Talkin' Blackbaud Blues

Fen Labalme Profile Photo from DCSF
Fen Labalme

on

January 20, 2012

Talkin' Blackbaud Blues

As mentioned in the previous post, the recently announced Blackbaud acquisition of Convio - two giants in the closed-source world that provide web services primarily for non-profits - caused a stir not only in the non-profit world but also in the Free and Open Source software world.  Allen Gunn of AspirationTech considered the merger a bad thing for non-profits (as I do) but a response to his post by Jeff Shuck that considered the acquisition a good thing got me riled to respond to some of his points which are in italics, below.  (This is a repost of my comments originally posted on the AspirationTech blog.)

Free by openprivacy, on Flickr

Consolidation. I disagree consolidation is necessarily a bad thing.

When the consolidation results in fewer choices and stronger lock-in to the non-profit client, then it can be a bad thing, indeed. In my experience helping several clients move from Blackbaud/Convio/Kintera to an open source solution (Drupal and CiviCRM) I have learned that the two main reasons for leaving the closed-source solution were 1) high cost and 2) lack of flexibility. Unfortunately, I know of several other potential clients that would also love to make the jump to open source, but have not because it’s not a cheap, off-the-shelf migration. They don’t call it ‘lock-in’ for nothing.

Scale. … The greater the customer base, the more useful the tool…

This is exactly why more non-profits should help fund free and open source solutions like Drupal, Joomla and CiviCRM because the dollars will go not only to help them but also to help others in the activist ecosystem.

Profit. You lost me here.

Not me! I totally agree that I’d like to see more non-profit dollars go to the activism they are promoting and not to closed systems that exist primarily to make money and only secondarily (if that!) to help the causes of their clients.

I’d argue that Blackbaud has grown large not through usury or manipulation, but because they’ve made a product that nonprofits have wanted and purchased.

It helps that Blackbaud has a marketing budget that dwarfs the entire operating budget of such orgs as CiviCRM. When a new non-profit starts out looking for a web-based constituent/donation management system, it’s likely they don’t even know about orgs like CiviCRM. And with CiviCRM they then also have to find a development team to build what they need. Blackbaud and their ilk will give it all to them with low startup costs. Then as the org grows, they will get charged more and more for new features (or told that such features can’t be had). This is how lock-in happens.

There are COUNTLESS low and no-cost alternatives

Yes, and that is part of the problem. When you’re a struggling startup or non-profit organization, it takes a lot of guts to choose a particular team to be in charge of your on-line architecture. There was an old saying back in the day that you never got fired for choosing IBM. Then IBM became Microsoft. For non-profits, it’s Blackbaud. It’s a difficult cycle to break, but break it we must, as the more dollars that get litterally thrown away to support these megacorps could instead be used to 1) support free and open source solutions and 2) support the very goals of each non-profit.

I am very sure that it will be extremely good news for the many like you who are trying to advocate for alternatives!

I’d love it if this were as true as it should be, but as mentioned above, Blackbaud’s ginormous marketing budget will more than compensate for the few like Allen and myself that will try to raise awareness among the non-profits that we serve.

