In a move that further consolidates the library automation industry, Innovative Interfaces, Inc. has purchased Polaris Library Systems. Innovative, one of the largest companies in the industry, with a presence in many international regions, and with customers from all types of libraries significantly strengthens its presence in the US public library arena by acquiring the company that has performed well in this sector, winning the majority of municipal library procurements in recent years. The acquisition marks further expansion of Innovative since it was sold by co-founder Jerry Kline to private equity investors. Previous expansion included opening international offices in Dublin, Ireland and Noida, India.
Innovative, employing 410 at the end of 2013, ranks as one of the largest companies in the industry. A mid-sized company, Polaris employs just under 100 total employees, but has seen strong momentum in the public library automation sector, primarily in the United States, with a growing presence in Canada. In addition to its key clientele of public libraries, Polaris has been selected by some smaller academic libraries. Even with the acquisition of Polaris, Ex Libris remains the largest in the industry when measured by personnel employed with its workforce of 536.
Through a mid-sized company, Polaris has been able to achieve a disproportionate impact in the public library automation sector. In recent years, Polaris has been selected by many major municipal libraries, including Boston Public Library, Columbus Metropolitan Library, Phoenix Public Library, and Miami-Dade Public Library. Last year both the Salt Lake City Public Library and the Salt Lake County Public Library separately selected Polaris. The Illinois Heartland Public Library System, the largest consortium in the United States selected Polaris and completed its implementation of Polaris in 2013.
The acquisition of Polaris Library Systems significantly strengthens Innovative’s position in the public library automation sector. By the end of 2013, there were over 400 installations of Polaris serving 1,225 libraries representing a total of 2,811 branches. Innovative reports over 1,300 libraries using Millennium and 336 using Sierra. While Polaris focuses primarily on public libraries, Innovative’s products are used by all types. Prior to the acquisition, the majority of Innovative’s customers were academic libraries. The addition of the libraries using Polaris results in roughly equal numbers of public and academic libraries within the company’s customer base.
Throughout its business history, Innovative has followed a pattern of organic growth by adding new customer libraries year-by-year rather than through business acquisitions. Its only previous acquisition took place in 1997 when it purchased SLS Information Systems, a UK-based company that developed the LIBERTAS ILS. The acquisition of Polaris as well as its international expansion confirms that under its new ownership Innovative has entered a new and more ambitious chapter of business development.
According to Kim Massana, President and CEO of Innovative, “Combining the two companies will have a positive impact for libraries. Both share key values, that of collaboration with customers, providing excellent service, and delivering high-quality products and services. Technologies from each company can work together to respond to key trends happening in libraries today, especially related to delivering library services through Web-based technologies.”
Products and Technology
Any business acquisition in the library automation industry raises concerns with libraries using the products of the companies involved regarding their ongoing support and development. Innovative asserts its commitment to continue to develop and support the products of Polaris as well as its own for the foreseeable future. It is in the company’s own interest to do so, since libraries are likely to move to the competition should their automation strategies see abrupt disruption. Rather, Innovative plans a longer term development agenda that will result in a new platform that will be advantageous for its library customers.
The long term strategy for the combined company will include the creation of a next-generation product that will eventually replace the strategic automation systems of both companies. Innovative has developed Sierra as the successor to its Millennium ILS and has seen enormous success in its adoption. The planned multi-phase development cycle for Sierra is still underway. Sierra, for example, still relies on graphical Java-based staff clients, with Web-based interfaces planned for a subsequent phase. Polaris has already initiated development on a new set of Web-based clients for Polaris, branded as LEAP. The design and development efforts that Polaris has devoted to LEAP will provide Innovative with technologies consistent with its own product roadmap. While Innovative mentions its intentions for a new unified platform, no specific technical details or development roadmap has been charted at this early date. In the interim, Sierra and Polaris will continue to be developed, supported, and marketed.
Polaris’ launched LEAP in February 2014 to provide Web-based staff interfaces in addition, or instead of, the Windows-based staff client software. LEAP was designed to operate with the server component of the Polaris ILS. Libraries will be able to use the Web-based LEAP modules in parallel with the traditional Windows-based Polaris staff modules.
