November 7, 2012

THe Election – Death of the Hanging Chad?

Yesterday was Election Day in the United States. There are elections of some variety almost every year – but clearly the one that garners the most attention is the one every four years when a majority of the population turns out to elect the President. Just as so much of business these days is regulated, the election process must also meet compliance guidelines. The Help America Vote Act (HAVA) of 2002 was passed by the United States Congress to make sweeping reforms to the nation’s voting process. HAVA addresses improvements to voting systems and voter access that were identified following the 2000 election.

Considering the volume of local, state and federal elections that are held in the U.S., the demand for election management software that is HAVA-compliant is vast. This small niche of the application software market is currently dominated by a select number of companies. The most notable recent acquisition in the space was that of SOE Software by Scytl at the beginning of 2012. Scytl is a Spanish-based company and to date serves customers in over 1,100 jurisdictions in 30 states and 15 state-wide customers including the swing states Virginia, Florida and North Carolina. Other major players in the space include Election Systems & Software, Inc. based in Omaha, NE which acquired Election Systems Business from Diebold for $12.1 million in 2009 and Toronto-based Dominion Voting Systems Corporation which purchased Premier Election Solutions, Inc. from Election Systems & Software in 2010.

Prior to the 2000 Election and the proceeding HAVA legislation, the demand for these kinds of services was nearly non-existent. Once again, compliance has created more market opportunities and new business. Compliance solutions are thriving and create business everywhere – even on Election Day.

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