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I think non-profits should seriously consider the benefits of preferring, whenever possible, to hire non-profit organizations when they outsource.  That strengthens the overall non-profit ecosystem.  Also, many non-profits are in the business of fostering freedom.  Supporting open source software reinforces that. 
Normally don't chime in on discussions but can’t resist offering a different perspective.As someone who has helped large and small, geographically dispersed nonprofits, I wholeheartedly disagree with your statement that the money spent with Blackbaud and for-profit institutions is 'thrown away'.I have implemented and used both closed-source systems provided by FOR-profit corporations and open source systems. The relationships between these entities is actually a pretty healthy ecosystem -- one that serves the needs of the marketplace.Blackbaud and other corporations use their revenues to hire the most knowledgeable experts in the world to build a vastly superior system. True, investors also get paid for putting their capital at risk --- BUT ONLY when the companies EXCEED the original expectations.Nonprofits across the globe pay top dollar for these closed source systems because the products deliver world-class value. The nonprofits who fully utilize the systems raise more money for their cause and serve their mission on a larger, more efficient scale.These nonprofits use some of this money to demand innovations that help them continue to grow and serve their mission. They GET the innovations from their vendors because they PAY for it. Their vendors can deliver the value faster and better than open source systems because they hire the most knowledgeable experts in the world to build a vastly superior system. It’s a pretty healthy cycle so far.A serendipitous byproduct of this success is an open source community that serves nonprofits who don't have the maturity or funds to adopt the innovations FIRST. They get the benefits of innovations in a less sophisticated and rapid fashion. And, they pay much less. Open source is NEVER truly free either. There is a 'cost of ownership' for these open source systems that must be factored in. Educating employees, downtime, lost opportunities all factor into that cost of ownership.Open source systems exist because they can focus on the open-system part of the solution, rather than building the most superior product. They don’t need to spend as much money on R&D because they are implementing processes that already exist. EG. Much less is spent on figuring out how to manage membership transactions because the best practices already exist.Both corporations and open source systems are necessary and good for the marketplace. The successes you complain about today breeds innovation that will later be available for free through the open source community next year. And, the open source community forces corporations to constantly innovate faster and provide a better solution or be put out of business.   Yes, I firmly believe that the open source systems are inferior.  If they provided a better, more reliable product and had a lower total cost of ownership, the 'lock-in' would not exist.So,, after a bit of rambling… The money in the system is NECESSARY for this constant innovation. It is not thrown away. It is spent to pay the smartest nonprofit professionals in the world to invent solutions that help nonprofits serve their missions more effectively and on a larger scale -- TODAY rather than next year.
"Blackbaud and other corporations use their revenues to hire the most knowledgeable experts in the world to build a vastly superior system" Clearly you have not actually used Blackbaud extensively nor looked under the hood at how it manages things. Blackbaud is a nightmare. It's like some massive, clunky VB app. "Open source systems exist because they can focus on the open-system part of the solution, rather than building the most superior product" umm, actually that's what the open source thing is all about. It's about unbridled innovation that's not dependent on profit. "If they provided a better, more reliable product and had a lower total cost of ownership, the 'lock-in' would not exist" Come again? Have you worked on developing an actual open source project? Open source solutions are not trying to "beat" others and make a profit; rather, they are looking to make solid, innovative products that work. Your assertion that all innovation can only come from money hungry corporations is completely not true. For-profits only innovate if there's enough money in it. Open source actually innovate so as to make things better.
@tsinn hits the nail on the head (thanks for your comment).  Large, moneyed corps can survive for a long time with an inferior product simply because they have a significant advertising and marketing department.  Inferior products in the open source world disappear quickly, or, if they have a core usefulness, are patched and updated by a large community of developers working to create the better widget.  It's no wonder that Google runs on open source GNU/Linux, nor that Microsoft's chief security officer was known to prefer Firefox.  Hey, whitehouse.gov runs on Drupal and the Pentagon is making a huge push towards free and open source software.  Blackbaud will continue to entrap new customers faster than you can say 'lock-in' but that certainly doesn't make it the best.
MT - thank you for your well stated perspective.  But as you may expect, I hold a different point of view.I wholeheartedly disagree with your statement that the money spent with Blackbaud and for-profit institutions is 'thrown away'.You are correct that that was hyperbole on my part, as the non-profits that make use of Blackbaud's services certainly get something back for their money.  If they didn't, Blackbaud would not be in business, and certainly wouldn't be the biggest player in this field.  And while I believe the same money would be better spent on engaging with free software solutions, sometimes the initial up-front cost of such an engagement may be more than a small nonprofit can afford.Blackbaud and other corporations use their revenues to hire the most knowledgeable experts in the world to build a vastly superior system.There is no question that being able to offer top dollar salaries and benefits will attract many of the best and the brightest, but not all.  I have worked at some highly regarded Fortune 100 for-profit companies and now, after six years in the non-profit arena I have found the level of talent to be about the same though the salaries are often less in the latter.  Why would someone accept a position at half their potential salary to work for non-profits and the open source systems that support them?  I can only give you my answer: I enjoy helping make the world a better place and believe that the world benefits more when my contributions are available to all - not only to those who can afford them.  And I don't need more stuff - I have enough to support my family, pay my mortgage, enjoy vacations and send my kid to one of the best schools in the country.Nonprofits across the globe pay top dollar for these closed source systems because the products deliver world-class value.Drupal (used by e.g., whitehouse.gov) and CiviCRM (used by e.g., amnesty.org) also provide world class value.  GNU/Linux and free software powers most of the Internet.  I don't think you can make the argument that closed source is necessarily better.  