This has been a listening year for me. Your candor, insights and energy are genuinely appreciated.
Our members care deeply about OCLC and the passion comes through in every conversation. You will see many of the ideas you shared highlighted in this, our first digital annual report, which is organized around the “explore, share, magnify” theme that has resonated during my listening tour.
Explored the trends that shape our future. Insight and evidence help us all plan with confidence. Our research this year has expanded our understanding and informed our actions in areas such as online learning and libraries, shared print, engagement with digital users and linked data.
Shared data, work and resources. Our history and our future are built on sharing. We are more than 16,800 members strong, spanning libraries of all types around the world. We are delivering new workflows by migrating more than 9,000 member libraries to a cloud infrastructure for resource sharing, by moving library management to the cloud, and by our continuing investments to expand the formats and collections represented in WorldCat.
Magnified the impact of libraries. Through partnerships that link library collections to Web services, search engines and social networks, we are connecting more libraries to more users in new ways. And through partnerships with foundations, government agencies, associations and corporate philanthropy, we helped more libraries deliver programs in health, education and jobs to their communities.
Even with our rich history, standing still is not an option. Technological change is accelerating. Education and learning are being reshaped in a networked environment. Civic and cultural engagement is evolving. We need to innovate and to invest in the future we share with member libraries.
OCLC has made major investments in cloud infrastructure and in new products and services over the last few years. This underlines a crucial difference between OCLC and other agencies in our field. We do not fund our development through venture capital, which exchanges investment for an ownership stake and influence over our direction. Nor do we fund product development through grants or other direct public funding.
We fund all of our development work through our own operations. It is vital that we are run in a sustainable and responsible way. This is a prime responsibility to our members, and a responsibility I take very seriously.
We have no other purpose than to serve library interests.
Our mission requires us to be financially secure so that we can invest in the activities and services that make the cooperative a valued part of your future, and so that we can continue to act in your interest.
As a nonprofit cooperative, we operate on a cost-sharing philosophy with a business-like orientation. This means that we strive to achieve an operating income, over time, that is 24% over our operating expenses. The level of our investment over the past few years, along with holding price increases flat or at moderate levels, has meant that we have fallen short of this goal. In fact, we have seen negative returns from our operations the last five years. We would all agree that this is not sustainable. Fortunately, a strong global investment market over the last few years has provided the cooperative with capital to invest for our future. As more of our services move to new cloud models, we anticipate that our funding from current and new services will create the required operating funds. The Financials section of this report provides additional details.
On my listening tour, it became clear to me that not all members understand our funding model or the related governance structure. I am committed to making this clearer and well-understood.
Speed, accountability and execution will underlie all aspects of our work together.
We will continue to place a high level of attention on investments in infrastructure, customer services, product development and community and research activities this year. And we are already exploring new and improved ways to ensure that our communication and structure make it easier for you to engage with our staff, provide feedback on services and plan for your future.
Finally, I would like to say thank you to all who have welcomed me during my first year as President and CEO. I have heard what we are doing well and where we need to improve. My goal is to serve you, our members, and our public purpose from our unique position in the library ecosystem. Your input is vitally important to me and it will translate into action as we work with libraries to explore, share and magnify their work.
OCLC President and Chief Executive Officer