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2017, a tectonic year for influencer relations? A world post Gartner + CEB and IDC sold

This January feels like our IIAR April Fool posts came early. After Gartner gobbling the largest peer-to-peer advisory firm CEB (Corporate Advisory Firm) for a cool USD 3.3 billions (2.6b in cash and stock plus 700m debt), the long awaited and many times postponed sellout of IDG, the parent company of IDC, happened yesterday.

Gartner acquisitions: META, AMR, Burton, Ideas, Software Advice, Captera, SCM WorldThose two deals are nothing less than tectonic shifts in the tech influencers space.

Firstly, the acquisition of CEB by Gartner is notable for three reasons:

1. It’s large. 3 billion dollars gorilla like.
If there was no overlap and divestures (CEB also sells some software which Gartner will have to offload to prevent conflicts of interests), the combined turnover Gartner and CEB turnover would be over USD3.3 billions (2.4b+951m) we’re seeing a 40% increase in revenues and the combined entity is on course towards 2,000 analysts. The next players, IDC and Forrester are around USD 300m in revenues, give or take. The last estimates I saw (a while back mind you) were that Gartner has anywhere between 40 to 60% market share. Having such a dominant player means higher prices (some say higher margins were the driver behind Gartner’s acquisition of META Group) and less bargaining power for buyers. It’s also obviously hard to ignore Gartner, so a little advice to vendors is maybe not to pick fights with them -such is their share of mind with technology buyers.
According to Outsell, Information, Media and Technology was around USD 1.6 trillion in 2016.
IT research was USD 4.4 billions, and according to Statista, Gartner was USD 2.4 billion and 54% market share -effectively a near monopoly (after the CEB takeover, they are grossing 3.3 billion in 2017 still according to Statista).
However, just like in the old PCM days, Gartner knows to leave scraps to second fiddles and it leaves space to disruptors -in particular on the sell-side. The IIAR Analyst Firm of the Year constantly showed that 451, Constellation, HfS and other players are definitely more than just worth looking at. And as Crawford Del Prete argues it, a second opinion can be invaluable.
2. Is Gartner plateau’ing?
With the CEB acquisition, Gartner gets access to new C-suite roles. Surely, I’d bet most CEB CIO customers also buy Gartner services and so there might be a bit of customer set duplication however CEB also serves HR, Sales, Finance and Legal functions. In fact Gartner claims it will become the leading global research and advisory company for all major functions in the entreprise.
So this is not a META Group style margins-led competitive take-out (2005) but more an expansion into new markets just like in 2009 as Gartner bought AMR, SCM World and Burton to address techies and supply chain roles.
One could infer that after years of tinkering with metrics to get more leverage, the Gartner executive team saw territory expansion as an EPS growth lever. In other words, this might signal that Gartner’s core business in IT research is plateauing? Nevertheless, with Gartner’s excellent track record in execution (IIAR members can read some tips on contract negotiation here) and international reach, expanding to other functions certainly has legs. It has already ventured in marketing and claim good growth, however Forrester still has a much better hold with this fickle audience.
The good news here for AR and influencer relations folks is the ability to leverage existing relations with Gartner to look at other audiences.
 
3. Does the age of algorithm prediction also apply to Gartner?
Personally, I believe the most significant impact of this acquisition is cultural. After buying and developing no less than three peer reviews offerings Gartner is moving further in the peer to peer advisory world with CEB. This is important not only because buyers value the advice from their peers more than anyone else’s but also because all of a sudden, the mighty technology priest, the feared predicator, the revered oracle becomes is demoted from his/her ivory tower. Truth ceases to be a caste monopoly and becomes the product of algorithm. Gartner famously predicted in the 2015 Symposia the age of the algorithm economy, where those become valuable IP that needs cherishing and runs the world.
As Gartner grapples with the difficult challenge of embedding more bottom-up logic in its research and offerings, it will be interesting to watch what this does to the role of the analyst: will they merely curate and socialise the result of increasingly automated insights? Looking at the profitability of Gartner’s EXP services, this might well be a wet dreams for its execs.

Where does that leave IDC and the others?

Since the disparition of founder Pat McGovern and his philanthropic wish to progress research on the human brain, the media group IDG he founded -and parent of analyst firm IDC– was up for sale for two years with several cliffhangers. We know little of Chain Oceanwide, however my bet would be for a divestiture of IDC at some point.
Whilst IDC predominantly addresses tech vendors, it also enjoys a great brand recognition and probably has the best geographical reach of all firms but none. Yet, its attempts to crack the end-user (buy-side) research and advisory services (RAS) business petered out, I suppose due to poor execution and a lack of investment in sales and go-to-market.
We’ve asked IDC to come and update the IIAR members -stay tuned!
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Gartner acquires SCM World, what does it mean for AR Professionals?

Gartner has consolidated its position as the leader of the pack through its latest acquisition of SCM World, we are not sure how much Gartner paid for SCM but it is estimated to be around the £10m plus mark.

SCM World is a privately held company headquartered in London, U.K., with approximately 60 associates serving clients worldwide in Supply Chain Management. SCM World is a leading cross-industry peer network and learning community providing subscription-based research and conferences powered by the world’s most influential chief supply chain officers and senior supply chain practitioners.

Readers may recall back in 2009 Gartner bought AMR, which served supply chain management and IT professionals. Continue Reading →

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WORLD EXCLUSIVE: Gideon Gartner on the IIAR Blog!

https://i2.wp.com/about.ovum.com/technology/videos/fireside.jpg?resize=220%2C163Well, almost…. Ovum kindly gave us an exclusive for the video below.

