Predictions are fun, but what happens when they’re reviewed after the fact. Current commentary in Blue.

Blackbaud announces its intentions (subject to regulatory approval) for acquiring Convio. As with other industries, mergers and acquisitions are continually taking place and the non-profit sector is no exception. So what would some of the speculation be for this particular merger and how might it affect us on a day to day basis? What are some of the questions we might want to think about asking our vendors? What alternatives will emerge? What should we be concerned about going forward?

As with most press releases the language is fairly standard, “no forward looking statements”, and the usual disclaimers. The capital markets do not appear to be displeased and Blackbaud’s share prices have remained in the same range as they have been over the last few months. Convio is having to deal with some negative publicity in terms of  legal investigation as is often the case when a company is being acquired. More headlines on Convio. The New York Times also had a brief article.

  • Will there be less choices for fundraising software? Likely not, but it will depend on Blackbaud’s direction in terms of consolidating products. If there are less products, but the functionality is more robust then consolidation of products is a mute point. (There is now less choice as the Common Ground product was dropped.)
  • Will development for some of the existing products slow down or have less focus? Blackbaud continues to move towards hosted/cloud based/software as a service platforms. Stand alone products will likely still be part of their strategy for large enterprise clients but small to medium sized organizations should start planning to move towards hosted solutions over the medium term. (Raiser’s Edge NXT has been announced which is a cloud based approach to Raiser’s Edge. It will likely be a few years before this option is fully available and existing users converted over.)
  • Will pricing or licence costs change? Likely not, but there may be more subscription options for hosted solutions.
  • What will be the direction for some of the existing web based product lines such as Net Community, Kintera and Convio? Will these be amalgamated or left as separate products? Over time it would seem that from a bottom line perspective that the company would want to eliminate redundancy in the support/infrastructure/management areas while still retaining their software development staff and expertise. Consolidation of products makes sense, but it’s often a “difficult row to hoe”. (Little evidence of any consolidation.)
  • Blackbaud will have direct access to a Salesforce application via Convio’s Common Ground. Although Blackbaud already competes with Salesforce, this will now be more “competition from the inside.” Salesforce has a market cap of around $14 Billion. If one were purely speculative, would the acquisition of Blackbaud by Salesforce be something in the deck down the road? If not, is there a possibility that Blackbaud could be acquired by another organization?
  • Blackbaud will have a much greater access overall to a wealth of information on philanthropic trends, 3rd party data sources, data enhancements and other information. Remember the Target Analytics purchase at what seems just a short time ago. Both companies have been good about doing research on philanthropy (it also helps with their marketing) and making the results of the research public as a resource back to the the fundraising community. (This continues.)

The ideas of hosted applications, a data platform strategy (ability to purchase data enhancements such as wealth screening) and subscription based revenue will be a mainstay of all software companies going forward. Blackbaud will be no exception to software development organizations taking advantage of these trends.

Meanwhile, for most of us it’s probably just “business as usual”. (It is.)

However, any product decisions that we need to make going forward will be more complex for the medium term. And I would define medium here as the next 2-3 years. (This is particularly true of organizations that are deemed to be Enterprise clients. Enterprise CRM, Net Community, Convio and Raiser’s Edge NXT are all a variety of choices,  with different levels of functionality. Instead of being easier, the choices are even more challenging.)

If  Blackbaud is one of your vendor choices, you’ll need to consider which product in their product stream fits most of your needs – coupled with the idea of which of the best features in their other products you might like and how they are going to be integrated, utilized and licensed for your current and future needs.

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About
Brian W Dowling has invested more than 25 years working in advancement services, development services, finance and administration and operations for nonprofit organizations.

His management experience includes: technology and information systems, software conversions, gifts and records processing/management, prospect research, document imaging, web sites, online programs, finance, investments, working with senior management teams, strategic planning, boards and committees and other duties that help organizations manage their fundraising, constituent engagement and sustainability.

Brian’s current role of Senior Vice President for Finance and Information Systems at the VGH & UBC Hospital Foundation started in 2008.

Brian worked previously at the University of Michigan and was responsible for managing the technological infrastructure, gift processing and records administration for the Office of University Development. This was in support of a $3.1 billion campaign with annual fundraising revenues of $250-$370 million. The database contained over 1,000,000 entities and over 184,000 gift transactions were processed annually.

Prior to that, Brian worked at The University of Toronto. The University’s $1 billion plus campaign was Canada’s largest and most successful philanthropic effort in higher education. The database of over 700,000 entities supported a large-scale decentralized advancement operation.

Brian also worked at a number of other institutions and businesses in the United States and Canada, where he gained knowledge and perspectives of managing in small, medium and large shops. This experience included multiple system conversions, website development, budgetary and financial responsibilities, operations management and more.

He provides consulting services in Canada, the United States, Asia and Australia, has written many articles, is a published author and speaks at conferences and through webinars. He was a founding board member of the Association of Advancement Services Professionals and a founding committee member of the BC Blackbaud Users Group.
My Organization(s)
SupportingFundraising.Com, SupportingAdvancement.Com, VGH & UBC Hospital Foundation

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