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Magazines > Information Today > November 2008
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Information Today

Vol. 25 No. 10 — November 2008

FEATURE
OCLC: An Enterprise With a Global Perspective
by Miriam A. Drake


When Robert “Jay” Jordan became president of OCLC in 1998, he found an organization with a talented, dedicated staff focused on North America. In the 10 years he has been president, he has transformed the company into a global enterprise and created greater value for libraries and the public.

OCLC, originally the Ohio College Library Center, was created in 1967 by the presidents of Ohio colleges and universities. They saw that by creating a computerized system they could eliminate redundant tasks so libraries could share resources and reduce costs. In 1977, regional networks around the country were interested in joining OCLC; a national system
was needed. The Ohio members of OCLC changed the structure to let libraries outside Ohio join and participate.

In 1981, the legal name of OCLC was changed to Online Computer Library Center. But its objectives have remained consistent since the beginning: “Establish, maintain and operate a computerized library network to promote the evolution of library use, of libraries themselves and of librarianship, and to provide processes and products for the benefit of library users and libraries.” The context for OCLC decision making is found in objectives, such as “reducing the rate-of-rise of library per-unit costs, all for the fundamental public purpose of furthering the ease of access and use of the ever-expanding body of worldwide scientific, literary and educational knowledge and information.”

OCLC is a 501(C)(3) not-for-profit organization. People in the taxpaying, for-profit world occasionally say that its not-for-profit status gives OCLC an advantage. Specifically, they think that OCLC does not pay taxes and does not have to earn a profit. However, OCLC actually has for-profit subsidiaries and pays taxes for those entities, and OCLC must also earn excess capital to finance expansion and development. The critics often do not acknowledge that the not-for-profit status carries the burden of having to achieve a public educational purpose that OCLC fulfills through services to libraries and the distribution of WorldCat, a catalog of global library resources, free to the public.

Aspiring to a World View

When Jordan walked in the door a decade ago, he says he found “an organization that was very stable from a financial standpoint and a technology infra­structure standpoint.” He adds, “I found long-term, very dedicated employees and a governance structure that worked. What I didn’t find was any global activity, enough new product development, or refreshing of current offerings.”

Between 1998–1999 and 2006–2007, the number of participating libraries doubled from 30,000 to 60,000 in 112 countries. In 1998, the members’ council, one of OCLC’s governance arms, had only a few members from outside the U.S. Now there are 15.

Jane Ryland, a member of the OCLC board of trustees and a consultant to Internet2, says, “OCLC is quite different from when I came on the Board in 2000.” She points to the global growth at OCLC. “A lot of national libraries outside North America have begun loading their rec­ords into the database and that is creating a much more valuable global resource,” she says.

And this global perspective at OCLC is becoming more accepted and valued. Jordan says the acquisition of PICA, a foundation in the Netherlands, gave OCLC an operating company with offices in Europe and Australia. Additional employees in other countries helped develop a global perspective within OCLC and increase awareness of the need for global information resources. The global perspective is also reflected in the new governance structure. A global council, and various regional councils that will elect members to attend the annual global council meetings, replaced the members’ council. “The Global Council’s principal responsibilities are to elect six members of the Board of Trustees and ratify amendments to the Articles of Incorporation and Code of Regulations of OCLC,” according to the organization’s bylaws.

OCLC’s global expansion has clear benefits for libraries and their users. Jennifer Cargill, dean of the library at Louisiana State University, talked about the benefit to scholars, students, and faculty. “OCLC provides a window to global information resources and where and how they are available,” she says. WorldCat clearly is a valuable tool for research­ers who need global resources.

Keeping the Focus on the Public

According to Jordan, OCLC’s acquisitions, including NetLibrary, Strata Preservation, Research Library Group (RLG), DeMeMa, and EZproxy, have also intensified the organization’s global presence. “We have been opportunistic but very close to our center and public purpose,” he says. “We think we will further add to the mission by reducing redundancies in library work flows and in helping us to attract and support more libraries in the cooperative on a global scale.”

In the early days, the relationship between OCLC and the RLG was difficult and often competitive. The merger of RLG and OCLC in 2006 has added new capabilities and contacts to OCLC while allowing RLG to pursue its unique programs. “RLG brought a lot of really exceptional employees to OCLC,” says Jordan. “What made them exceptional was that RLG had paid attention to multiple types of memory institutions over time.” Access to major foundations is another plus of the RLG merger, which broadened Jordan’s vision. “We have to look at a broader set of institutions if we are going to create value and preserve the useful history of the planet.”

Even relations between OCLC and the regional networks (SOLINET, Amigos, BCR, Nelinet, et al.) have been contentious for many years. As OCLC grew, it relied on regional networks for marketing, distribution, and customer support. The networks derived revenue from surcharges added to OCLC charges and member dues.

Redefining the Pricing Structure

In recent years, some libraries were concerned because libraries in different parts of the country were being charged different prices for the same services. These libraries also were not satisfied that they were receiving value for the surcharges they were paying. OCLC is implementing a new pricing system in which all libraries will pay the same price for the same service. Networks may not add surcharges, but they may charge fees for OCLC services, such as for billing, training, and installation. If networks opt for the billing services, they will be responsible for billing and collecting from the libraries in their areas and will receive a percentage of the billings. Reactions of network directors have been mixed.

Directors are concerned that they will have less cash flow and that they will have to diversify and develop new business to survive. “Some networks may merge and others may disappear because they cannot stand on their own,” says Jordan.

