Cvent’s rising stock
prices on Nov. 17 preceded an official announcement the next morning that
the U.S. Department of Justice had cleared the path for Vista Equity Partners’
$1.65 billion acquisition of the Virginia-based meetings technology company. In a joint
statement Tuesday, Vista and Cvent announced the completion of that tie-up,
but with a twist: Cvent and Lanyon, which is also owned by Vista and widely
considered Cvent’s closest industry rival in terms of technology stack and
client scope, have merged, as well.
The combined Cvent and Lanyon company will operate under the
Cvent name. It will maintain the Cvent headquarters in Tysons Corner, Va., and will
have significant presence at the former Lanyon headquarters in Dallas. Cvent CEO
Reggie Aggarwal will keep his role. Lanyon CEO David Bonnette will step aside
after a management transition.
In a message to Cvent customers, founder and CEO Reggie
Aggarwal focused on investment and the strength of the combined entity, citing
800 technologists to carry on the work of innovation and 700 customer-facing
representatives to support and grow its client base, which now numbers 28,000
in 100 countries. Aggarwal underscored that it would be “business as usual” for
all customers.
Cvent president of worldwide sales and marketing Chuck Ghoorah told
BTN that the combined Cvent would
support all Lanyon technology products, including the transient travel
products, to maintain a smooth customer transition and that “the guiding
principle [of the ongoing integration] will be to do what is right for the
Lanyon and the Cvent customers.”
The Question of
Lanyon
Since Vista announced its intentions with Cvent in April,
the industry had speculated about the fate of Lanyon in the deal. Would the DOJ
require Vista to divest all or parts of Lanyon in order to consummate the Cvent
acquisition? Would the two competitors remain separate under the same portfolio?
DoubleDutch founder Lawrence Coburn correctly predicted in a blog post directly
following the initial Cvent-Vista announcement that the parent company would
combine the two portfolio assets.
Coburn wrote at the time, “It’s still unclear if Cvent and
Lanyon will be merged, but you have to expect that this is the eventual play.”
As a meetings technology competitor, Coburn is hardly an unbiased observer,
and he saw an opportunity to focus on the potential negatives, including the
idea that private equity ownership would sacrifice innovation at the altar of “financial
engineering.”
“There will certainly be a period of paralysis for both
companies,” Coburn wrote in the April blog post. “People will be worrying about
their job security as Vista runs their playbook of eliminating duplication and
seeking efficiencies. ... It’s financial engineering at a major league, world-class level, as few other firms are capable of. Don’t get me wrong—these guys
are respected operators, and they run their playbook extremely well. But
technology innovation is not typically part of the equation.”
Cvent unsurprisingly characterized the motives behind the
Vista acquisition and Lanyon merger very differently: “The merger represents a tremendous opportunity for the $500
billion [meetings and event] industry as a whole,” Ghoorah told BTN. “Vista saw this and by combining
the two companies [created] a clearer path to innovate more because we are at a
larger scale. We can be more innovative and have more game-changing products to
add professional value.”
Asked why it benefits the industry as a whole, Ghoorah said
the biggest-ever meetings-technology acquisition is just the latest indication
of how much value is embedded in meetings and events, and ut should stimulate
innovation in the space overall. “There is so much green field and opportunity.
When we sit down and listen to customers, there are so many exciting ideas out
there and so many things we can add to the road map.”
Getting Cvent and Lanyon through the merger to the
innovation stage may take some time, according to meetings technology
consultant Corbin Ball. In an email to BTN,
Ball questioned the seamless nature of the transition to the scaled-up Cvent and cast
doubt on the idea Cvent will support the entire technology set over the
long haul given the similarity of the two tech stacks.
“It makes sense from an investor’s viewpoint that Cvent and
Lanyon merge—they both have very similar technologies,” he wrote. “There are
lots of duplications between the two companies. It will likely be a bit messy
for each company as the transition happens.”
Chasing the Big
Opportunity
Vista Equity Partners won’t want the grass in that
proverbial green field to grow under its feet during the Cvent/Lanyon
integration. No matter how big the footprint has grown with the merger,
competition will continue to nip at its heels.
Vista’s Marketo acquisition this summer set the stage to
bring end-to-end automation in the meeting and event space under one roof.
Building and innovating with meetings technology may ultimately just dig a
better riverbed in which event data will flow downstream to sales and marketing
automation. Yes, it will continue to capture program spend data and management
data for SMMP, which have been the bread and butter of both Cvent and Lanyon. More
important to the innovation side, though, the collective portfolio could hasten
the market viability of attendee activity data captured in the live event.
Indeed, extracting meaning from event registration through
live interactions and into a marketing automation tool is the next big
opportunity for the meetings and events industry. And all the technology
players know it.
“There’s an awesome opportunity in the marketing cloud,”
said Ghoorah. “The opportunity to track the attendee journey and to put that
into systems like Marketo and Salesforce to track pipeline development—that is
the exciting opportunity for chief marketing officers. The fact that Marketo is
now owned by Vista helps that conversation and helps to realize that
attribution to pipeline. This will finally elevate the meetings conversation to
the C-level suite. We can finally measure the ROI. That’s a real opportunity.”
The fact that Vista clearly is chasing that
opportunity bodes well in terms of how it will invest in the innovation
necessary to achieve it. Nevertheless, Ball observed that scaling up legacy technology
players may not be the quickest way to get there.
“The two companies control about 90 percent of the [strategic
meetings management] market and about the same amount for eRFPs in sourcing,”
he wrote to BTN, basing his marketshare estimate on current SMM business and not accounting for the broad growth potential (a question the DOJ undoubtedly deliberated). “However, I think there is room for newer, nimble companies to
come in to take a piece of both of these areas. Lanyon/Cvent will need to
continue to evolve—and rewrite some of their ancient code—to [stay] relevant.”