Corporate meeting buyers shrugged off a merger announcement last month by the industry's two leading technology companies and said they will continue to push customization and development of any tools to help them strategically manage their events. Competing tech providers, meanwhile, scoffed at the notion of market dominance in an industry this volatile.
Philadelphia-based StarCite Inc. and Santa Clara, Calif.-based OnVantage on Aug. 9 announced a complete merger, using the OnVantage technology platform and the StarCite brand
(Meetings Today, Aug. 14).Customers of both companies will proceed under the current terms of their contracts, using their respective OnVantage or StarCite technology and service solutions through December 2007, according to a company release. The transaction is anticipated to close in the fourth quarter of 2006.
New York-based pharma giant Bristol-Myers Squibb has used pieces of StarCite technology for many years, according to Lynn Ridzon, director of global meeting management. "We're going to use whatever is better," Ridzon said. "I'm somewhat familiar with the OnVantage technology but we're very comfortable with what we're using right now. We don't use the entire system because we have our own system for the actual tracking of meeting expenses, but we do use the attendee registration tool and sourcing tool."
Though the merger will have little effect on the BMS meetings process, Ridzon said she generally sees the news as a positive development.
"For the customer, it's great, it's just interesting that they were each other's best competition and they took that equation right out of the mix. I don't see anything, quite frankly, wrong with that for the end user. We're going to get the best of both worlds."
BMS' Ridzon said she does see a greater opportunity for industry benchmarking, but thought the tech company should be somewhat careful about disseminating that information.
Hewlett-Packard has used StarCite tools as part of a massive implementation of a comprehensive meeting management technology system
(Meetings Today, July 17)."To me, it's a non-event," said Lea McLeod, director of travel and meetings for Palo Alto, Calif.-based HP. "I said that I don't want my customers to see it and as long as you keep it transparent, it's fine."
HP may even stand to gain in local resources as it links to a California-based supplier. Officially, StarCite's headquarters remain in Philadelphia.
"OnVantage had a little bit stronger reach in the region and that will be a huge advantage for us. In general, I see it as a positive as long as they don't create any instability that's visible to our users," she said.
HP plans on converting to the OnVantage platform during the next few months. Opportunities still are unclear for greater benchmarking among the client base, she said.
"We haven't really talked about that. Anytime that you have a greater critical mass, you have the opportunity to do that," McLeod said.
The merger of the two rival tech companies actually brings together five technology companies that have consolidated during the past six years and long-term customers seem to have the most to gain. For clients still operating on contracts they signed with Plan2Attend—the technology offering of BCD Meetings & Incentives that was discontinued and replaced with StarCite early this year
(Meetings Today, Feb. 6) —they now are getting a much larger technology offering at P2A prices.
Yet, some customers swept up in this year's technology consolidation are concerned they will lose the customization offered by smaller providers.
"I'm hoping that they don't stop their flexibility. I have yet to buy a piece of technology here that we've taken out of the box and just used like it is. We customize the heck out of everything," said Pam Esker, strategic sourcing manager for Golden, Colo.-based Coors Brewing Co. "We're concerned that we're going to get constrained."
Coors originally used Plan2Attend for meetings technology, and pre-merger had preferred the OnVantage technology to StarCite's. Esker said the company would begin using OnVantage tools within weeks. "We didn't feel that StarCite was going to meet our needs because they aren't quite as customizable as OnVantage," she said. "So it's interesting, it goes full circle: P2A to StarCite to OnVantage."
In the initial stages of a strategic meetings management initiative, Esker said she doesn't need all the bells and whistles of a complete tech package.
StarCite executives said at the time of the merger that just 3 percent of corporate meetings expenditures is under control, leaving a large untapped market for both the company and its competitors. Though the merger clearly establishes StarCite as the largest meetings technology provider—it defines itself as an "on-demand meetings management company"—competitors brushed off any ideas of market dominance.
McLean, Va.-based Cvent Inc., launched seven years ago, now is generally considered the second-largest corporate meetings management technology provider.
Cvent CEO Reggie Aggarwal said the merger has clarified the competitive field. Meetings technology is a relatively young industry, with a lot of opportunity for development and growth, according to Aggarwal.
"Since it is a growing industry, you need to have a few big players out there," he said, "otherwise there is too much money going into marketing and not enough going into research and development."
The massive amount of venture capital that has flowed into the industry over the past 10 years, with some notable losses, is typical of a young and growing technology market. Cvent has been profitable for more than three years with self-funded growth, Aggarwal said, and the company sees that as a benefit as the market shifts to a more natural supply and demand state.
"There will be continual investment into this, but also perhaps a loss of appetite because after almost $1 billion goes into an industry, they need to get returns and growth. The good thing is we're trending that way," he said.
Seventy percent of Cvent's business comes from corporate clients, Aggarwal said, although the company may have been erroneously perceived as targeting associations. Aggarwal said he had no fears of StarCite dominating the market.
"The reality is that it's completely blown out of proportion," Aggarwal said. "By definition, any company that's not in the hundreds of millions is not going to be dominant. Even a 20-person company can compete."
Cvent will continue on its "blocking and tackling" approach to the competitive field, he said, and grow the business.
"We wish StarCite luck because they're a good competitor and a fair competitor and it's good that starch is coming to the top players so that we can all focus on R&D," Aggarwal said. "In general, the consolidation of the five companies in one over the last three years has been healthy for the industry."
Vanessa Vlay, vice president of business development for San Francisco-based Certain Software, said she also sees the merger as a positive development in the meetings technology market.
"With their investors and all the management, it really validates the growth of the industry, the recognition of the industry and the move to strategic meetings management programs," Vlay said. "We see them, obviously, as a competitor, but for us it has been somewhat beneficial because the merger has created some confusion in the market."
As StarCite focuses on transition issues, Certain has gained an opportunity to push customization, stability and consistency, she said. Certain is expanding its staff, and Vlay said she that hopes to hire some of the StarCite or OnVantage employees lost in the merger. "We're really trying to find where people were laid off and say we're hiring. It's so much better to hire somebody that knows this industry," she said.
Most of Certain's growth comes from contract renewals, Vlay said, and corporations especially look for stability and consistency in their vendors.