So it looks like I’ll be having less of a hard time covering the nonprofit fundraising application suites. I was wondering about Blackbaud’s recent loan that it took out — now we know why. UPDATE: They can borrow up to $75 million. That should leave about another $50 million in the balance. I wonder where that money is going to go.
From BusinessWire:
Blackbaud, Inc. (NASDAQ: BLKB - News), the leading provider of software and related services designed specifically for nonprofit organizations, announced today that it has acquired privately-owned eTapestry, based in Indianapolis, Indiana. Under the terms of the agreement, Blackbaud paid an aggregate purchase price of approximately $24.8 million, plus an additional amount of up to $1.5 million under a two-year stock-based performance incentive arrangement. Blackbaud financed the deal through a combination of cash and borrowings from its credit facility.
I know I don’t cover the smaller nonprofit fundraising suites and there’s a reason why. Nobody gets excited about them. There are no eTapestry user groups or eTapestry blogs — well there will be at least a user group now over at blackbus.org.
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). This should put them in good position to compete against the Sages, Microsofts and salesforces of the world. It’s an impressive move and a smart one. The walled garden just got bigger for Blackbaud customers. Anybody have any comments?
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So I used to sell in the low-end space - and I find it hard to believe that eTapestry is worth that much money. My impression was they had more free accounts than paying accounts.
Unless they have developed some source code BB wants, why pay that much money just to acquire a customer list of low-revenue nonprofits that can’t afford RE?
Things that make you go HMMMMMMM>
Hmmm… indeed. I’m thinking Blackbaud doesn’t want to lose revenue competing against the little guys in the space that RE can’t occupy. If they create an RE lite by using eTap’s code and their existing user base, they can finally go up against the little guys. This way they don’t get eaten up by lower-cost competitors with more nimble software and keep the pipeline open for future RE sales.
According to sources, they will remain seperate and eTap customers aren’t going anywhere and they aren’t pulling a gift maker pro on them
Love the way the 4th Founder is no longer mentioned by eTap…
http://scott.ganyo.com/2007/08/07/etapestry-1999-2007.html
Regarding the reasoning for purchasing eTap, I believe from some people I’ve spoken to that eTap will remain seperate for another year. The real reason for the purchase was to have a customer base ready to force over to the new Infinity product that RE is building so they can claim fast adoption. Clever approach.
Clever but not exactly customer-friendly. I hope this isn’t the case. BTW, eTap’s Java source code probably won’t play well with Blackbaud unless they communicate via Web Services. Is it going to be entirely junked as a process of the move to Infinity?
So what’s the update? Did BB keep eTapestry’s Open API or is that gonzo?
Nobody knows — there hasn’t been a peep from Blackbaud regarding that API. You can take a look at Blackbaud Labs:
http://labs.blackbaud.com/default.aspx
As you can see, nothing about eTapestry’s open API. It’s as if it’s been devoured never to return again. Hehe. I’ll ask Blackbaud’s press people and see if they have any comments.