Library Automation Firms Seek Strategic Advantages

COMPETITION is intense in the library automation industry. One result is that the lineup of hardware and software vendors has been changing almost as rapidly as the tide. ``It's becoming very confusing,'' says Frank Bridge, president of Frank R. Bridge Consulting Inc., a library technology and management consulting firm in Austin, Texas.

``There are only so many vendors that an industry can sustain,'' he says. Today's 23 primary library system companies may eventually be whittled down to just six, plus a few smaller players, Mr. Bridge predicts. These survivors will be ``purveyors'' of library automation, offering a variety of products.

Among recent major alliances: Ameritech Information Systems of Dublin, Ohio, acquired Dynix Inc. of Provo, Utah; Canadian-based Gaec Computer Corporation Ltd. purchased CLSI Inc., located in Newtonville, Mass.; and Data Research Associate Inc. in St. Louis acquired INLEX Inc. of Monterey, Calif.

Bridge expects further alliances between vendors that once were competitors. Companies are disappearing because they are either doing well or doing poorly, he says. In some cases, company founders are cashing in on their success. In others, the firm may not be able to survive on its own and is taken over.

Consolidation is positive, signaling a ``growing maturity in the industry,'' says Kate Noerr, chairman and chief executive officer of IME Limited in London. Its wholly-owned subsidiary, IME Systems Inc. in Dedham, Mass., is a software-only vendor with an installed base expected to surpass 2,000 units worldwide in 1993.

``It's a good sign that companies are being bought and sold,'' Ms. Noerr says. But the shakeup has left some users uneasy. In 1992, the library automation industry was a $270 million market, up from $257 million in 1991, Bridge says. Customers include academic, public, government, institutional, and corporate libraries.

Revenues for the industry in 1993 will probably be flat because, while more systems are being sold, they are smaller and cheaper, Bridge says. Hardware costs are falling, and software prices may rise only slightly. ``The earnings prospects for these companies [are] declining,'' he concludes.

But demand for library automation products continues. A computer-literate library with a well-trained staff can filter huge amounts of information drawn from public, private, and commercial data bases.

Corporate users in particular need ``to gain better access, more rapid access, more efficient access to information so that they can cope with the sheer volume of information that's coming out,'' says Lynda Moulton, founder and president of Comstow Information Services in Harvard, Mass.

Comstow focuses on the business segment of the market and has an installed base of 72 units in North America. The firm offers two lines of software products, ranging in price from $10,000 to $90,000, depending on the hardware for the system and the number of users allowed to access it simultaneously. Materials that can be indexed and searched include books, journals, technical reports, patents, and drawings.

Using and controlling information, not just data, can provide important strategic advantages, Moulton says. Companies that recognize this ``know that information is going to be at the heart of whatever business decision they make,'' she says.

Companies like Comstow's customer Bolt, Baranek and Newman Inc., a Cambridge, Mass., communications company, use a variety of on-line solutions. Comstow's Bibliotech product performs the ``traditional'' library functions, such as cataloging and checking materials in and out, says library manager Marian Bremer. The BBN library also uses CD-ROM products available from commercial vendors, and it searches the Internet to locate external information.

Altogether, technology advancements have expanded the reach of business libraries, which are now able to link departments to each other and to the outside world. ``It's becoming a networking issue as much as a library automation issue,'' Bridge says.