The fact that Intuit sold its Fundware not-for-profit accounting package at a fire sale price was less important than the fact it illustrated--that the NFP market has shifted dramatically over the last three years.
The basic facts are that Intuit sold Intuit Public Sector Solutions, the unit that marketed Fundware, for $11 million in cash, after having acquired the product in the spring of 2002 for $23 million in stock and $4 million in cash. It was not exactly a successful endeavor for Intuit.
But what's more important is that the sale brought Kintera, a new player, into the market. Kintera, which went public in December, has made a series of acquisitions to help it develop its Internet-based systems for the market.
The other new kid in the pool is a little better known--Microsoft Business Solutions, which in the last year has introduced a series of modules for its Great Plains line to make it a better fit for NFPs. Some Great Plains and Solomon resellers had always done well by fitting those general ledger packages to the NFP market. But the new Great Plains modules--Commitment Management, Encumbrance Management, Fund Management, Grant Management, and Fundraising--bring MBS squarely into the NFP market. Don't forget the fact that MBS also is in the middle of a $2 million campaign aimed at bringing in 348 new Great Plains NFP customers during its current fiscal year, and the landscape is definitely changing.
It had already been changed by Best Software, which acquired Micro Information Products, a head-on competitor to Fundware--in 2001. Then followed by adding on the KTS Group and JSI Fundraising Systems, both in the fundraising market.
Add on the QuickBooks Nonprofit editions and Blackbaud's having gone public this year, and you have a market where the players are bigger and have much broader products lines than they did in 2001.
And that's actually a pretty simple story, in that it's increasingly tougher for NFP vendors to go to market with a limited product line as it is in other segments of the accounting market. The survivors are also better armed. These companies, if not all large, at least all have access to the public capital markets.
We're not telling any great secrets here. It's just that things are likely to change even more rapidly in this market as companies with more products and more cash battle it out.
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