Constellation Acquires Builder1440 and G.1440
January 04, 2010
The residential construction technology landscape underwent a bit of change today, as Constellation HomeBuilder Systems, www.constellationhb.com, Markham, Ont., announced the acquisition of Builder1440, www.builder1440.com, Baltimore, Md.
The acquisition will not only include the Web-based sales and CRM (customer-relationship management) products from Builder1440, such as Sales1440, but also the staff and solutions of Builder1440’s parent company G.1440, www.g1440.com, which provides consulting and IT staffing services. Builder1440 will become a subsidiary of Constellation and it will also maintain its offices in Baltimore.
Constellation currently provides a CRM solution to the homebuilding market, Constellation CRM, and by acquiring Builder1440 has seemingly increased its presence in a CRM space that looks to become a hot area of investment in 2010. According to a recent survey of Constructech readers, 42% plan to spend on customer-facing applications in the next year, including sales, marketing, and CRM technology.
Speaking to the overlap in product lines, Dexter Salna, president, Constellation HomeBuilder Systems, points to the company’s history of bringing two competing products together and making them work successfully (i.e. the FAST and NEWSTAR acquisitions). According to Salna, there is very little overlap between the customer base of Builder1440 and that of Constellation’s products.
“It is our typical acquisition strategy … it is too early to evaluate what happens, but if you take a look at our historical acquisitions, we have acquired FAST and NEWSTAR that were directly competing products. We were able to go and get best practices from FAST and bring them over to NEWSTAR, and vice versa,” says Salna. “We give customers choice and there are a lot of great FAST customers and there are a lot of great NEWSTAR customers. We didn’t swap people from one product to another because it is not good for the customer.”
Constellation plans to continue providing solutions, services, and support to Builder1440’s customers. Of course, one of the byproducts of this acquisition is Constellation will be able to take advantage of the expertise of Builder1440’s management team and combine both companies’ customer base.
Naturally, management experience and customer growth is a benefit for both Constellation and Builder1440.
“I am very excited about this opportunity to be part of a large technology team and to see what strategy we can put in place to leverage the size that CSI (Constellation Software Inc.) brings to the table,” says Larry Fiorino, president, G.1440 and Builder1440. “They are the big dog on the porch now and we want to work with them on helping them grow and we want them to help us grow. So we think it is a match made in heaven.”
Builder1440 continues to release and support new products. For example, it will be rolling out a new offering at IBS (Intl. Builder’s Show), Las Vegas, Nev., Jan. 19-22, called ListBuilder1440.
“What that does is it allows builders to list their homes on a number of different listing services straight out of the data that they already have with Sales1440,” says Matt McShane, vice president, Builder1440.
He continues, “We think it is a great opportunity to combine with a large company that has a large customer base and are very knowledgeable in the homebuilding industry and, almost equally as important, in the software management part of the business. A lot of people out there know homebuilding, but not a lot of them know how to run and maintain software. So we get to add our product suite to that group that knows homebuilding and also knows technology and we find that very exciting.”
Beyond strengthening the customer base, this acquisition will also allow the companies to reinforce product offerings. In the past year, Constellation has been offering some of its products in a hosted environment, which allows builders to minimize upfront costs. Now, with the acquisition of Builder1440, it can offer builders a sales platform in a SaaS (software-as-a-service) model.
One of the big questions on many builders' minds may be how will this impact Builder1440's partnerships with other technology companies? Just over a year ago, Builder1440 and HomeFront announced a partnership to integrate their respective technologies. Builder1440 also has multiple partnerships with other technology vendors such as BuilderMT and Sage, among others.
According to Constellation, it will continue to support and enhance the software integration in Sales1440.
“Having said that, we can only control our own software and systems and regardless of the third-party software system you are currently using, we expect all of our technology partners to act in good faith and continue to provide a stable solution for the homebuilding industry,” says Chris Graham, director of product development and marketing, Constellation HomeBuilder Systems.
In this difficult economic climate, the residential construction industry has seen a number of changes. In the construction technology space, the acquisition of Builder1440 by Constellation will allow both companies to grow their customer bases and technology offerings.
If predictions hold true that builders will be looking to increase their investment in customer-facing technology in 2010 they will definitely have some strong options to consider. It will be interesting to see which providers benefit the most in the market.