ifla satelliet florence09 disrupting libraries potential for new services

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Ken ChadDirector

Ken Chad Consulting [email protected]: +44 (0)7788 727 845www.kenchadconsulting.com

disrupting libraries: the potential for new services

IFLA. Florence 19th August 2009emerging trends in technology

PART 1models of innovation

sustainingdisruptive

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sustaining characteristics

• targets demanding high-end customers

• better performance

• incremental— year-on-year

• some innovations are breakthrough leapfrog-beyond-the-competition

• established companies almost always win

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disruptive characteristics

• not about better products to establishedcustomers

• not as good as current products

• ..but simpler, more convenient, less expensive, to less demanding customers

• entrant companies can win

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disruptive innovation

entrants to the market seek out non traditional markets that uniquely value the innovation, despite the limitations that make it unattractive

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disrupts.

it targets market segments unattractive (initially) to incumbent providers

it targets users who previously lacked money or skill to use mainstream products. These are the people that were conventionally thought of as 'non-consumers' for this type of product.

It is ‘good enough’ for low-end consumers They don't need a ‘fully feature’ product

it has a significant cost advantage

it targets under-served needs

It is simpler and more convenient to use than 'mainstream' products

a disruptive product or service….

disruption is positive. Customers like new disruptive products and

services

is the library market being disrupted?

A: yes

characteristics of a market ripe for disruption

• undifferentiated products where price is a main criterion

• a market full of M&A

• functionally rich products (cf. MS Office)

• marginal competitors are taking market share

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PART 2let’s look at these attributes in

the context of the library systems market

is it ripe for disruption?

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flikr http://www.flickr.com/photos/banoootah_qtr/843477991/


(1) undifferentiated products

‘Choosing a new ILS is a lot like choosing a rental car. . any ILS is

going to get you where you need to go …’ Andrew K. Pace. 2004 ...

Dismantling Integrated Library Systems. By Andrew K. Pace — Library Journal February 1, 2004.

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that ILS products all basically do the same things’

The Dis-Integrating World of Library Automation. By Roland Dietz & Carl Grant. Library Journal 15th June 2005 http://www.libraryjournal.com/article/CA606392.html

‘A significant proportion of libraries are considering replacing their LMS in the near term. They might [re] consider the value of this approach in a mature market with little

product differentiation’

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flikr


(2) A market full of M & A

(everyone –almost- has changed in the 3+ years)

changing ownership/M&A

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changing ownership/M&A2005

• June 2005: Sirsi and Dynix merge and become SirsiDynix

• November 05: Geac (now Infor) announces its acquisition by Golden Gate Capital, a private equity company.

• November 2005 OCLC Pica acquires Fretwell Downing (OLIB etc)

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• February 2006: Talis is “reconstructed”: the owners (BLCMP Ltd and an Employee Benefit Trust) vote to transfer ownership to a new company called Talis Group

• July 06: ExLibris acquired by Francisco Partners, a private equity company

• December 06: Endeavor acquired from Elsevier by ExLibris and Francisco Partners

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• January 2007: SirsiDynix acquired by Vista Equity partners, a private equity company

• June 07 Bowker (CIG) acquires MediaLabs (AquaBrowser)

• July 07 OCLC acquires remaining shares in OCLC PICA

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• Feb 2008: Axiell buy DS

• June 08: Civica management buyout with 3i equity

• August 08: Leeds Equity buy Ex Libris

• September 08 OCLC buy AMLIB

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in UK Higher Educationfour vendors have nearly 90% of the market

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UK HE Market Share Axiel

ExLibris (inc Endeavor)

Infor (formerly Geac)

Innovative Interface

ISOxford

OCLC Pica (FretwellDowning)

Payne Automation

SirsiDynix

Softlink

Talis

VTLS

Unknown

ExLibris 23%Talis 23%

Innovative 18%

SirsiDynix 23%

in UK Public Librariesfour vendors have 90% of the market

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UK Public Libraries Market Share

Bibliomondo

Civica

DS

Infor

In-house

Innovative

IS Oxford

RedSky

SirsiDynix

Talis

Axiell/DS 30%Talis 26%

SirsiDynix 23% Infor 10 %

the role of private equity

• ‘The discipline of private equity makes companies fitter, leaner and better able to compete.’ Ian Armitage, partner at HgCapital Quoted in Sunday Times on 18th February

• ‘Private equity buys an entire company… improves the companyand owns it typically for three to seven years. It then sells it or

takes dividends by refinancing it’. Stephen Schwarzman Blackstones. Quoted in Sunday Times on 18th