Indeed, there are strong arguments to the contrary.The nonprofits who fully utilize the systems raise more money for their cause and serve their mission on a larger, more efficient scale....whether the systems are closed or open source.These nonprofits use some of this money to demand innovations that help them continue to grow and serve their mission. They GET the innovations from their vendors because they PAY for it.When nonprofits pay for innovations in the open source world, they get them (and in my experience, sooner).Their vendors can deliver the value faster and better than open source systems because they hire the most knowledgeable experts in the world to build a vastly superior system.When an organization chooses Blackbaud, they get technical and marketing support.  But they also get a huge company that may not have the ability to provide personalized service when new features are requested.  Rather, Blackbaud will listen for similar requests from a majority of their users and may at some point announce a new feature that provides the requested capability.  But 1) this is not guaranteed at any price and 2) many of the less requested features will never get implemented.When an organization chooses CivicActions (or our similarly ranked competitors) they also get world-class expertise.  And when they want a new feature there are several possible outcomes: 1) someone else in the open source world has already addressed the issue and contributed the needed code/expertise to the community; 2) the contractor sees an opportunity to contribute new functionality to the community by abstracting the request into a general purpose module, perhaps with a small special purpose adapter to fit the client's specific needs; 3) the entire feature is created as a special-purpose unit for the client (though beware the dangers of custom code); or 4) the client cannot afford the development time needed to create the module and decides to go without.  In three of these four cases, the client got what they wanted in a much more timely fashion than what Blackbaud could provide, and this is one of the main reasons I've heard of for leaving closed source solutions and moving to open source.A serendipitous byproduct of this success is an open source community that serves nonprofits who don't have the maturity or funds to adopt the innovations FIRST. They get the benefits of innovations in a less sophisticated and rapid fashion.  And, they pay much less.I would not call the Whitehouse or Amnesty immature organizations that chose free and open source software because it's cheaper or because they are unable to adopt innovations.  Instead, they scanned the marketplace and available products and made their decision.  As a recent example, the New York State Senate carefully reviewed many closed and open source solutions, finally choosing Drupal and CiviCRM to manage millions of constituents for 62 New York State Senate offices.Open source is NEVER truly free either. There is a 'cost of ownership' for these open source systems that must be factored in.True.  While I've built complete sites for local political groups using Drupal Gardens (no hosting charges, either) at the cost of a few donated hours of my time, I've also worked on open source projects for which the client paid upwards of half a million dollars (and for which many new innovations were created and contributed back to the community).Educating employees, downtime, lost opportunities all factor into that cost of ownership.Again, this is the case for all systems, whether open or closed.Open source systems exist because they can focus on the open-system part of the solution, rather than building the most superior product. They don’t need to spend as much money on R&D because they are implementing processes that already exist.Up to this point, while I've disagreed with you, I've also seen some reasonableness in your arguments.  But this paragraph is IMO far off the mark.  There are many open source systems that are decidedly superior, such as GNU/Linux for servers, Apache for web hosting, and (of course) Drupal and CiviCRM for some applications.  The primary reason these orgs don't do a lot of pure R&D is simply because they don't have the money, but I suspect e.g., Blackbaud does little pure R&D, too.  Rather (as with open source solution providers) they work on providing features that the majority of their clients need and can pay for.Both corporations and open source systems are necessary and good for the marketplace. The successes you complain about today breeds innovation that will later be available for free through the open source community next year.Much innovation comes first to the free and open source community and only later is adopted by corporations.  Mozilla Firefox and Thunderbird are two good examples that have led the way and only now is Internet Explorer starting to catch up.And, the open source community forces corporations to constantly innovate faster and provide a better solution or be put out of business.   Yes, I firmly believe that the open source systems are inferior.  If they provided a better, more reliable product and had a lower total cost of ownership, the 'lock-in' would not exist.'Lock in' often happens to unsuspecting organizations (or people!) because of the pervasive marketing that the companies behind the closed source systems can provide.  As an example, for most personal computing (web browsing, document creation music, photos, etc.) a GNU/Linux solution would be preferable to Windows, as not only is it cheaper (free!) but it is also faster, more secure, less vulnerable to viruses and as easy to use.  But Microsoft has the monopoly, machines come with Windows installed and schools teach using Windows.  It's not because it's better, but because it's well known.  (Note: MS Windows is indeed better for some things like gaming because game developer write for the most used platform, and specialty applications like Photoshop for which their free alternatives always lag a version or two behind.)The money in the system is NECESSARY for this constant innovation. It is not thrown away. It is spent to pay the smartest nonprofit professionals in the world to invent solutions that help nonprofits serve their missions more effectively and on a larger scale -- TODAY rather than next year.As I've stated above, the free and open source community has its share of brilliant developers - many in graduate degree programs - that regularly advance the state of the art.  Closed source companies like Microsoft and Blackbaud have little need to innovate as they have a steady stream of money coming in.  Of course, they will innovate and provide new features they deem necessary to appease the largest - and richest - population of their clients, without regard to the needs of the smaller ones.That said, this is just my experience after having talked to somewhere between five and ten organizations that have specifically left the closed source world for a free and open source alternative.  So it is hardly a representative sample.  One final comment about the open source solutions providers (such as CivicActions):  if you are using Blackbaud and decide at some point the company or the product is just not a good fit, it's very difficult to leave (that's 'lock in').  But with open source - based on open standards - you can easily export your data and re-import it into another product.  Or switch consulting firms if the company just doesn't work for you.  That's "zero lock-in".I like the sound of that much better.