After buying 10 ERP/CRM brands in the past few years (including CRM and KM vendors Onyx and KNOVA), Consona CEO Jeff Tognoni put that strategy on hold for the past year or so. But they’re poised to continue growing through acquisition as buying opportunities materialize in 2009.
Last year around this time I attended the Consona user conference and learned that their strategy was to acquire strong “franchises”—quality software companies with a strong customer base—provided they could be purchased at a reasonable price. However, since then, no acquisitions of note. What gives?
Turns out, Tognoni says, that the credit markets actually started to tighten last summer, and Consona had sticker shock at the pricing of some acquisition targets. Better to wait for a better time to buy…like now.
Stock prices have been hammered and, while credit is still tight, Consona can tap Battery Ventures for funding. The next 24 months could be quite interesting as buying opportunities increase.
Is Consona Customer-Centric?
I’m always intrigued when any company proclaims they are customer-centric, especially in the enterprise software industry which, save for some SaaS and niche vendors, has more of a sell-it-and-run reputation.
According to Consona’s milestones, in 2002 Tognoni joined Battery Ventures and proposed to “shift software companies to a profitable, customer-centric operating model.”
Tognoni told me that Consona was “in process of becoming” customer-centric…a pretty candid assessment that jibes with research we’ve done over the years. If you buy the notion that customer-centricity is a journey, the idea is to keep becoming more customer-centric, making money along the way, but you never really get “there.”
For what it’s worth, I think Tognoni has a pretty good idea of how to assess customer loyalty (surveys are not enough) and manage people to make customer-centricity pay off. Happy trails!
“House of Brands” Didn’t Work
Until now, Tognoni’s branding strategy was to let each acquired software company keep it’s own brand, and have Consona operate kind of like P&G’s “house of brands,” he said.
Sorry, Senator, but you’re no Procter & Gamble.
Unfortunately, this led to confusion that “Consona is only collecting assets” rather than continuing to invest and build a company. So, Tognoni admits the brand strategy was a mistake, which I find pretty refreshing coming from a software executive.
The new game plan: bring all the acquired companies together under the Consona brand. Onyx and KNOVA solutions are now part of the Consona CRM division, under General Manager Tom Millay’s stewardship. Another division handles all the ERP solutions.
New Product Bundles
Onyx focused on the IT market in the early days, then shifted into some other industries including financial services. Millay said the turmoil in the financial markets has been “challenging”—some prospects have tabled projects.
Still, he seemed reasonably upbeat about the opportunities ahead for the products formerly known as Onyx and KNOVA, which are targeted to mid-sized ($250M+) and large enterprises.
New product bundles should help. As part of the new branding approach, Consona CRM has released:
- Consona Customer Management (representing the former Onyx solution)
- Consona Knowledge Management (representing the former KNOVA solution)
- Consona OneServe Citizen Management (a vertical industry solution for local governments in the UK)
- Consona Knowledge Driven Support (integrated case and knowledge management for service and support teams)
- Consona Salesforce (sales force automation and opportunity management functionality for inside and field sales)
I asked Millay about product plans for the “social enterprise,” which I see as important emerging area. Based on his response, I’d said it’s not exactly on the front burner. But he does see some opportunities for KNOVA—oops, I mean Consona Knowledge Management—to expand its forums to add more email and chat functionality.
Strap on Your Helmet
It’s a safe bet that the next year will be quite challenging for all software companies. The new branding strategy and updated product bundles should help Consona perform with the assets it already has, while keeping an eye out for good acquisition opportunities.
Further Reading:
Consona Corporation Announces Rebranded Consona™ CRM Suite
Consona’s Growth Strategy: Franchising, Not Fusing
