FirstTake: Dachis Group Clinches Powered, Threatening Incumbent Consulting Firms

Acquisition of ‘Powered’ Grows Social Software and Services Footprint in Enterprise Companies. Austin based Dachis Group, who has a war chest from Austin Ventures, has been on a buying spree and has pre-briefed me in their acquisition of Powered, a social and marketing platform with strong social media services, who they recently acquired, including Crayon, Stepchange and Drill Team (read my analysis). To date, Dachis Group has acquired seven firms such as Xplane digital management and change management orginization, the adoption council 2.0, a user community, and many of my former team mates from Forrester’s social computing research group.

Dachis, An Enterprise Contender, Threatens Incumbent Consulting Firms
In this mornings post (coincidentally timed) I released data how social media boutiques, like Dachis, are winning deals against incumbent traditional agencies. Jeff Dachis, former agency maven, has clinched a sizable acquisition investment, and has experience growing digital agencies, such as Razorfish in the first wave. Expect Dachis to compete strongly with incumbent consulting firms. I asked Peter Kim, (former Forrester Colleague) about their vision and he replied their vision is “Holistic point of view stemming from social business design, and how to formulate a strategy, activating them, understanding collaboration and company culture”. The last time we heard this type of chanage management vision was 10-15 years ago with ERP deployments.

Industry Impacts: What You Should Expect
Here’s my industry analyst perspective on what these changes mean:

  • Raises questions about being a platform provider –beyond just services. Dachis purchased Powered, which offers a marketing platform with social business software features and poses. This will pose questions from customers who don’t want to be funneled into a platform owned by a partner, especially if they have their own platforms in place.
  • Strain existing ecosystem partnerships. Likely puts strain on Dachis’s partnership with Jive who offers social business software, and a variety of other software players they’ve aligned with. I’ve not spoken to Jive, so this is my own perspective.  Expect Dachis to claim an agnostic approach, but expect them over time to launch and reform software to spread into enterprises giving them account lock in and then recurring revenues.
  • Threaten incumbent consulting firms. Although outnumbered, Dachis has over 220 employees now globally, and can work with large multi-national firms threatening IBM Global Services (see recent announcement), Deloitte, KPMG, Accenture, and even Forrester’s consulting group.>
  • Scrutinized as a hodge podge of acquisitions without a common vision. Dachis Group had formerly released a confusing framework of social business design, but has since started to crystalize their messaging around social business design.  Yet expect buyers and competitors to point out how Dachis’s acquisitions of seven firms in a short period of time really is only an assorted mixture of companies.

My Take: Strong Move For Dachis Group, Furthering Credibility as a Social Business Firm
Dachis Group made a good move, this gives them them software infrastructure to lay out into brands and then have sticky deals with recurring revenues.  Furthermore, their growing staff gives them ability to take on larger deals where incumbent firms already play. I asked Peter Kim about the terms of the deal, what will happen to the Powered team and software, but he was unable to comment.  To overcome challenges, Dachis Group must prove to the market they are one consolidated offering (not just a mixup of acquisitions), and clearly articulate how they’ll work with other software and service providers in the industry.

Update: Aaron Strout, Powered’s CMO gives his take.