Blackbaud, which is one of the big gorillas in the CRM/Fundraising space bought a littler guy, eTapestry. This is not so far on the heels of the acquisition of Get Active by Convio. Blackbaud has done other acquisitions in the past. And, I’m sure there are more to come.
There basically are three types of software acquisitions that companies make. The first is to acquire a company that does something that you do not. For example, Yahoo bought del.icio.us – it didn’t have social bookmarking. In those situations, generally, the product remains largely the same (with some branding changes over time.) The second kind of acquisition is to acquire a company that does something you do, but much better. Like Google buying YouTube, or Yahoo buying flickr. In that case, the acquiring company eventually does away with its own product, and the acquired product becomes that companies offering in that space (with changes.) The third type of acquisition is when a company buys a competitor, which may or may not have technologies that it has. In that situation, the acquired company is basically engulfed by the acquiring company, and eventually (or immediately, in some cases) completely disappears as an option. This third type of acquisition has been the hallmark of the acquisitions in the CRM/Fundraising space. GetActive is no longer an option to choose from. Nor is Giftmaker (bought by Blackbaud.) True, eTapestry had a platform that Blackbaud does not – but don’t mistake that as the first or second type. eTapestry as a separate choice is bound to go away. And this is a bad thing for the many small organizations that have been using eTapestry for reasonable prices (or free).
You have heard me rant and rail about the fact that the vast majority of money (both from nonprofits themselves, as well as by investors) goes into developing, maintaining (and acquiring) CRM/Fundraising software. This is something that, honestly, we as a sector are complicit in. And there are fewer and fewer choices every single day. Fewer choices means less competition, which means that prices will likely rise. And nonprofits often feel they have no choice but to pay big bucks for fundraising/CRM packages.
If nonprofits want to have a good fundraising platform that they can know won’t be bought and swallowed and changed so that they’ll have to shell out more, it’s time to invest money and effort in an open source platform. One already exists that needs support and development to make it ready to compete with the big guys. Allan Benamer says:
Obviously, Blackbaud is taking a page out of Oracle’s playbook and applying it to themselves. Rapidfire acquisition of smaller players so that you can wrap it up into a system of systems seems to be their strategy for now. They now control the vertical fundraising environment for nonprofits from the base of the nonprofit market (eTapestry) to its apex (Target Software).
Blackbaud is publicly traded. It is important to think about the fact that dollars raised by nonprofit organizations are going to Blackbaud’s investors whose major interest in Blackbaud is the profit it can produce. That is the driving force behind what Blackbaud is doing – maximizing profit. It is unrealistic to expect that acquisition mania in the CRM/Fundraising space is going to result in anything except fewer, more expensive choices. (Remember that as good and open and free as Salesforce is, it also can be acquired, and nothing is guaranteed.)
We don’t have to submit to the “Buyout Blues”! We have power and options in using open source solutions. Isn’t it time we began to realize the power of community-owned and driven software that no one can buy?
