IIAR Silicon Valley set for January 21st

Institute of Industry Analyst Relations (IIAR) cordially invites you to its 2010 kick-off meeting in Silicon Valley on Thursday, January 21, at Cisco’s headquarters in San Jose

Agenda:

  • Trends in the Analyst Ecosystem – SageCircle
  • IIAR Initiatives Update – IIAR board member Peggy O’Neill
  • Cocktails and Networking – Hosted by Cisco

Event: Institute of Industry Analyst Relations 2010 Kickoff Meeting
Date: January 21, 2010
Time: 6:00 – 8:00 pm US PT
Location: Cisco HQs in the heart of Silicon Valley

RSVP to Peggy O’Neill (peggy.oneill@analystrelations.org) for address and details by January 15.

Trends in the Analyst Ecosystem: 2010 will be a Year of Accelerating Change

 by SageCircle

2009 was a brutal but not fatal year for the IT and telecommunications industry analysts. There were widespread layoffs at the firms, but no firms imploded. Mergers and acquisitions continued to be a tool for financially strong firms, but we also saw the launch of new firms to counter any consolidation. Social media adoption by analysts grew, but it was lumpy. These and other factors provided significant challenges to the analyst relations (AR) community, itself under pressure from the recession. Unfortunately, even though the analyst ecosystem is emerging from the recession, 2010 will provide no respite for AR. In fact, AR will have to deal with accelerating change.  We expect Continue reading

Analyst Ecosystem News – Comings and goings, company news

Tip o’ the hat to the tipsters who provided us with the following tips. Most prefer to be anonymous.

 Arrivals:

Ptak, Noel & Associates – Mike Karp (email) joins Ptak, Noel covering storage and storage services.  Mike will be working out of offices in the Boston area.

Departures:

Freeform Dynamics – David Tebbutt (Twitter) covered social and environmental computing

Gartner – Jim Lundy (Twitter) covered social media has left for Saba (vendor)

Company News:

ARinsights enables users to view analyst photos on their smart phones. Using ARchitect™’s Outlook plugin, AR managers can quickly and easily create an Outlook contact that includes the analyst’s picture. This can be incredibly handy if you are Continue reading

Highly recommended – Participating in the Gartner Quarterly AR Call on January 7, 2010

The topic we hear analyst relations (AR) professionals and other vendor staff talk the most about is Gartner. There is always something brewing about the Gartnerians’ business model, research methodology, product management and policies that gets under the skin of AR pros around the globe. While there is widespread feeling in the AR community that Gartner does not listen to us, we think that a productive use of an hour is participating in the Gartner Quarterly AR Call and telling the Gartner executives exactly what is on your mind. With a variety of GVPs and VPs participating, we think that AR pros should give these executives the benefit of the doubt that they will listen to well reasoned observations with positive suggestions about how to correct the situation. To register, click here.

This particular AR community will be a little more — and a little less – interesting than most. More interesting because the focus is on the details of how AMR is going to be integrated into Gartner (click here for a round up of SageCircle posts on the AMR acquisition by Gartner). Less interesting if AMR is not relevant to your AR program or if you are not an enterprise research client of AMR.

This particular call should also prove to be interesting to enterprise (aka end user) clients of AMR Research. While the focus is on issues of interest for AR professionals, enterprise clients of AMR should be able to pick up important intelligence about what is happening with their favorite AMR analysts and that could impact contract renewal decisions.

Replay of the webinar “SageCircle Analysis of Gartner’s acquisition of AMR Research” is now available. To receive a link and password to watch a streaming version of the webinar please email “info [at] sagecircle [dot] com”. Please include your job title and company name. Agenda:

  • Basics of the deal
  • SageCircle Analysis of AMR’s and Gartner’s Motivation
  • Highlights from Gartner December 3rd AR Community Call
  • Commentary on Points from Gartner AR Community Call
  • Recommendations for Research Clients
    • Enterprise
    • Vendors
  • Recommendations for Vendor AR Teams

—- Text from Gartner’s email —-

Dear Colleague:As promised during our Continue reading

Gartner acquires AMR Research – roundup of posts

SageCircle has published a number of posts concerning the acquisition of AMR Research by Gartner, Inc. This blog post will be a convenient go-to place for a roundup of other SageCircle articles. The posts are listed in reverse chronological order.

In addition to this public information, SageCircle Advisory and Online SageContent Library received a SageFlash with deeper analysis and more recommendations. Furthermore, many clients used the event as the trigger for an inquiry with a SageCircle strategist to discuss the implication of AMR being swallowed up by Gartner.

