Ask any economist, and you’ll likely hear the same response: as markets mature, consolidation tends to occur. So, while it’s big news, it’s not necessarily surprising to hear today’s announcement that Blackbaud is purchasing Convio. These two publicly traded corporations have been in the non-profit technology space for a long time, and I congratulate their boards on coming to such an important agreement.
Now, let’s get to the real business at hand: what can be done now to ensure technology service prices go down, not up, in an era of mega consolidation? Our answer: a fresh approach with a dose of healthy competition.
I’ve been hanging around our non-profit sector for many years. Heck, I still remember walking into Ed Batista and Holly Ross’s N-TEN office back in 2004, complaining about the lack of open source software support in the sector while Ed drew his famous nptech circles on a piece of scratch paper. I remember going to some of the first events organized by our friends at Aspiration Tech, where the promise of innovative and free (as in “liberty”) technology was the buzz.
Throughout the years, however, it seems to me that prices seem to have remained flat (or worse, gone up). I think our own Tim Forbes summed up how many organizations feel in his recent blog post “We are the 99%: extending the benefits of nonprofit tech beyond the few“. The bells and whistles organizations are presented at conferences are always enticing, but when the price tag comes out, you can hear the air of hope sucked out of a room full of budget-strapped non-profit leaders.
Back in 2004, I expected that as companies like GetActive, Kintera, eTapestry, and others were bought, their purchases would represent a market focus on lowering prices and increasing innovation. Today, I’m not sure that’s what ended up happening.
More importantly, while “mid-market” and “large” organizations might be the targets for NASDAQ traded companies, I see that the vast majority of organizations (most all of them small-to-mid-sized) continue to be under-served. I expected the reverse to happen. I figured that Adam Smith’s invisible hand would enter the scene with dramatic fashion, preferably with a lightening bolt or something awe inspiring, and impressively flex a downward force on prices, opening the doors to small organizations whose passions are missions are equally as important as the top 10% of our sector.
Unfortunately, Adam Smith seems to have been busy trying to deal with other sectors’ woes recently.
As the market behemoths merge, a new era of opportunity opens for nimble companies to dive in and fill the gaps left in the marketplace. With platform-as-a-service offerings growing, new companies no longer need to invest large sums of money into hardware, networking, etc. Additionally, since new players don’t have a legacy client base to migrate from earlier or conflicting products, they’re able to turn more quickly with the changing winds of the market’s needs.
Since 2001, we’ve been focused on delivering effective and affordable website management tools to the non-profit sector. We’ve been able to achieve this by growing in a sustainable manner (a business practice we follow with our fellow certified B Corporations), wholly owned by our company’s leadership (not outside investors) and by contributing to and working closely with open source software communities which enables us to lower costs.
In 2012, we’ll continue in that tradition by extending our services to areas in which organizations are looking for affordable options. We will offer a new product to the non-profit sector that will provide a true choice to small and mid-sized organizations looking for the cornerstones of their fundraising and communications systems. This offering will work together as a cohesive unit, not as separate puzzle pieces that need to be patched together to work properly. By doing so, we aim to give organizations an opportunity to have an integrated, 360-degree view of their community engagement.
Today’s Blackbaud-Convio merger news isn’t the catalyst for our next step for non-profits, but it’s certainly a motivator. It’s a call to action for our sector’s technology providers to continue to pursue more sustainable and affordable solutions, and to promote competition.
I’m excited to be on this journey, and I look forward to fulfilling the goals Grey and I created when we first started PICnet: every organization, no matter its size, should have access to effective and affordable technology that enable them to more efficiently achieve their missions.
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This entry was posted on Tuesday, January 17th, 2012 at 7:50 pm and is filed under nptech, Soapbox Engage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.