In the shorter term, a first step of integration between the products of Polaris and innovative will involve making the LEAP circulation client operate with Sierra. Polaris is well underway with the development of the Web-based LEAP circulation module which remains on track for release in 2014 as previously scheduled. (See the December 2013 issue of SLN for more information on LEAP.) According to Bill Schickling, LEAP was designed to operate via the APIs of Polaris and can be extended to also work with Sierra APIs.
The two companies have historically built their products for different operating environments: Innovative has built Millennium and Sierra for Linux and other variants of Unix while Polaris has relied on Microsoft technologies. The Polaris ILS, launched in 1997, is based on the Microsoft components, including the Microsoft SQL Server as its relational database and the .NET services-oriented architecture. The staff client interfaces have also been deployed for the Microsoft Windows family of desktop operating systems.
The companies have both recently implemented similar development methodologies, having both moved to Agile, where software is developed in short well defined sprints rather than building large blocks of functionality in what is often called the waterfall method. Both companies have also implemented the same framework, called Scrum, and Jira for tracking and managing software development tasks.
Transition of Ownership
Through a transaction that closed on March 31, 2014, ownership of Polaris changed hands from its Syracuse-based private investors to Innovative Interfaces, which is in turn owned by private equity investors, HGGC (formerly Huntsman Gay Global Capital) and JMI Equity. Financing for the purchase of Polaris was executed by Innovative Interfaces without additional investment from its private equity owners.
Polaris was previously majority owned by Jim Carrick and Andy Gorelik, with current and former Polaris executives holding partial equity. Polaris executives with minority stake in Polaris included Bill Schickling, Jim Mieczkowski, and Kevin Bryans. This group of investors gained ownership of the company in December 2009 from The Croydon Company, an entity that retained ownership of the library automation division of Gaylord Bros. after it was sold to Demco.
Carrick and Gorelik exit their involvement with the company following this transaction. Prior to their investment in Polaris, Carrick and Gorelik were CEO and COO, respectively, of Syracuse-based Strategic Computer Solutions which was acquired in September 2007 by Sirius Computer Solutions, Inc. Kevin Bryans was also associated with Strategic Computer Solutions as its Chief Financial Officer.
Going forward, Polaris will no longer operate as an independent company, but its executives, personnel, products, and services will become part of Innovative. Administrative functions such as finance and personnel will be subsumed shortly after the sale, as is common with any business acquisition. Product development, support, and sales will be integrated over a longer period.
Bill Schickling, President and CEO pf Polaris Library Systems, will join Innovative’s executive management team as Vice President, Public Library Products. Schickling has been with the company since 1987. Scott McCausland, VP of Sales for Polaris will now report to Christopher Le Blanc, Innovative’s Senior Vice President of Global Sales. Other Polaris executives will also continue, including Jim Mieczkowski, and Jodi Bellinger, though their specific roles for Innovative have not been announced. Andy Gorelik, Polaris Vice President responsible for business operations will depart from the company. Neil Block, a former Innovative executive that joined Polaris in January 2013, has recently left Polaris to join EBSCO Information Services as Vice President of Discovery Innovation, Academic Libraries, USA & Canada.
The workforce for Polaris, including sales, marketing, and development are expected to remain largely in place. The Syracuse, NY office that served as the headquarters for Polaris will function as the east coast operations center for Innovative. At least for the near term, customer support for Polaris products will continue to be provided by the company’s personnel in Syracuse. How development, sales, and support are integrated into Innovative’s processes in the longer term has not yet been finalized.
One of the key strengths of Polaris lays in its customer support capabilities. The company has consistently been ranked at the top performer in the mid-sized to large public library category by its customers in the annual “Library Automation Perceptions Report” conducted through Library Technology Guides (http://www.librarytechnology.org/perceptions2013.pl).
Polaris Company Background
Polaris ranks as one of the pioneers of the library automation industry, founded in 1974 as a business of Gaylord Bros. a large company that manufactured and sold library furniture and supplies. Gaylord Bros., founded in 1896, created in the 1930s one of the earliest automation devices for library circulation, the Model C Book Charger, a mechanical date stamping system. The company’s computer-based automation division, Gaylord Information Systems, was established in 1974 by Morris Bergreen.
