Changes Afoot: What’s Next for the AMS Space?

The recent sale of one of the largest companies in the association management software space has ushered in a period of evolution. What should customers expect down the road?

It isn’t the first merger in the association management software space, and it may not be the last.

Nonprofit software firm Abila acquired Avectra, one of the largest AMS providers last month in a deal affecting more than 8,000 organizations. While Abila (known as Sage Nonprofit Solutions until a name change this year) plans to keep the current Avectra teams in place for the time being—albeit with a slight rebranding to “Avectra: An Abila Company”—the acquisition reflects a dynamic change happening in the industry.

For one thing, it’s far from the only move of its kind. In the past few years alone, the M&A activity has been high: In 2010, CDC Software acquired Computility, then merged with Consona in 2012 to create an entirely new company, Aptean, which only focuses a small part of its business on the AMS space. In 2010, Avectra bought NFi Studios, eventually folding NFi’s MemberFuse Social CRM platform into its larger offering. And late last year, merged with Affiniscape, combining to create an entity serving 2,300 customers—an entity that was quickly folded into the brand.

Due to its footprint, though, the Avectra sale could have a big impact on a number of organizations, as it’s one of the most widely relied-upon AMS companies, and its products (such as its netFORUM member database software) are essential to the activities of many associations.

What to Keep in Mind

So, when changes come up in situations like these, what should you know? I posed the question to a couple of association technology pros, and here’s what they had to say.

Effective Database Management‘s Wes Trochlil, who has kept a close eye on the AMS space over the years, says that it’s currently evolving quickly after a somewhat more stagnant period.

In terms of the the current deal, Trochlil says Abila and Avectra have traditionally had different focuses—charitable nonprofits and associations, respectively—which have notable business differences. Nonprofits get donations to help drive the organization’s mission, he notes. “Membership organizations typically are providing some sort of value, so there’s more of a business relationship there,” he says. “If I’m giving you dollars, I’m expecting something back in exchange for that.”

I think in situations like this, no one can really predict the future, and so what you have to do is ask very straightforward questions about what the organization’s plans [are] for the near-term and the long-term.

Mergers and acquisitions do lead to some instability, but as ASAE CIO Reggie Henry, CAE, notes, those involving companies that have a strong understanding of the spaces likewise tend to produce new entities that have a better understanding of the field.

Do they work out better for customers? It depends, both say, but Trochlil offers YourMembership’s transparent handling of the Affiniscape acquisition and Avectra’s various deals over the years as examples of how the changes can work well for everyone involved.

Don’t Get Blindsided

It’s hard to judge how corporate changes could affect business relationships ahead of time (“nobody expects the Spanish Inquisition,” as one bunch of corporate hotshots famously put it), but a little clarity goes a long way.

“I think in situations like this, no one can really predict the future, and so what you have to do is ask very straightforward questions about what the organization’s plans [are] for the near-term and the long-term,” Trochlil advises. “They do have plans, and they’re not interested in losing customers.”

He says corporate changes that force software changes can have benefits, such as lower costs for current customers required to move to different platforms. But with that change also comes the potential for focus being shifted away from certain audiences, such as niches that no longer make sense under a different corporate structure. This could make a company not work as hard to keep one set of customers over another. (But Trochlil also notes that such niche-focused companies would be “tougher to combine” in such buyouts.)

Due to the complexity of AMS solutions, it’s unlikely that a company will choose to keep both platforms running, Trochlil notes. But even if an association is transitioning off of one platform and toward another, as happened in the case of YourMembership and Affiniscape, he says you should expect vendors to offer “a migration path” for current customers to help get around database inconsistencies that are likely to crop up.

Henry, meanwhile, says that strong relationships between vendors is key. For example, he says he makes a point of meeting with the organization’s vendors each year to make them feel like they’re partners with the association. That level of closeness is important with vendors in general, but with AMS providers specifically, because the solutions are such a huge expenditure for many associations.

“Don’t hold your vendors at arm’s length,” Henry told me. “If that’s the case, get them out of there!”

Most people in the organization probably need one-fifth of that big unit to do their jobs, but you have to pay for the whole big thing for everybody.

So What’s Next?

With the AMS field evolving, what should associations expect down the road—both in terms of corporate structures and offerings?

As far as mergers go, Trochlil says we’re seeing a lot of activity on this front at the moment, but that looking at the bigger picture, it’s likely to slow down in the next few years. Henry agrees that the AMS space is active on the business activity front—moreso than some other association-related businesses such as accounting or CMS providers, but less so than some tertiary providers like social media, which is a fairly fluid space.

The ASAE CIO, meanwhile, believes that the tech world is advancing quickly (accelerating in the last few years alone), and the AMS space will come to reflect that in terms of its product lineup. In the next few years, he says he hopes to see AMS products that are more simplistic in shape, as well as products that make it easier keep tabs on the various vendors an association might use. The consumer space’s move toward apps also has the potential to influence the AMS field, Henry says.

“Most people in the organization probably need one-fifth of that big unit to do their jobs,” he states, “but you have to pay for the whole big thing for everybody.”

With the rise of mobile, Henry foresees providers adapting.

Where do you see the AMS space going from here—and what are your long-term hopes? Give us your take below.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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