  1. Highly recommended – Participating in the Gartner Quarterly AR Call on January 7, 2010
  2. Ovum ups the ante in campaign to recruit AMR analysts and sales representatives
  3. Analyst departures start at AMR Research
  4. Questions from the SageCircle webinar on Gartner’s acquisition of AMR Research
  5. Special offers for AMR Research’s clients, sales professionals and analysts
  6. Announcing the SageCircle free webinar on Gartner’s acquisition of AMR Research
  7. Gartner Acquiries AMR Research for $64m

Replay of the webinar “SageCircle Analysis of Gartner’s acquisition of AMR Research” is now available. To receive a link and password to watch a streaming version of the webinar please email “info [at] sagecircle [dot] com”. Please include your job title and company name. Agenda:

  • Basics of the deal
  • SageCircle Analysis of AMR’s and Gartner’s Motivation
  • Highlights from Gartner AR Community Call
  • Commentary on Points from Gartner AR Community Call
  • Recommendations for Research Clients
    • Enterprise
    • Vendors
  • Recommendations for Vendor AR Teams

What should you do if one your top ranked analyst firms is involved in a merger & acquisition event?

SageCircle is your hotline for breaking analyst newsM&A will be part of the analyst ecosystem in 2010 and beyond. Whenever there is a significant event in the analyst market, SageCircle clients receive an immediate SageFlash with analyis and recommendations on the steps research consumers and AR should do. In addition, Advisory clients can schedule a phone-based inquiry to discuss how to apply these steps to their particular situation. We can do individual calls as well as a teleconference for an enterprise’s or vendor’s entire team.
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Non-clients can quickly and easily sign up for a two-hour Advisory Hour Block for only $495. Please give SageCircle a call at 503-636-1500 if you want to discuss the implications of this layoff.

Ovum ups the ante in campaign to recruit AMR analysts and sales representatives

Tip o’ the hat to the tipsters who sent in information about this Ovum news

Updated 12/16/09 1:32 pm PT – Added photo of truck outside Gartner’s HQ

Here is the Ovum truck making the rounds around Gartner main offices on Top Gallant Road in Stamford, CT (click on the picture to enlarge). Carter’s office use to be on the second floor nearest Top Gallant Road. Carter says that this truck would be quite visible from any of the window offices.

Please read the comments below. A Guerilla Billboards staffer mentions that a member of Gartner’s legal team came out and told the driver to get lost. Interesting.

As SageCircle reported in Special offers for AMR Research’s clients, sales professionals and analysts Ovum is one of the firms that is making a play for AMR’s sales and analyst staff. This is a common tactic by competing firms immediately after the announcement of a sizeable acquisition. However, offers like these do not necessarily result in the pickup of key staff because there is little effort put into the campaign. Usually there is just an announcement on the poaching firms’ websites and maybe a few phone calls to staff at the targeted firm.

Ovum has demonstrated that it is willing to increase the stakes by actually investing in getting the attention of the staff at the targeted firm. SageCircle has received reports about the rolling billboard that Ovum put on the streets of Boston to circle the Gartner and AMR Research offices (see picture). While this technique is likely a modest expense it does demonstrate that Ovum is serious about expanding its presence in the US market where it has a relatively small presence. In addition, it is a nifty publicity stunt sure to get some notice.

This development could work to the advantage of enterprises and vendors looking to wrap up contracts before Continue reading

Analyst departures start at AMR Research

12/10/09 9:35 am PT – Initial post

SageCircle received a credible tip and subsequently confirmed that AMR Research VP Lora Cecere, who managed a team of analysts on how to drive greater value from the supply chain, is leaving AMR. At this point we do not know the circumstances, e.g., whether Lora left voluntarily or was part of a downsizing due to Gartner’s acquisition. SageCircle had received reports that Lora was one of AMR’s top producers. Lora had been at Gartner from 2000-02.

This comes in wake of the Gartner SVP of Research Peter Sondergaard’s announcement that all analysts had been given offer letters to stay with the new AMR. This could be the case of an analyst deciding not to join the new firm or AMR doing some downsizing prior to the official takeover by Gartner to spare the new owners the task of laying off analysts they said they would retain.

If you have tips about analysts who are leaving AMR Research or related research areas at Gartner, please send them to “info [at] sagecircle [dot] com” and we will confirm them before posting them.

Replay of the webinar “SageCircle Analysis of Gartner’s acquisition of AMR Research” is now available. To receive a link Continue reading

2009 the year that was in the analyst ecosystem

2009 was interesting to say the least when it came to the analyst ecosystem and the analyst relations (AR) community. Now is good time to step back and do a quick review of what happened in 2009 to prepare for looking ahead to 2010. Luckily for us, we have a lot of content to draw upon as SageCircle has become the definitive source of analyst ecosystem news and commentary. In 2009 we published over 250 blog posts with over 1,000 comments. Many of the blog posts started with information from the community, both analysts and AR, with almost all the comments coming from the community. 