Network directors, such as Bill DeJohn, executive director of MINITEX (a University of Minnesota-supported network), talked about their changing relationships with OCLC, especially how networks add value to OCLC services. According to DeJohn, “Our value-add is helping local libraries make better use of OCLC services.” Other directors emphasized their knowledge of local library operations, staff, and needs.

Another area of interest was the reaction to the changes OCLC is implementing with networks. Brenda Bailey-Hainer, president of BCR, says, “Changes will be positive for libraries.” She points out that Thomas Friedman, The New York Times columnist and author of international best-seller The World Is Flat: A Brief History of the Twenty-First Century, wrote about the world being flat, globalization, and how OCLC needs to be an international organization. BCR was established in 1935, 32 years before OCLC and other regional networks. It was created “to provide cost-effective training, consulting, and information services for libraries and to promote resource sharing in the library community.” Like OCLC, BCR also offers a broad range of services to libraries and other institutions, so the collaboration between OCLC and BCR produces significant value for libraries.

About 2 years after Jordan became OCLC president, Tom Hogan, president and CEO of Information Today, Inc., interviewed him to find out more about his plan for First Search. In the interview, Jordan indicated that OCLC was providing value-added databases “through a common user interface,” adding that “there’s still value in the aggregation activity, and the market validates this notion.”

Linking Databases to Libraries

Eight years later, Jordan remains enthusiastic about First Search, which functions as a gateway to 85 third-party databases. “It is another alternative for libraries to subscribe to third party content,” he says. Libraries can access only those databases to which they subscribe. First Search uses WorldCat to provide a link from the databases to the subscribing library.

OCLC’s most valuable asset is WorldCat, a global catalog of library content and collections available free to the public through www.worldcat.org, Google, Yahoo!, and libraries. WorldCat leads a searcher to the nearest library that holds the desired item. If users do not want to go to a library, they may go to Google Books or to an online bookseller. WorldCat includes diverse collections in libraries in many languages and many formats including, paper books, downloadable audiobooks, and videos. Linking WorldCat to libraries increases visibility of libraries worldwide and opens library collections to more people. Special collections in librar­ies often are not known and rarely accessible. WorldCat lets people know about these unique collections, rare books, and other items.

Print on demand is likely to become widespread in libraries and bookstores for out-of-copyright and public domain materials. Inclusion of these materials in WorldCat will create the need for print-on-demand services. On Sept. 17, the University of Michigan announced that equipment was being installed for a print-on-demand service at its Shapiro Library. The library will print and bind copies of public domain books (pre-1923) from its collections and from collections of the Open Content Alliance and other digital sources. The cost is about $10 per book.

As for OCLC’s agreements with Goo­gle, Jordan says, “We have a number of agreements with Google which allow them, at no cost, to harvest partial rec­ords so that they present a link to a library resource in the results. A user clicks on an item of interest and is rerouted back to WorldCat and rerouted to a library. The user can enter a zip code and be routed to the nearest library.” Jordan emphasized that making WorldCat available for free helps fulfill OCLC’s public purpose.

Looking to the Future

And what does the future hold? Jordan replied, “We are moving along the vectors that are of highest value to participating institutions. It is a simple equation. Fred Kilgour wrote it down forty years ago. He was right then and is still right emphasizing the reduction of the rate-of-rise of unit costs for libraries and expanding access to the world’s information and knowledge.”

Web Harvester and the Digital Ar­chive Service are likely to be two additional services that will become more important in the next few years. Web Harvester is a tool that enables libraries and other institutions to capture and to add web content to their digital collections; the Digital Archive Service provides secure, long-term storage of digital materials and collections for preservation purposes.

Jordan ’s emphasis rests on OCLC’s core mission and service to libraries. He stresses that products and services will continue to be integrated into library workflows so libraries can achieve new efficiencies, effectiveness, and visibility. Efforts will continue to extend and to enhance WorldCat and to invite more libraries around the world to join OCLC, add their holdings to WorldCat, participate in OCLC governance, and build a more valuable global resource that is available to all who have access to the internet.  

OCLC Acquisitions at a Glance

In less than a decade, OCLC has extended its global reach through a series of acquisitions. Here is a look at the latest 15 companies and when each of them was acquired:

Washington Library Network (1999)
Public Affairs Information Service (2000)
PICA (2000)
LTS (2000)
NetLibrary (2002)
Strata Preservation (2002)
V3.Web (2003)
Capcon (2003)
24/7 (2004)
Sisis (2005)
Fretwell-Downing Informatics (2005)
Research Library Group (2006)
DiMeMa (CONTENT dm) (2006)
EZproxy (2008)
Amlib (2008)

OCLC Facts and Figures

Indicator 2006–2007 1998–1999

Participating libraries

60,467

34,775

Total records in WorldCat 86.0 million 39.7 million
Catalog records added to WorldCat 18.7 million 2.2 million
Library locations in WorldCat 1.14 billion 720 million
Online interlibrary loans transacted 9.8 million 8.2 million

 

Financial Indicators ($) 2007 1998

Revenues

234,949,700

136,217,100

Operating expenses 230,293,000 138,059,400
Other income including investments 14,866,900 4,879,800
Excess of revenue over expenses 7,308,400 19,523,600

 


Miriam A. Drake is professor emerita at the Georgia Institute of Technology Library. Her email address is mdrake@bellsouth.net. Send your comments about this article to itletters@infotoday.com.
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