There was surprise and excitement yesterday when it was announced that US nonprofit technology leader Blackbaud will acquire rival software firm Convio. The $300million price tag represents a 49% premium over Convio’s market value, so somebody really wants to make sure the deal goes through!
Few people in the UK have even heard of Convio, which up to now has provided fundraising and CRM solutions in the US and Canada, including 29 out of the top 50 charities. However, last year Convio acquired Baigent Digital, a leading web agency in the UK, and are expected to launch here in the next few months.
So why pay out so much cash to buy out a rival? The simple answer is they had no choice. Blackbaud has not delivered the much vaunted upgrade to its ageing flagship CRM product, The Raiser’s Edge, whereas Convio’s Common Ground, building on the massively successful salesforce.com platform, has become the solution of choice with its modern, cloud-based software oriented to the needs of digital fundraisers and online supporters. So Blackbaud bought Convio before Convio overtook them.
“That’s a shame”, you may say, “Convio never fulfilled its destiny and usurped its rival!” But such is the nature of public companies in the software business. Rumour has it that this wasn’t the first time Blackbaud tried to buy Convio. When faced with an offer they can’t really refuse, boards of directors sooner or later recommend shareholders to sell.
So, what does all this mean? Less choice, perhaps? At the top end of the market there is keen competition for the biggest international clients, and it will be interesting to see how Convio’s new Lumimate system shapes up against Blackbaud’s EnterpriseCRM.
But what about the quiet majority – charities working hard to build positive and beneficial relationships with their supporters? Having supported Blackbaud technologies and clients for many years, at Purple Vision we think this deal could be a good thing, and here is why: Readers of this blog may remember a few weeks ago we reported Blackbaud Marketing VP Jana Eggers explaining on YouTube how the company had abandoned development of RE8, and instead described the company’s various other tools in a kind of mix-and-match solution. That was a sad day for Blackbaud; both the company and its many thousands of customers deserved a lot better. But now the solution that they need may be coming their way after all. Convio’s Common Ground has been described as “Raiser’s Edge in the Cloud”. If this turns out to be true, it could be a tremendous kick-start for digital fundraising, and a great opportunity for fundraisers everywhere.
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