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Mike Gianoni takes a look back — and a look forward — at Blackbaud, one of South Carolina's oldest and largest technology firms. He is in his fifth year of leading the Daniel Island-based company. Wade Spees/Staff

Outside the wrap-around windows of Mike Gianoni's corner office is a patch of forest that represents the next phase of Blackbaud Inc.'s growth.

It's where the software company — now in its 30th year on the South Carolina technology stage — will be adding onto its new headquarters.

It’s also the latest in a number of upgrades at Blackbaud since Gianoni arrived on the scene as CEO five years ago.

The company's core business from the get-go has been helping nonprofit groups process their financial donations and raise more money. It's been the dominant global player in that niche industry for years.

“That’s where we started. We’ve grown far beyond that,” Gianoni said.

He said the goal now is to provide more services to more customers. He also wants Blackbaud to be their only go-to tech vendor whenever possible. And the infrastructure is now in place to do just that, he said. 

Perhaps the most important change since Gianoni came on board: Blackbaud has moved most of its services to the cloud, a critical pivot that moved it away from the old way of peddling software and pulled it into the industry's modern-day center of gravity.

Today, Blackbaud offers nearly 100 products, with the goal of making the maze of services nonprofits need easier to navigate.

“We’re going from being a departmental player to an enterprise player,” Gianoni said. “It broadens our ability to provide a much wider solution.”

Cloud bound

Software had to be physically installed onto computers when Tony Bakker started Blackbaud to work with schools in the early 1980s. The company's name is a play on words — a combination of the first half of “blackboard” and “baud,” a unit of measuring the speed that information is processed.

Its leading product, Raiser’s Edge, was predominately used for fundraising and soon became the industry standard. By 1991, three years after moving it operations to South Carolina from New York, the company had annual sales of $12 million and about 145 employees, according to a local news report.

Flash forward to the cloud: It allows companies like Blackbaud to sell subscriptions rather than more complicated one-off licensing arrangements. Instead of having to buy and download software, customers are given easy log-in credentials, and information is maintained off-site in remote data centers. For the provider, this approach tends to produce a more stable recurring revenue stream.

Most software is sold this way now, and it’s nothing new. America's leading tech businesses — Microsoft, Google, Apple — were buying into the movement by the late 2000s. Benefitfocus, another Daniel Island software firm, was pitching its cloud-based products more than a decade ago

But Blackbaud — publicly traded since 2004 — was behind the curve, said Stifel Nicolaus analyst Tom Roderick, who has followed the company for years.

Roderick said he was waiting for someone to come along and invest the money needed to catch up with the rest of the field. That time came in 2014, when less than half of Blackbaud's sales were tied to cloud-based products. That figure is now up to about 90 percent.  

Blackbaud “ripped the Band-Aid off when Gianoni came on board,” Roderick said.

Known for his gregarious smile, Gianoni is the company's fourth full-time CEO. The son of a machine shop owner, he grew up down the street from EPSN's headquarters. He keeps a guitar signed by country music star and local resident Darius Rucker in the office.

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Blackbaud CEO Mike Gianoni (center) presides over an impromptu meeting in a hallway with executives (from left) Tony Boor, Walter Loiselle, Todd Lant and Tom Pate in the company's Daniel Island headquarters. Wade Spees/Staff

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Mike Gianoni takes a look back — and a look forward — at Blackbaud, one of South Carolina's most prominent technology firms. He is in his fifth year of leading the Daniel Island-based company. Wade Spees/Staff

The Connecticut native was recruited to Blackbaud from Fiserv, which makes financial software that powers online and mobile transactions for banks and credit unions. He'd been overseeing a division that was twice as large as his next employer in terms of revenue.

"I think the mandate is, 'How do we accelerate growth?'" Gianoni said shortly after joining Blackbaud, before "cloud" became a commonplace tech term. "The mandate is grow revenue faster, and I think we can."

The numbers bear out that early prediction. To date, Gianoni has engineered eight acquisitions totaling nearly $760 million in an effort to move Blackbaud deeper into new areas, such as education and data analytics. 

Over the same period, revenue has climbed 69 percent to $849 million in 2018, for an annual average gain of about 13 percent over the past five years. 

Blackbaud's stock also enjoyed a nice run-up for most of Gianoni's tenure as chief executive. When he reported to work in January 2014, BLKB was fetching around $39. Last year, the shares peaked at $113. But the bottom fell out in October, after the company cut its revenue and profit forecast. The ensuing sell-off knocked more than 20 percent off the stock price. The shares have been slowly regaining lost ground and were trading at about $78 on Friday. 

Roderick, the analyst, said he was somewhat disappointed by the company's performance last year, saying a confluence of issues slowed growth and predicting that it could be a couple of years before some of Blackbaud's investments from 2018 start to pay off. 

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Anchor tenant

One of those investments was in old-fashioned brick and mortar.

In June, Blackbaud completed the first 172,000-square-foot phase of its new corporate home. The company employs some 3,400 workers — about half of them on Daniel Island — after roughly doubling its payroll over the last decade.

It plans to sustain that growth, promising 300 more local jobs by 2023. By then, it plans to add another building to fill out the Fairchild Drive campus.

With four decades under its belt in the Charleston area, Blackbaud's impact now extends well beyond Daniel Island.

For instance, the company has been the breeding ground for numerous startups.

It's also an important magnet that attracts new tech talent to the Lowcountry, as is neighboring Benefitfocus, said Marc Murphy, CEO of Atlatl Software and a board member of the Charleston Digital Corridor.

"Charleston needs those foundational success stories to anchor the tech community here," Murphy said. "Without a doubt, Blackbaud would be that foundational anchor."

James Clements, president of Clemson University, which is a Blackbaud client, agreed. 

“I think the state is very fortunate to have a company like Blackbaud here,” he said.

Clements said he's also impressed with what Gianoni has done with the business over the past five years, as it continues to evolve, diversify and grow.

“He’s a visionary, strategic incredible leader,” he said. 

Reach Mary Katherine Wildeman at 843-937-5594. Follow her on Twitter @mkwildeman.