "resource allocation," maybe between Planning and
Management. Assigning resources to the plan - dates and dollar amounts
(both expenses and income) begins to give you some idea of what you need
to do to make money, and how much money you need to achieve a specific
milestone. Total those numbers up by quarter and year and you begin to
get some sense of gross & net income. Of course once all this hits real
people in the real world, it all goes to hell. The first casuality of
warfare is The Plan....
I look for business people who have their eyes on the ball DAILY. They
know exactly where they are going. They have a very good idea of how to
get there. They have plans A, B, C, D and all the way to Z. They are
not too open about all this - competitive market and all. They know how
to impart a feeling of confidence to customers and staff with a feeling
of ease and competence. They are open about mistakes and publically
rectify them. I've never met anyone perfectly like this. Lord knows
its not me!
After 9 years in industry I try to take people at their word; I keep my
ears open and my mouth shut (well, most of the time). As for the truth
of a situation, it is usually right in front of us, is it not? Its an
open secret that the ILS marketplace has collapsed. The market has
decided that there were too many vendors and too many products. Vendor
consolidation has proceeded apace; product consolidation is about to
proceed apace.
So what's going to happen? Beats me. I think about this stuff daily,
if not hourly <grin>, and I've been a student of the ILS market since
1986. My educated guess is something like this:
III - Will continue to flog Millenium and add functionality to it.
Yeah, there's a certain measure of arrognance to Innovative, and I've
always understood they run a body shop in Emmeryville, which is why I
never wanted to work for them. But they are an arrogant body-shop which
seems to delivery some semblance of working product on time, and they
make money.
The Ex Libris Group - they have two similar product lines in Aleph
500 and Voyager. Only one will survive. I don't know which one.
SirsiDynix - the company has several aging products (the dregs of DRA
Classic and the Dynix ILS, maybe bits and pieces of MultiLIS. Certainly
no Inlex/3000 sites left (may its memory be a blessing to us) to contend
with. There's also three enterprise products - Horizon 8, Cornithian
and Unicorn, and a host of add-on products. I'll bet that somebody has
penciled out income-changes-over-time for each product, and has rough
idea of how long each product will remain profitable. Once a product
costs more to support than the revenue it brings in, it does nobody any
favors to keep an old product around too long.
As for the niche vendors, in my view:
- Talis doesn't do business in North America, unfortunately.
- I'm not sure there's enough left of Geac, or whatever they are
called these days, to do any business with.
- VTLS is hanging on somehow. They seem to take interesting,
expensive projects, and have, historically, not overextended themselves
in the marketplace. I think of VTLS as the last of the "boutique" ILS
vendors.
- Folks like EOSi (you may remember them as DataTrek) and the wide
array of PC-based systems, are either too small or too "vertical" to
consider, but I digress....
However, most places I worked went out of their way to keep old products
around long past the "expiration date" because uncertainty drives
customers away, and who needs to give revenue to the competition? This
was more of a problem when the ILS market was bigger, but with so few
players now, revenue pressure - pressure a library can use to put
pressure on their vendor to do or not do something - mitigates *against*
migration to another enterprise ILS system. Why? Migrating from one
enterprise ILS to another is an expensive, time-consuming process - I'd
guess $1 million and 2 years for libraries of a certain size. I'm not
saying such migrations are impossible, only that they are a Great Big
Deal. I've been through these things on both sides of the
library/vendor "divide." They are no longer fun. Would I NEVER do it?
I can't say - that's not my decision. I can say I take a long, hard,
cold jaundiced look at the ILS market every single day to see what my
options are, and my options are fewer with each successive corporate
merger.
What about FOSS products? Well, FOSS products are still products, and
the folks who create them, as altruistic as they appear to be, are not
entirely full of the milk of human kindness. Software is a tool, a tool
that solves a problem. The most widely used FOSS offerings in the ILS
world - Koha and Evergreen - are not functionality complete compared to
"mature" products. My current definition of "functionally complete" is:
* Has the full compliment of functionality customers have come to
expect over the years - a public catalog, cataloging, circ, acq,
serials, a report writer, Z39.50 compliance, MARC21 import/export,
Unicode support, uses (and takes full advantage of) a modern, relational
database.
* Demonstrably scales well.
* Has a reasonable array of ancillary products.
* Is modestly hackable.
* Has some remote awareness of Open URL/Resolver, Digital Library,
Federated Search and Electronic Resource Management products. And JSR
168/268 portals, too.
That's the floor - it doesn't even begin to describe everything I'd
really like to do with an ILS these days. Of course there is no product
that remotely does all these things.
There's a lot of ferment in the market place re/FOSS products,
especially in the digital library, archive and respository niche.
Turning that into something that solves a problem without daily doses of
do-it-yourself brain surgery is not easy. In 1986 there might have been
as many as 20 ILS vendors. Now there are 3 in North America. I have
personal experience - as an employee - with three of those now-defunct
companies. Most of the dead ones died because they couldn't negotiate
the shoals of "no serials, acq, adhoc report writer (insert your
favorite missing functioality here)" on one side, and "relentless market
change on the other" - with "failure to execute" somewhere in the
middle. At this instant Koha and Evergreen occupy very small, very
specific niches in the ILS market (Evergreen's announcement that they
will with the University of Windsor on an Acq product notwithstanding).
Do those products solve problems and work? It appears so. Do they work
well enough to so solve MY problem? It appears not at the moment.
Where does this leave the push for a "next generation catalog?" As the
number of vendors and products shrinks, customers will have to find a
balance between the convenience of turn-key products and either a little
or a lot of local customization, with our without their vendor's
assistance. I think the key is the design principle behind Evergreen: a
platform you can use to build solutions to problems nobody has thought
of yet. Vendors will have to create similar systems to complete with
FOSS products; whether any of the existing system can be retrofitted
that way (for example, replacing BRS/Search with Lucene in Unicorn -
just an idea, nobody's doing this) remains to be seen. Customers will
also have to acquire people with skills like the Code4Lib gang to get
the functionality they want - we're going to have to build a lot of what
we want ourselves.
My 2 cents worth.
Mark Andrews
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