People are still very interested in the analysts – SageCircle’s blog gets about 25,000 unique visitors per month, which is pretty good for such a narrowly-focused blog. However, we always get a huge spike in readership whenever there is news about the analyst firms (e.g., layoffs and M&A). News related posts are also the ones that typically get the most comments, links, and tweets. 

The recession has been brutal, but not fatal for firms – Early 2009 was very tough for analyst firms with layoffs by at least 13 firms, cancelation of events, and plummeting consulting revenues. However, unlike the last recession, there have not been any prominent firms that went out of business. We checked the SageCircle newsletters from the previous tech recession (roughly 2001-03) and every month we were reporting on the shuttering of some analyst firm. That has not been the case this time around. In addition, the second half of 2009 has seen reports of firms starting to see improved revenues and event attendance starting to recover.

Social media’s adoption by the analyst ecosystem has been expanding, but lumpy – The number of analysts and AR professionals on Twitter has more than doubled in the last year – but that does not mean that Continue reading

Questions from the SageCircle webinar on Gartner’s acquisition of AMR Research

There were many excellent questions asked at SageCircle’s webinar where we analyzed Gartner’s acquisition of AMR (click here for our original blog post). Here are a few of the questions and our answers:

 Question: Do you think that there will be an examination of this M&A event based on anti-trust considerations?

 Answer: SageCircle strategists are not lawyers so we cannot discuss the legal aspects of this particular event. It is true that Gartner is without a doubt the dominate enterprise advisory analyst firm so even the acquisition of a relatively tiny competitor – AMR is about 3% the size of Gartner – does raise questions about competition in the marketplace, pricing power, and so on.  However, even though this is a big deal in the analyst ecosystem, overall it is very small and not likely to get the attention of regulators, either in the US or Europe. Of course, some large company or coalition of companies could hire some high-powered law firm to “encourage” the anti-trust regulators to examine the deal, which has happened in other anti-trust cases in the technology marketplace. But who would lead and fund such an effort? Forrester? Unlikely as even CEO George Colony describes his firm’s relationship with Gartner as a duopoly which confers significant advantages to both firms. Maybe a firm like Datamonitor-Ovum might be interested in doing so. A vendor? Most vendors would not want to take up this task for fear of reprisal. Maybe Oracle would because Larry Ellison has gone after Gartner and specific analysts in the press in the past. So while it is not impossible for this M&A event to get the attention of regulators, we do not give it high probability that it will.

Question: Do you believe there will be healthy collaboration between Gartner and AMR analysts? Given that Gartner plans to keep the two teams separate, do you anticipate more of the silo approach as currently exists within Gartner?

Answer: It is very unlikely that there will be collaboration between the various analyst teams at Gartner and AMR. Gartner does not have a history or culture of collaboration, nor has it invested in a knowledge management and collaboration infrastructure. In addition, Gartner analysts are scattered all around the globe with many working out of their homes.  This limits the chances for “water cooler” discussions. Finally, there is the point Continue reading

Gartner Acquiries AMR Research for $64m

12/1/09 7:01 am PT – Initial post. Analysis to follow.

12/1/09 11:38 am PT – Analysis added

12/2/09 7:00 am PT – Free SageCircle webinar on acquisition

Replay of the webinar “SageCircle Analysis of Gartner’s acquisition of AMR Research” is now available. To receive a link and password to watch a streaming version of the webinar please email “info [at] sagecircle [dot] com”. Please include your job title and company name

Gartner’s acquisition of AMR Research for $64m, approximately 1.5x revenues, is interesting in that it does not seem to fit neatly into any one of these rationales: 

  1. Additive to expand research coverage, consulting, events and other services
  2. Acquire client base
  3. Acquire sales representatives
  4. Take out direct competition to improve pricing power
  5. Prevent competition from grabbing an asset that would be used against Gartner

First:

Approximately 75% of AMR’s enterprise clients were in manufacturing/supply chain which is not consistent with Gartner’s core CIO organization. Gartner CEO Gene Hall has doubled down on IT since taking over in 2004 and eliminated non-IT focused business such as Vision Events. So does this represent a change in strategy? Perhaps the Datamonitor-Ovum strategy of going after both business and IT leaders has caused Hall to modify his approach?

AMR is primarily focused on ERP/enterprise applications, manufacturing, supply chain, retail, and sourcing. While Gartner does have some overlap, it is very uneven from one area to another. While Gartner does have a manufacturing vertical, the number of analysts is small, only seven. Furthermore, Gartner does not have brand equity in the manufacturing space so acquiring AMR manufacturing assets makes sense. Gartner’s retail analysts number just six so combining those with AMR’s analysts also makes sense. However, AMR has lost one of its top retail analysts, Janet Sherlock, just this week. Sourcing is an area that is one of Gartner’s strengths with 40 analysts listed in that space. AMR’s sourcing research took a huge blow when Phil Fersht left in late September so that particular area might not be of interest to Gartner. ERP and supply chain are grouped together at Gartner with 27 analysts. While Gartner has a strong reputation in enterprise applications, including ERP, it has less of a brand in supply chain so combining AMR supply research would be logical.

