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.
And the same holds for email, donation and constituent engagement platforms. Plenty of alternatives like Stay Classy, CauseVox, and Constant Contact.
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.
Roger
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.
This article was posted in: database marketing, Don't Miss these Posts, fundraising, higher ed marketing, nonprofit management, nonprofits, online fundraising.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
This is a great perspective, and really helpful information about the alternatives out there (especially for smaller nonprofits). Thanks so much!
Can the leopard change its spots? I’ve been an NFP software watcher for over twenty years. During that time Blackbaud has, in my territory of the UK, consistently moved in on promising fundraising software competitors and bought them out, closed them down and replaced their products, often excellent products, with their own, and this despite promises to the contrary. The reduction in software diversity is not welcomed. It is part of a common issue with Blackbaud in the UK: ‘We quite like the software (Raiser’s Edge), but hate the company’.
Back then, as now, there have been many alternatives to the big software vendors. When the world was young, my best beloved, there was shareware for the smaller NFPs and then the great promise of open source (a great white elephant that failed) and now there are the successors to them at the low end of the market.
These alternative solutions cannot, in general, sustain the larger and more sophisticated NFP organisation’s fundraising and marketing. They suffer with the same malaise as of old: insufficient capital for development, a market that cannot or will not pay a fair price, and excesses of zeal but a dearth of business skills.
Against this twenty year view there are the puzzling questions about Blackbaud’s failure to innovate. For example, they’ve conspicuously stumbled with analytical cubes (The Information Edge) but bought Target Analytics whose tools were breathtaking, but I see no best-of-breed analysis tool in the Blackbaud product rangenow; so where is the common growth here? I don’t see it.
So I don’t share Roger’s optimism. Kipling’s story of the leopard and his spots was one of the ‘Just So’ stories. It is just so with Blackbaud, believe me.
Well done story and opinion by our friends at The Agitator! Although I believe the real essence will be in the comments made by others, especially customers. Ultimately it is the customer who like in HBO’s Game of Thrones votes thumbs up or down. http://www.youtube.com/watch?v=PW6wfXPeJTw&feature=related
I was the VP of Development for four years at an organization that used Blackbaud’s Raiser’s Edge and Net Community (for online donations and events) and while customer support for RE was consistent and responsive the support for our online product was horrible. They kept trying to push us to switch to their new product which I think was called Sphere, which by all accounts was horrible and they didn’t seem to care about the issues we were having. I can’t imagine them handling the take over of Convio and the customer service and attention that additional clients will need along with their “old” customers. Thanksfully, as you pointed out, there are alternatives out there if organizations get fed up. Unfortunately, when you are running events year-round and RE is your donation database of record it is very hard to swtich to other online software that doesn’t interact well with the main database. All of these businesses promise that you can download data from an online product to your main database, but it never works well or is as easy as they claim unless you are willing to create a new IT position to facilitate the process. I feel sorry for all of the current Convio, Kintera, Net Community and Sphere users out there. You have my condolences.