Gaylord Information Systems became established as a major provider of computerized library automation systems for public libraries, beginning with the Gaylord System 100. This product included computer equipment installed on site in the library for managing real-time circulation transactions supplemented by a mainframe computer housed at Gaylord’s headquarters that handled daily batch processes.
The company introduced its first fully integrated library system, called Galaxy, in 1989. Development of Galaxy was led by Bill Schickling. Galaxy operated on the VAX/VMS platform, a mid-range computing environment offered by Digital Equipment Corporation commonly used for business applications from the mid-1970-s through the late 1990’s. Interest in VAX/VMS declined as Unix rose to become a the dominant operating environment.
With the demise of VAX/VMS, Gaylord launched the development of an entirely new system rather than port its existing Galaxy ILS to a new operating environment. Launched in 1997, the Polaris ILS was developed using the client/server architecture which was emerging as the preferred computing environment to succeed the terminal-based systems of the previous generation. Gaylord chose to develop Polaris using Microsoft Windows technologies, which had become a preferred platform in the mid-sized business sector, rather than Unix which as favored for larger-scale business and academic computing at that time. Polaris has been continually enhanced over its 17 years of subsequent development and has proven able to sustain the transaction load of some of the largest and busiest public libraries in the United States. Recent developments include the integration of the discovery and lending of e-books into its online catalog interfaces.
On the business front, Gaylord Information Systems saw a major change in May 2003 when its parent company, Gaylord Bros. was sold to Demco, a competing library furniture and supplies company. The library automation division was not included as part of the sale, but remained under the ownership of The Croydon Company, a holding company owned by the families of Martin Blackman and Morris Bergreen. Since the Gaylord brand was transferred to Demco, the automation company was renamed to GIS Information Systems. Shortly after this business transition, Bill Schickling, previously responsible for product development, was named President and CEO. In May 2005, the company began doing business as Polaris Library Systems, tapping the strength of the brand of its flagship product.
Polaris Library Systems saw its next business transition in December 2009 when a group of private investors, led by Jim Carrick, acquired the company from Croydon Company. Positioned as an employee buy-out, Schickling and other Polaris executives also participated in the acquisition and became minor shareholders in the company. (For additional information on this acquisition, see the April 2010 issue of SLN.)
Innovative Corporate Background
Innovative Interfaces was founded in 1978 by Jerry Kline and Steve Silberstein to develop technology-based products for libraries. The company’s initial product was developed to transfer records from OCLC to the LIBS100 circulation system from CLSI, a major library automation product of that era. Innovate continually expanded the product to include additional capabilities. In 1982 the company launched INNOVAQ System 100 to handle the acquisitions of library materials. INNOPAC was launched in 1997, initially providing an online catalog and expanding over time to become a full-fledged integrated library system.
With the advent of the era of the client/server architecture, Innovative interfaces launched Millennium in 1997, which included a new set of Java-based graphical clients to replace the terminal interfaces of INNOPAC. Innovative launched Sierra in May 2011, providing the company’s next-generation flagship automation system with the mature functionality of Millennium through a new technology platform based on the services-oriented architecture.
In addition to its flagship automation products, Innovative has developed the INN-Reach resource sharing environment (launched in 1991), the Encore discovery interface (2006), Content Pro digital collections management system (2008), and Decision Center collection development application (2012). SkyRiver, was launched as a separate company in 2009 to provide bibliographic services and was folded into Innovative in 2013.
Innovative operated under the ownership of its co-founders Jerry Kline and Steve Silberstein from 1978 through 2001. That year Kline gained full ownership acquiring Silberstein’s shares of the company.
In March 2012 two private equity firms, Huntsman Gay Global Capital and JMI Equity acquired majority ownership of the company with Kline retaining a minority stake. In a subsequent transaction, Kline divested his remaining interest in the company in February 2013, ending his involvement with the company he co-founded.
Innovative Interfaces now operates under the leadership of Kim Massana, appointed in August 2012 as President and CEO, reporting to a board of directors representing the interests of HCCG and JMI Equity.