In a year where the general economy presented enormous challenges, libraries continued to make investments in automation, especially in products that help improve what and how they deliver to their end users. Access to electronic content remains a key driver. In response to anticipated needs for new approaches to library automation, many companies have invested to expand their development capacities. Trends this year include the sharply increased growth of Software as a Service (SaaS), as well as the release of application programming interfaces (APIs) and data access models by proprietary software vendors. The library automation economy involves large portions of revenues from annual maintenance; even though libraries may enjoy an overall savings through an SaaS arrangement, it positively affects company revenues, given that the annual price of the SaaS subscription exceeds maintenance fees. The automation companies continue to draw more international business, and library expenditures on discovery and other add-on products have increased. These factors underlie the evolution of the library automation economy as it becomes somewhat less dependent on traditional integrated library system (ILS) procurements. It is estimated that the overall library automation economy remained about even with the $570 million total given last year. The overall number of ILS contracts signed for the group of companies serving academic and public libraries remained steady, though far below the peak seen in 2004. The number signed to new-name customers in 2008 dipped from 2007. Many involved smaller single-library accounts. This article reports that despite an incredibly difficult economy, companies that offer libraries software and services have found it necessary to invest in long-term prospects, expanding development and support capacity as needed. In a period when libraries face heightened user expectations, now is not the time for them to leverage technology to improve their standing when this can be achieved for reasonable costs. The industry continues to be healthy, as demonstrated by new private equity and venture capital investments. In 2008, the library automation system marketplace delivered remarkable performance in a year when other industries experienced catastrophic results. The economic climate of 2009 will likely present even more dramatic constraints, amplifying the distinctions between companies with solid business plans versus those on weaker footing. This article includes company profiles. (Contains 3 tables.)