It’s been a while since Blackbaud announced the replacement for Raiser’s Edge, known as Raiser’s Edge NXT. Now that the dust has settled, or should we stay still settling there’s a little more information out there on what an organization should do in regards to this new release.

Here’s a synapsis of what seems to be the populist dialog:

  • NXT is fairly early on in development.
  • It seems obvious that Blackbaud would like to transition customers into the hosted environment and into subscriptions for the new product. Most software vendors are moving into this model. The model allows Blackbaud to strictly control release cycles, incrementally stage out it’s hosting environment and over time, provide more cost effective support and management structures for its clients.
  • Pricing and licensing will change. The pricing will likely evolve over time as a menu of services and add ons evolves. For example, will there be additional licensing fees for the Events Modules and other modules that Raiser’s Edge customers need to purchase?
  • NXT will have a web based front end although not 100% at the beginning. They will be developing the front end in stages, the first one will be the fundraiser view and other views will follow. In the meantime, clients will be using the current interface for such tasks as Raiser’s Edge administration.
  • The development of the additional web views and the eventual sunset of the current Raiser’s Edge interface will likely take a number of years before being complete.
  • It does not appear that Blackbaud is radically altering the underlying Raiser’s Edge database structures or making changes to them as part of this early implementation such as adding last modified or last changed dates to the attributes table at this stage. It appears that the change is more around the lines of providing a better front end rather than a better underlying database design. However, they have made a few very welcome changes to the phone and address table.
  • The ratings area has been re-designed.
  • The hosted environment currently doesn’t support any kind of data warehouse or separate reporting environment. It’s not clear what Blackbaud’s direction will be on this front yet and the idea of privatized clouds where this would be feasible doesn’t appear to be part of their current design strategy.
  • Currently, 3rd party hosting services such as Beyond Nines won’t be able to sell Blackbaud NXT. Similarly, you won’t be able to run NXT on premise. So if you’re not hosted or are hosting somewhere else, this may limit you particularly if you’re in an on premise environment where you have high performance – which quite frankly is sometimes more difficult to replicate in a hosted environment.
  • There is currently no API but apparently it is under development. There is no pricing currently available but it could be assumed that once this is complete, there will be connectivity to a number of 3rd party apps such as Omatic products or your own customizations.

There are likely many additional facts, suppositions and other elements that will play into this product over time. Blackbaud has a number of adopters already. For an organization that is already hosted with Blackbaud, this is a much easier decision since you’ll already be constrained to what the hosted environment already offers and NXT is obviously an up-tick over what you already have.

So what’s you decision going to be?

If you have a sophisticated reporting environment such as a data warehouse, you’ll need to wait until Blackbaud’s strategy becomes more clear and then decide where to go from there. You may need to consider other product offerings if the NXT environment won’t work for you. There’s ECRM and apparently ECRM with a different feature set as a web service offering. Both of these will likely be more expensive than NXT but will more closely align with the needs of enterprise and large scale customers who can afford the flexibility.

The choice of any one of these three systems is particularly difficult for organizations that are between small scale and large scale. One product is very expensive and mostly ready, one is similarly priced and not ready and one is brand new and at a different price point. All three are at various levels of risk – and return.

Blackbaud has quite frankly a herculean task ahead of them to migrate all of their clients over to this new environment and it appears that this will be one of the key directions for the company going forward.

However, the question would still be out in terms of company focus and the balance between committing R&D resources to NXT vs other activities such as acquisitions of new products and how new and existing products will form the menu of offerings for all customers.

The corporate behaviour over the last number of years has appeared to be to acquire and then enhance products incrementally rather than wholesale change. eTapestry, Convio, Kintera are all examples. Customers always want change to happen more quickly but don’t want to pay more to make this happen. All-in-all a balancing act for Blackbaud that continues with each new acquisition.

Will the company move more or less towards acquisitions as a portfolio strategy vs. an integration strategy? With the Convio acquisition, (now Blackbaud Luminate) we still have a Net Community offering. Similar products, will there be more of a concerted effort by Blackbaud to integrate into one product?

Raiser’s Edge represents a significant revenue stream for Blackbaud and additionally a significant contributor to the bottom line. How much will they invest to move the NXT product quickly vs. maintaining their current margins and income for shareholders? This is an interesting question and will tie into the new CEO Michael Gianoni’s management of Blackbaud.

Blackbaud is a public company are are subject to a Board that will have a very important role in determining how much short or medium term profit, if any, they will be willing to sacrifice to move existing customers over. I personally would think that in incremental approach would be preferred by the company. Blackbaud doesn’t have excess margins or income compared to other software companies so they will need to continue to operate in a way that maintains margins that are within industry parameters.

The world in general is moving towards hosted systems. There are a lot of  conversations about Salesforce for example on various listservs and what organizations are doing there. The march of time is inevitable – you will be working with software that is cloud based, you will be paying a subscription for these services, you will need to determine when the move is right for you.

Competition plays into software development. Blackbaud is one of the the 800 lb. gorillas in the fundraising software market and on the surface it would appear that more competition with them (aka Salesforce prodding and poking), might expedite increased investment in existing products. The jury will likely be out on this for a while.

As with any decision, make sure you do the right amount of investigation and due diligence.

This is essential with any cloud based service. How many add-ons will you need? Does that batch processing work well for gifts? What are your total licensing costs going to be? How will you manage your reporting? It’s not easy to change systems once you make a commitment and like any other cloud based system, how easy will it be to get all of your data once you’ve moved into a particular system if you want to make a change?

We’ve varied a little from the title of this post at this point, but as with any choice – it depends.