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.

10 Replies to “FirstTake: Dachis Group Clinches Powered, Threatening Incumbent Consulting Firms”

  1. Thanks Jeremiah, we always appreciate your critical eye. Allow me to point out a few notes to add some context:

    – You are correct, we are and will remain technology and platform agnostic. We have been abundantly clear about this and it will remain the case.

    – Uniquely, we have crystal clarity around our vision and our belief that Social Business will continue to gain adoption as organizations realize the power in designing their organizations to effectively connect and engage with all their constituents

    – In short order, the market will see us operating as a one firm firm. This is already happening internally to a large degree, and will continue to accelerate.

    As always, its a pleasure to hear your perspective, and happy to discuss more at length.


  2. Thanks Jeff, I appreciate the vision. I'll be in Austin this spring, let's do lunch again.

  3. I for one was extremely excited to hear of yet another strong aquistion by Dachis and will importantly provide some excellent brain power and experience as well as technology. As i am experiencing currently the tools and technologies are still only part of the overall strategy and solution when it comes to social business within large global organisations, whats more important is how we can better understand the shift to real time conversational business and collaboration with regards to the psychological impact on employees and customers. In other words what are the changes in habits and behaviour that will drive people and business to a more connected environment both inside and outside the firewall and move away from pure email solutions. This is the area where the Dachis group with their acquisitions, vision and experience can succeed in this space. Providing solutions that put people at the centre over technology and content is a very new way of thinking yet a surprisingly obvious one 😉

  4. Let me add some color here too.

    Austin Ventures, by nature of their role had to play a disinterested party. This partnership came together because it makes sense.

  5. Just a random passing comment…

    In over a decade online in a social capacity, I've never heard of Dachis until they acquired Powered and began pushing press releases touting their greatness. Literally, I attended just -one- Powered webinar and, next thing I know, here's a press release from Dachis Group.

    “We are the world's largest Social Business consultancy!” First of all, why is “social business” capitalized? It's not a proper noun. C'mon. This was followed by nearly 1,000 words, less than a dozen of which were about anything beyond how great Dachis is, how they've acquired SO many other firms, and all their FABULOUS clients.

    I didn't bother to unsubscribe, as I figured it might just be a one time deal. Given the way I feel about new developments with my own business ventures, how could I fault someone for maybe going a bit overboard with excitement for theirs? But then, this morning…

    “DACHIS GROUP COMPLETES $30 MILLION SERIES B FUNDING.” That's right. Another press release, with a locked-and-loaded, full CAPSLOCK subject line. Has the message shifted from “We're HUGE on the Internets” to “We're ROLLING in cash?” No. Wait. It's immediately followed with the same content as the last one – how great we are, who we've acquired, and our FABULOUS clients.

    It strikes me as ironic that such a large, well-established, and well-funded social business consultancy would be so heavy-handed with the push marketing these days. I mean, PRESS RELEASES? Press releases.

    Just because Dachis buys a company does not mean Dachis buys their customers too. Your brand is what you DO. Being great means doing great things – not pushing unsolicited press releases talking all about yourself.

    Who cares? /rant

  6. Management consulting indicates the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice and access to the consultants’ specialized expertise

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