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:
- from @bfr3nch: Gartner hosting special AR Webinar on AMR Research acquisition on Dec 3rd: http://analystnews.tekrati.com/firmnews/10500/
- Carter posted a great analysis of this event here -a must read.
The new Datamonitor/Ovum offering is very compelling. Definitely one to watch. DM seems to be a company on the up in the enterprise space – it has an exciting vision and is executing on it. Obviously it now has to deliver…
It’s a great purchase for Gartner. AMR has a similar approach and culture, and deep expertise. However, the pace of work will crank up at AMR and account management will be tricky. But I guess that’s always the case at firms bought by Gartner.
Datamonitor’s reach into tech and telecoms is still modest compared to Gartner… and the gap just widens.
Lighthouse’s take on the purchase is online here: http://bit.ly/7mTf8q
Hmmm. “The vast market opportunity for syndicated research,” Gartner calls it. Not sure we aren’t already in the long tail for that one in the IT industry. James Governor, Ray Wang and a few others have shown the way: published stuff (other than the deep primary resarch with lots of data) can be had for far less than the big guys charge these days.
A good acquisition by Gartner, as they add capabilities in industry-specific market segments like manufacturing and a number of really talented analysts. Not too much overlap; as with most acquisitions it will be interesting to see who stay and who leaves.
Will be interesting to see if the deal will have a real impact in Europe – aside from Nigel Montgomery not 100% convinced. When I think back to the impact of the Gartner/META deal the European impact was great.
The final point – very good pricing move though.
The answer to “Who’s the best alternative to Gartner?” is, “it depends on what you need.” Different analyst firms have different strengths relative to Gartner, such as Tower (financial services) or Burton (identity and access management), etc. Plus, if you’re a vendor, you may need market sizing data or strategic advice in a particular market that Gartner doesn’t cover as well as a boutique firm might.
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I’ve had the pleasure of working at DM and Gartner, and DM has a long way to go. Their true model is having a lot of Junior Analyst sit behind the desk and crunch numbers and when clients/prospects want to talk with the analysts they shy away. Bottom line is that DM/Ovum analysts can not provide the color commentary the Gartners/Forrester’s of the world can do.
Hi Greg, very interesting perspective. As an Ovum analyst coming from Datamonitor Tech legacy team I am not in the position to comment on your remarks.
However, for the sake of factual correctness I do believe that it may be useful to point out that Ovum division of Datamonitor currently includes analysts from Ovum and Butler Group legacy teams as well.
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