OCLC's competitive advantage

In a previous post, I mentioned the "cloud computing" aspects of the WorldCat.org platform when used in the form of WorldCat Local or WorldCat Group to replace an ILS based catalog. A couple weeks ago, I got some more thoughts together on this, but some other distractions pulled me away.

Last year, as part of my work with the Orbis Cascade Alliance's Catalog Committee, I got to survey the market for next generation library catalogs/discovery systems. In my mind, OCLC's WorldCat Group/Local option stands out against both the open source and commercial competition. Why? Because of network effects.

Competitors making products like ExLibris's Primo and Innovative Interface's Encore simply don't have access to the data that OCLC does, and neither does the open source community. OCLC's holdings data lets them do relevance ranking by the number of libraries that own the item. Its global database allows the potential of expanding a search beyond a single library or group of libraries to a global database with built-in ILL. WorldCat offers records that are updated and improved over time by shared cataloging, and the possiblity of enrichment of those records by web-scale social networking (reviews, tags, etc.). WorldCat is a living organism that can't simply be replicated on someone else's server.

These advantages are byproducts of the cataloging and resource sharing networks that OCLC has had in place for years. They are more about a community committed to sharing resources than about technology.

It's also about exclusive access to data, which fits in nicely with Tim O'Reilly's Web 2.0 tenant, data is the next Intel Inside.

Another way to think about this is that OCLC is in a position to be a sort of EBay for libraries. EBay is valuable precisely because of its wide user base. It is the dominant player in online auctions because it offers the widest possible marketplace for buyers and sellers. That same comprehensiveness and global scope also has value when building a search system for books and doing resource sharing.

Traditional ILS vendors have little tradition of sharing data between their customers. I really can't imagine Innovative Interfaces putting together any kind of product that involves mixing customers data (that weren't part of a consortium doing direct business with them). The whole idea of mixing customer data seems like it would run counter to traditional notions of enterprise level systems, and would really be hard for a longstanding software company to grasp (though I have to point out that Talis is very much an exception). Most customers buying enterprise software wouldn't want to share their data with peers anyway, right?

But that is really a non-issue for libraries, and precisely what this Web 2.0 world calls for, and what OCLC has been doing for a long time. OCLC has this valuable data, and great potential to develop things with it, as well as a general current towards network-level computing moving in its favor. When libraries compare OCLC's products with that of a traditional ILS vendor, they need to see that the OCLC product is more than technology. Rather, it is an extension of a community, a network. The commercial vendors just can't offer that.

OCLC doesn't really have a monopoly on bibliographic data. But they definitely are one of the largest players out there, and their data could put them way out ahead. They are in a position to create an impressive platform with their WorldCat.org line of products. As they do this, they should build it so that it's open enough that other companies and organizations can build products on top of it.

The model I'm thinking of is Flickr. Flickr is a great global platform for photo sharing, but through their API, Yahoo also lets other firms get in there and add value to it. OCLC should be build WorldCat as an information ecosystem that allows the library community to have a healthy marketplace of technology products. (They sort of have this model going with ILL, but there aren't too many competitors out there to OCLC's ILL management product, ILLIAD.) OCLC's new APIs for WorldCat are a sign that they are moving in this direction.

OCLC's competitive advantage in holdings data and shared cataloging applies largely to print materials. They really don't have any such advantage in the realm of electronic information: e journals, digital collections, etc.. They might be going after this with acquisition of companies like Openly Informatics and the ContentDM software, but even so, they are not in possession of data that gives them a competitive advantage in the same way as their cataloging and resource sharing networks. Many companies like ExLibris and Serials Solutions have e-serials holdings data. And data about library digital collections is generally open for harvesting/crawling.

Even in print material, Google Books could be a viable competitor to OCLC in the library search arena, especially because they have the advantage of full text searching. They have lots of data that OCLC doesn't. It would even be possible now with the Google AJAX search API to create a Google Book Search that linked back to your library catalog for books held in your library.