February

• ‘As a rule of thumb, unless a business can offer the prospect of significant turnover growth within five years, it is unlikely to be of interest to a private equity firm’. An introduction to private equity. The British Private Equity and Venture Capital Association

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(3) functionally rich products

http://www.flickr.com/photos/antmoose/19678543/

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The UK Core Specification ‘contains over 500 requirements covering the following main functional areas’

Bibliographic database management OPAC and end user services

Circulation control Acquisitions Serials control

Document delivery and inter-library loans Management information


(4) marginal competitors taking market share

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‘open source systems such as Koha and Evergreen have entered the marketplace as routine options. ’

‘Investing in The Future: Automation Marketplace 2009. By Marshall Breeding. Library Journal, 1st April 2009. http://www.libraryjournal.com/article/CA6645868.html

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…but is the market itself failing?

‘…we’re seeing the seeds of a new revolution being sewn [sic]. As the goal of some companies becomes once more attuned to trimming costs... libraries and their users suffer. In some cases, cost savings are being generated for the company by consolidating products… When this happens, it is short-term profit that is the objective rather than serving the long-term mission of libraries.

These companies have become unresponsive to the collective goals of our profession and, like so much of our society these days, are no longer focused on the “we” but the “me”. It is a sad state of affairs and one that will not be tolerated’

‘A symphony out of tune: when companies go deaf’. Carl Grant. Care Affiliates blog. 4 July 2007.

www.care-affiliates.com/thoughts/archives/6

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is the market failing?

‘We feel that software companies have not designed Integrated Library Systems that meet the needs of academic libraries, and

we don’t think those companies are likely to meet libraries’ needs in the future by making incremental changes to their products.Consequently, academic libraries are devoting significant time and resources to try to overcome the inadequacies of the expensive ILS products they have purchased. Frustrated with current systems, library users are abandoning the ILS and thereby giving up access to the high quality scholarly resources libraries make available’

Duke University Openlib project

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what about libraries themselves?

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‘Libraries, at this point in their history, are exactly the kind of successful organizations that Christensen predicts will stumble and fail.’

'The Innovator's Dilemma: Disruptive Change and Academic Libraries.' By David W. Lewis. Library Administration & Management 18(2):68-74 Spring 2004.

PART 3some wider (disruptive) context

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some of what follows may make you feel uncomfortable……..libraries and librarians are

being challenged

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‘For more than 150 years, modern complex democracies have depended in large measure on an industrial information economy…….In the past decade and a half we have begun to see a radical change in the organisation of

information production. Enabled by technological change, we are beginning to see a series of economic, social and cultural adaptations that make possible a radical transformation of how we make the

information environment….’

Yochai Benkler a Professor of Law at Yale Law School

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everywhere content is increasingly digital

‘Knowledge has been shackled to the physical. Now that the digitising of information is allowing us to go beyond the physical…..the shape of our knowledge is changing’. [P 71 ]

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‘cheap, utility-supplied computing will ultimately change society as profoundly as cheap electricity did’

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users are not just generatingcontent they are also organisingcontent (via tags etc)

(isn’t organising content what librarians are supposed to do?)

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‘ with less than 10 people [Flikr] had millions of users generating content,

millions of users organising that content for them, tens of

thousands of users distributing that across the internet…’

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‘As user generated content continues to be

commercialised, it seems the largest threat posed won’t be to big corporations but to individual professionals—to the

journalists, editors …researchers

…librarians and other information workers

who can be replaced by….people not on the payroll’

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removing barriers

‘.. technology is unleashing a capacity for speaking

that before was suppressed by economic constraint. Now people can speak in lots of ways they never before could have, because the economic

opportunity was denied to them’

Mother Jones Magazine (website)

Interview with Lawrence Lessig: Stanford Law School Professor, Creative Commons Chair

June 29, 2007

http://www.motherjones.com/interview/2007/07/lawrence_lessig.html

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participation

‘We-Think changes how we access and organise information and so is bound to disrupt libraries and librarians’

‘ The library of the future will be a platform for participation and collaboration with users

increasingly sharing information amongst themselves as well as drawing on the library’s resources’

Charles Leadbeater. ‘We Think. The future is us’ Profile Books Ltd. 2008

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challenges to copyright

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Copyright law has not responded with common sense as it had to do in the past when technology changes challenged established law—e.g. over the issue of the

‘trespass’ of airplanes over land

We live life against the law in a new age of prohibitions --this is dangerous.