Following Datamonitor’s re-launch of their consolidated IT research brands under the Ovum name, they have held two back to back events in London and New York: Collaborative Intelligence launch event.

The London event featured “the Patriarch” Gideon Gartner (the founder of Gartner and Giga), superstar Jonathan Yarmis (LinkedIn, ex. AMR and now with Ovum, @jyarmis) and IIAR co-founder and AR extraordinaire David Rossiter (blog, @davidrossiter, LinkedIn, firm).  The New Amsterdam event was with Carter Lusher instead of David.

[PART 1]
[youtube=http://www.youtube.com/watch?v=gX60IUKcB2k&hl=en&fs=1]

[PART 2]
[youtube=http://www.youtube.com/watch?v=LgUJAl-Enfk&hl=en_GB&fs=1&]

The “fireside chat” is on the IT analyst business, its beginnings and weaknesses in the original model bringing technology and business together over the course of the last 20 years. It contains quite a few really good thoughts provoking issues, including:

  • What’s the future of IT analyst firms?
  • Is the average age and experience of analysts decreasing?
  • Should IT analysts be paid like financial analysts, on results?
  • What should be the alternatives to Gartner?

Here are some links to the other videos:

And finally, do check Ovum’s landing page on AMR: Does the Gartnerization of AMR raise concerns about the future quality of their research?

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While Gartner goes after AMR, Forrester goes after…

Strategic Oxygen: Breathing New Life Into Your BusinessStrategic Oxygen!

While Gartner (NYSE:IT)  decided to buy out AMR and fill a coverage gap in SCM, with hindsight a strategy hinted in Cannes (well maybe?). The Gartner-AMR deal certainly has caused a bit of a stir, with over 6000 hits in the blogosphere! While I’m on that news item, I must add thatGartner will hosting tomorrow a special AR Webinar on AMR Research acquisition and that in addition of the blogs I list below (read those first: Carter’s, Bob’s and Tony’s entries before) there was a very relevant comment thread started by Merv Adrian and answered by Kate on inquiries.

Most of the respondents of our poll cited Forrester as the best “Second opinion” following this acquisition, so it’s interesting to note that while Gartner kept on its strategy to leverage its research through a deep sales coverage by investing in a key coverage area, Forrester on the other hand decided to expand its role-based research capabilities with capabilities to help IT vendors marketing more efficiently their products via buyers research, analytics, media planning, etc…

Impact for AR:

  • While Forrester do have credibility and interesting offerings for marketing professionals and other roles, their product and especially industry coverage remains inconsistent.
  • In particular, there have been some questions about replacing the recently departed (not litterally thank god) high-profile analysts such as  Ray Wang (blog, Twitter) and Jeremiah Owyang (blog, Twitter).
  • However, there are some signs that Forrester analysts may have more flexibility to resume limited coverage of industries.
  • AR professionals need to clearly identify the roles analysts write for before engaging with them, as briefing a Forrester analyst does not necessarily align with their goals if they are coverage and end user impact.

Wrap-up of the posts on the Gartner-AMR deal:

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Gartner buys AMR -what’s the impact for AR Managers and competitors?

AMR Research. Bold Ideas. Compelling Research. Pragmatic Advice.The Twitter underworld is in ebullition this afternoon and the West Coast isn’t yet awake: the consolidation mouvement in the IT Analysis Industrys keeps steamrolling, the latest one to be picked up being AMR Research -by Gartner (NYSE:IT):

@iiar: RT @Gartner_inc: Gartner enters into Agreement to Acquire AMR Research, Inc. http://bit.ly/71BFeq

Nothing on the AMR site yet, just this press release on the Gartner web site, with the following facts:

  • Price: $64m
  • AMR 2009 revenues: $40 million
  • Rationale: it’s complementary  as one would expect -“AMR Research is expected to expand Gartner’s suite of research offerings and also complement its consulting and events businesses.  Moreover, the addition of AMR Research’s experienced sales team should enhance Gartner’s ability to further penetrate the vast market opportunity for syndicated research.  The combination is also expected to drive operational efficiencies and cost savings.”
  • Product fit: “[AMR] is the market leader for research related to supply chain management, which is inextricably linked to IT and has become a central and growing issue for many organizations.  We expect the acquisition to give us immediate presence in this market and the ability to generate substantial synergies by selling AMR Research products to Gartner clients and Gartner products to AMR Research clients.  The addition of AMR Research’s team of approximately 40 research analysts and 45 sales executives should enable us to offer expanded resources to our clients and increase our opportunities for growth.”
  • Financials: the transaction is expected to be dilutive to EPS by -$0.11 to -$0.09 FY10 ; accretive to EPS by $0.01 to $0.04 in FY11.


Impact for AR Managers:

  • Positive: this will broaden the Gartner portfolio and help AMR reaching further geographically and deeper into accounts, leveraging Gartner’s infrastructure and sales
  • Negative: this will reduce negotiation levers for IT vendors as well as competition in Applications Software IT research
  • Collateral impact: a larger Gartner offering may be a threat for Forrester (NASDAQ:FORR), Ovum-Datamonitor and other IT Analysis Firms as well as an opportunity to fulfill the “alternative opinion” and possibly hire seasonned and connected AMR analysts

Tell us what you think!

AR Managers, how do you see this impacting your role?

Gartner competitors, how do you position yourselves on this?

Take our poll:


UPDATES 1/12/09:

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