Convio and Blackbaud have been bitter rivals in the fund-raising and constituent relationship management software arena, particularly for medium to large size customers, so Tuesday’s announcement that Blackbaud was acquiring Convio came as something of a shock to the non-profit technology world. There’s been a fair amount of commentary and speculation online over the last few days from bloggers, vendors of competing products and consultants who work in this space (see this post on NTEN for a link to some), but I haven’t seen much posted from actual customers so far. As a result I thought I would try to provide a perspective from someone who’s been a customer of both companies, using their flagship products. This isn’t to say that those other perspectives aren’t important – I just want to round them out a bit.
From Blackbaud’s perspective, the acquisition makes a lot of sense: they bring their primary competitor into the fold, gain a better foothold in the cloud and SAAS-based services(on top of their prior acquisitions of eTapestry and Kintera Sphere), supplement their service-offerings (from Convio’s online marketing/email services) and solidify their position as the ‘goto’ vendor for non-profit solutions. For Convio as a company, the benefits don’t seem so clear: the Common Ground/Luminate products have been direct competitors to Blackbaud’s Raiser’s Edge and Enterprise CRM products, capitalizing on the native capabilities of the Force.com platform to deliver added value for customers.
As I’ve posted elsewhere on this blog, when I joined Citizen Schools four years ago, we were solid Blackbaud customers with both their Raiser’s Edge and Financial Edge packages installed. In 2011, we left them completely (or so we thought), by migrating our constituent management and fundraising to Convio’s Luminate CRM package built on top of Salesforce.com and our financial systems to Coda from Unit 4. We’ve been live on Convio for about three months at this point and are generally satisfied with what we’ve got.
Tuesday’s news honestly has me concerned. When choosing a software vendor and product, I’m not just evaluating the current set of functionality against my requirements and budget, but am also looking at the company’s past and potential future. When we decided to leave Blackbaud, it was in part because neither their past nor their future was that compelling: The Raiser’s Edge is built on ten-year old technology, required substantial in-house resources (financial and staff) to host, support and enhance, wasn’t responsive to the changing needs of end-users and wasn’t scalable from a financial perspective. Neither was there a clear roadmap for the future – the promised version 8 of Raiser’s Edge had been talked about since at least 2006 (and still hasn’t materialized) and there seemed little understanding of the importance of mobile and social tools. It seemed that growth through acquisition rather than innovation was the strategy.
Convio seemed the opposite: by building on top of Salesforce.com, the Common Ground/Luminate product has mobile, social and agile as part of it’s DNA and leverages the best-of-breed multi-tenant SAAS architecture to avoid the supportability and maintainability headaches of on-premise software. Yes, they too have a (short) history of acquisitions, but they have also showed a commitment to integration (of their analytic and online marketing tools) that seems to be more of an afterthought for Blackbaud. It’s still an expensive product, but the value that we’d be getting and the future value that I saw coming down the road, combined with our already substantial use of the Salesforce platform made it a choice worth making.
Now though, I question some of that future value. After having spent millions (my guess) developing it’s enterprise CRM product and more millions in acquisitions (including Convio), what incentive does Blackbaud have to invest heavily in the ongoing development of the Common Ground and Luminate platforms, particularly if they cannibalize sales of their other products? Very little, I suspect. Instead, leverage the online marketing and new analytics platforms and integrate with Raiser’s Edge and/or Enterprise CRM. Common Ground and Luminate will likely remain as offerings for customers who want a true cloud solution (which Blackbaud has thus far proven unable to deliver), but I expect little in the way of additional enhancement there, which is ironic, because the capabilities of the Salesforce platform are where real value is going to be added over time (Salesforce touch – access on any device anywhere, Chatter providing context on data and enterprise social collaboration, an open development platform to allow individual organizations to quickly customize to meet their needs, and deeply discounted through Salesforce’s commitment to getting great tools in the hands of non-profits).
So what does it mean? Consolidation happens and we have to roll with it, though we may not like it. This feels like a real opportunity for smaller competitors to jump in. Affinaquest, Sage and CiviCRM as well as other, open-source or custom products all have opportunities here, particularly as Blackbaud digests it’s newest meal. I know that if I were still in my decision-making phase, the decision to go with Convio would not be nearly as clear as it was 9 months ago. I’d be looking for alternatives that can offer not only the basics of fundraising and CRM, which are becoming increasingly commoditized, but that also satisfy the mobile, social and agile imperatives that are increasingly critical to non-profit success, whether it be in technology or achieving the mission.
I’ll be watching carefully to see what comes next.