Larry Lessig: How creativity is being strangled by the law. http://www.ted.com/talks/view/id/187

creativity is being strangled by the law

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http://www.boingboing.net/2009/04/22/eu-votes-tomorrow-on.html

the rise of the ‘Pro-Am’ Charles Leadbeater Think tank Demos

Creativity is not about ‘special people’

Most creativity is collaborative

Create a platform for people to share

Big new ideas don’t generally come from big organisations. Their culture has an inbuilt tendency to try to reinforce past success

Intelligent closed organisations will move toward being open

Complete corruption of the ideas of patent and copyrighthttp://www.ted.com/index.php/talks/view/id/63

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disrupting Higher Education?

‘set learning free?…we invite teachers, students, and researchers to join us in creating open educational resources and collaborative learning communities’ ke

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user behaviours are changing

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• libraries have historically done well in adapting to the needs of the user

• however, there are now many competitors and the absence of a user based approach and user intelligence beginning to tell

• threat from a combination of search engines, social network sites and publishers

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How users behave (and what libraries should do)’. David Nicholas. CIBER, UCL Centre for

Publishing, School of Library, Archive and Information Studies University College London.(Presented at Sustaining the Digital Library Symposium. Edinburgh University 2007)

it’s my library…so make it personal…

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…delivered to me where and how I want..

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PART 4disrupting librarians

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when we change the way we communicate we change society

‘..when a profession has been created as a result of some scarcity, as with librarians or television programmers, the professionals are often the last ones to see it when that scarcity goes away. It is easier to understand that you facecompetition than obsolescence’

‘Here comes everybody.’ By Clay Shirky. Allen Lane. 2008

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when we change the way we communicate we change society

‘…..in some cases the change that threatens the profession benefits society.

‘Here comes everybody.’ By Clay Shirky. Allen Lane. 2008

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PART 5…thinking ‘disruptively’

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the 'principles' for disruption

• ‘overshooting’ creates the conditions for disruption

• disruption comes from breaking the rules

• business model innovation often powers disruption

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• overshooting creates the conditions for disruption

= Products that pack too much performance for the average person to use

so create simple products that are easy to use

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• disruption comes from breaking the rules

e.g. Nintento Wii is NOT about better graphics

so look at the new approaches not based in the past—change your mindsets

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The 'principles' for disruption

• business model innovation often powers disruption

e.g. business model differences, not technological prowess can throw incumbents off balance..think about ‡biblios.net vs. OCLC

Is there an innovative way to pay the costs of innovation or find a new delivery channel?

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simplicity, accessibility, affordability are hallmarks of disruption

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are you ready to innovate disruptively?The 'Lewis' test for libraries(From 'The Innovator's Dilemma: Disruptive Change and Academic Libraries.' By David W. Lewis, Dean of the

Indiana University-Purdue University Indianapolis University Library. Library Administration & Management 18(2):68-74 Spring 2004.)

1. Can you consider buying half as many books as you now do and investing the money in other ways of providing information to library users?

2. Can you act on what you learn from freshman when what they teach you runs counter to what the faculty say they want?

3. Can you trust small groups in your library to develop products and services, or does everyone on the staff have to buy in to everything?

4. Are you prepared to spend money to develop exploratory projects knowing that one in three will fail?

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PART 6acting ‘disruptively’..some first

steps (can we, in the library domain, deliver 'disruptive' products and services?)

Based on ‘the innovators guide to growth.’ By Scott D Anthony et al. Harvard Business Press. 2008

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allocate resources

Resources for innovation will almost certainly need to be taken from the core 'business

organisations in the 'early stages of its innovation journey' should dedicate a group of people to innovation.

treat the resource allocation to innovation as a capital rather than as an operating expense,

Ring fencing the resource is important, especially where organisations face trouble in their core business.

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look to ‘non consumers’

Take away constraints on consumption. Constraints are typically around:

skills

wealth

access

time

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don’t analyse ‘needs’

take a ‘job-to-be-done’ approach.........

‘customers don’t want a 10cm drill bit they want a 10 cm hole’

So (by analogy) customers don’t want a ‘next generation’ catalogue...they want a.......???

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can you deliver that disruptive curved ball ?

'Smooth curve #1.' By theothermattm. http://www.flickr.com/photos/theothermattm/2748026862/

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Ken ChadDirector

Ken Chad Consulting [email protected]: +44 (0)7788 727 845www.kenchadconsulting.com

disrupting libraries: the potential for new services

IFLA. Florence 19th August 2009emerging trends in technology

ifla satelliet florence09 disrupting libraries potential for new services

Technology