Any Color You Want … As Long As It’s Black
Twitterland, the nonprofit newswires, and my email lit up early Tuesday morning with news that Blackbaud, the largest provider of fundraising software to nonprofit organizations, had announced its plans to acquire Convio, one of its largest competitors, for $275 million. The deal is expected to close by the end of March.
The purchase of Convio is the most recent acquisition Blackbaud has made to expand and solidify its position at the top of the nonprofit software and CRM market. It is also its largest acquisition to date. Previous deals, such as Blackbaud’s 2007 purchase of Target Analytics for $60 million and its 2008 purchase of Kintera for $46 million, were significantly smaller.
A similar pattern of acquisition – and market concern about the acquisition – emerged last year in the higher education space when Datatel, a company that provides software and online management services to colleges and universities acquired SunGard, its major competitor.
The most consistent expression of concern among Tweets and emails I reviewed is the fear that when a single company controls so much software and online applications, the nonprofit is at the company’s mercy in terms of new features, bug fixes, service and price.
Historically, there’s some basis for concern. Consolidation within a market indeed often decreases innovation and increases price. And in the world of online fundraising, in a few short years we’ve gone from Kintera/Convio/Blackbaud, then to Convio/Blackbaud and yesterday to just Blackbaud.
In higher ed, the SunGard/Datatel merger impacts the entire institution, because it’s not just about fundraising, it’s also about managing the operation of the universities and colleges themselves. Right now their customers are wondering, is it going to be Datatel’s campus management and SunGard’s fundraising systems … or what? Similarly, Convio and Blackbaud customers are wondering if it’s going to be Raiser’s Edge, eCRM, Common Ground, Luminate … or what?
Stop worrying. Why? Because thanks to technology and the cloud there is a fast growing number of alternatives.
Even assuming that Blackbaud or Datatel behave like Big Bad Monopolists – an assumption I’m not even remotely willing to make – the fact is that there are more and more enterprises focused on effectively meeting nonprofit needs.
In fact, we are beginning to enjoy the benefits of an app economy where we are free to choose best of breed, instead of best of vendor, solutions. Beyond the magic of Apple’s App Store you need only do a cursory search in the Salesforce’s AppExchange to see the hundreds of nonprofit apps available … many free or nearly so.
Between today and the App Economy of tomorrow there are also plenty of alternatives available right now! Take for example online CRMs and donor database systems. Viable alternatives now range from the inexpensive online donor management systems like DonorTools ($30 a month), to the highly sophisticated new cloud-based system Affinaquest ($99 per month for up to 10 users) designed and built by Jeff Shy, the creator of Sage Millenium.
You can quickly get an idea of all the alternatives available to you and your organization by downloading the free report on donor databases prepared by nTEN, the Nonprofit Technology Network.
My first point in all this is that I don’t believe for a second there’s anything sinister or particularly foreboding about the acquisition of Convio by Blackbaud. Both companies have done much for our world, and both companies fully realize in the new cloud-based, app-driven world of tomorrow their very survival is at stake. Time to man the oars and move into the future together. Smart thinking as far as I’m concerned.
My second point is that given the wealth of existing and emerging alternatives, you have nothing to fear from the consolidation of major fundraising vendors except fear of change or the inertia that blocks exploration of the many alternatives.
P.S. Here is a link to yesterday’s video of Marc Chardon, Blackbaud’s CEO, explaining the acquisition and why he believes it will help customers.
P.P.S. For all the evangelists at Blackbaud and Convio, but especially for Vinay Bhagat, Convio’s Founder and Chief Strategy Officer, my thanks for the ground you’ve broken.
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