Consona Corp., an amalgamation of ERP and CRM vendors serving small and mid-sized companies, is one of the enterprise software companies built up using a growth-through-acquisition model. But while some vendors that rely on private equity to sustain their acquisitive strategy have been thwarted recently by weak market conditions, Consona has no plans to pull back on the reins.
Consona, formerly known as M2M Holdings, was launched formally in 2003 when equity firm Battery Ventures acquired and took ERP provider Made2Manage Systems private. The company received an additional $50 million early in 2006 when Thoma Cressey Equity Partners took a minority stake in the company.
After a string of more than 10 acquisitions and having amassed a customer base of 4,500, Consona expects to finish 2007 with $140 million in revenue. The company made $30 million the year Made2Manage went private. At its recent annual user conference in Orlando, CEO Jeff Tognoni stressed that Consona's approach to acquisitions — targeting established, micro-niche vendors with a razor-sharp focus on customer intimacy — is the key to its endurance.
"Quality deals get done in any market," Tognoni said in an interview with Managing Automation at the conference. Since Consona takes a strategic approach to acquisitions, the company is not as subject to derailment in the face of volatile debt markets as those that target struggling vendors at bargain-basement prices solely in the interest of gaining market share, he said.
Several deals are in the pipeline for the short to mid-term, Tognoni noted, and officials hinted during the conference that next up is a deal that would build out chat and collaboration functionality in the company's CRM business unit.
Consona compares itself to CPG conglomerate Procter & Gamble, opting to maintain the well-established brands of its acquisitions — such as AXIS Computer Systems, a supplier of ERP software for metals, wire, and cable manufacturers; CRM vendor Onyx Software; and Cimnet Systems, an ERP provider for printed circuit board manufacturers — that customers have grown accustomed to, versus fusing products together and trying to blend functionality into a one-size-fits-all offering. (Consona does plan eventually to standardize on Microsoft's services-oriented .NET framework.) Meanwhile, the product lines share administrative support services, including business process and implementation consulting, education, and IT support.
"Consona's customers have unique business processes that enable them to survive in the tough, competitive manufacturing world," Tognoni said. "Mile-wide, inch-deep products aren't the answer."
This article originally appeared in the December 2007 issue of Managing Automation.