BY FOLLOWING AN EARLY SPRING PURCHASE of NewStar Homebuilders with a June 1 acquisition of FAST, Canadian software company Constellation Software may get what it wants: a consolidated builder software market with Constellation remaining one of the industry's dominant players.

Constellation is a new name in the home building market. The company is the sixth-largest software company in Canada, with more than $100 million in sales, 700 employees, $40 million in cash, and no debt.

The company approached the top managers of all the major back-office software vendors at the International Builders' Show Las Vegas last January. Initially, only NewStar agreed to sell, but last month's sale of the venerable FAST may be the break that Constellation was looking for.

“I'm going to have to rethink my position,” says Chris Maxwell, president of TOM Systems, which, as of early June, was still independent. “If they migrate the NewStar people to FAST, they will fail, and if they try to migrate the FAST users to New-Star, they will fail,” he says. “A next-generation product could succeed if it's done properly, but it will be several years down the road.”

Dexter Salna, president of NewStar, dismisses any notions that Constellation is looking to build a next-generation product—at least not right away. Salna says Constellation will start off by supporting both FAST and NewStar and is adamant that the Canadian company will not overpromise. He also says Constellation will not get sidetracked by stock or e-commerce plays the way BuildNet did during the Internet boom.

“At some date in the future, there's a possibility that we would go public,” says Salna. “But our intentions are to build a good stable product for our customers ... and focus on the enterprise, resource, and planning side of the builder's requirements,” he adds.

That may be true, but Craig Schweikart, a senior consultant at Shinn Consulting who specializes in home builder software, says builders should watch carefully.

“The only way Constellation can get the return on its investment is [if] NewStar users switch to FAST, or the FAST users to switch to NewStar,'' he says.

For Salna, who's been through at least 11 acquisitions, it makes perfect sense that Constellation, with its strong track record consolidating small niche software markets, could do more of the same in a home builder back-office market.

But can Salna deliver the 20 percent sales and profit growth annually that Constellation is looking for? With NewStar and FAST under its belt, things are going Constellation's way.

The problem is that it will be very expensive to support both platforms long-term. Expensive and potentially troubling. NewStar is a sales and marketing machine with an integrated product that is still based on the client-server model. FAST is well respected, regarded as one of the premier process management systems, but is often viewed as a kind of cult with close ties to Shinn Consulting. The two corporate cultures couldn't be more different. Aligning the two companies may be tougher than Constellation realizes.