AMR’s event business is tiny in comparison to Gartner’s with only two or three targeted events per year with approximately 500 to 700 attendees each. Even if Gartner wanted to expand into other types of enterprise clients, it would not have to buy AMR to launch these types of events.

Enhancing Gartner’s advisory/consulting assets might be a possible motivation. As published research becomes more and more commoditized, enterprise clients turn to analyst firms for personalized advice and targeted consulting. Gartner has kept its analyst team relatively constant at 650 even as it has more than doubled the sales force to 952 since late 2004 (according to Continue reading

Analyst Ecosystem News – People on the Move

Icon - newsTip o’ the hat to many tipsters who provide us with the following tips. Alas, they are all shy so they requested that their names not be used. 

Arrivals:

  • Forrester – Nigel Fenwick (Twitter, personal blog) covering CIO issues
  • Forrester – Augie “August” Ray (Twitter, personal blog) covering social computing
  • SynergyACG – Eve Griliches (Twitter) covering telecommunications equipment. Prior to SynergyACG Eve was a Director at IDC.

Departures:

People on the Move in the Analyst Ecosystem – Reyne Quackenbush joins Tech Mahindra

Reyne Quackenbush (Twitter handle) has joined the growing Analyst & Advisory Relations team at Tech Mahindra (website).  Reyne will lead the Analyst & Advisory Relations practice in North America. She will collaborate with Tech Mahindra’s Leader of the Global Analyst & Advisory Relations program, Rahul Basarkar, who is based in India as well as her counterpart, Ed Gyurko, who is based in the UK.  Tech Mahindra is a global systems integrator and business transformation consulting firm focused on the Telcom industry. For over two decades, Tech Mahindra has been the chosen transformation partner for wireline, wireless and broadband operators in Europe, Asia-Pacific and North America. Majority owned by Mahindra & Mahindra, one of the Top 10 industrial houses in India, in partnership with British Telecommunications plc (BT), world’s leading communications service provider, Tech Mahindra has grown rapidly to become the 5th largest software exporter in India (NASSCOM 2009) and the first largest telecom software provider from India (Voice & Data 2009).

Please join us in congratulating Reyne and wishing her great success in her new position.

Tech Mahindra

___________________________________

Are you or someone you know on the move? Please let us know Continue reading

Analyst Ecosystem News

Logo - Altimeter GroupAltimeter Group hires a head of Sales – David Stanley joins Altimeter Group as VP of Business Development and Sales.  David was formerly with ARinsights, Inc., makers of the ARchitect AR management application.  How Altimeter addressed the selling function was one of the “Keys for Success” that SageCircle listed in the [SageFlash] Expanded Altimeter Group is neither revolutionary nor evolutionary, but very interesting because it could build a strong end user base sent to Advisory clients. If Altimeter wants to expanded beyond the vendor community, the primary client market for most analyst boutiques, then it has to invest in sales in order to close enterprise business.

Logo - Henry CorporationHENRY Corporation expands beyond former IDCers – The HENRY Corporation announced that it will be representing Quocirca, the UK-based research and analysis firm.

 

Panelists at the Ovum-Datamonitor Launch Event

From left to right,

  • Jonathan Yarmis, Research Fellow, Datamonitor-Ovum
  • Gideon Gartner, CEO-founder, Gartner Group and Giga Information Systems
  • Carter Lusher, Strategist, SageCircle

The panel was on the future of the analyst industry. It was an honor for Carter to be included on such an august panel. The event was the formal launch of the new Datamonitor-Ovum.

Forrester 3Q 09 earnings part 2 – Client Group breakdown from 10-Q

logo-forrester.gifVendor AR teams find it useful to understand the size and nature of an analyst firm’s clients when they are trying to decide if that firm has direct influence on their sales. Analyst firms whose clients are primarily vendors have little direct impact on sales deals because they are not advising IT managers and other technology buyers. Those firms with a significant contract value with enterprises can have a dramatic impact on sales especially through ad hoc, phone-based inquiry (see Don’t discount the business value of analysts’ 350,000+ phone-based inquiries with end-user clients) and signature product or market research (e.g., Magic Quadrant and Wave).

In its SEC Form 10-Q, Forrester Research provided some details into its client base. While not perfectly transparent, it does provide interesting insights. The filing reports the revenue breakdown by the three Client Groups, which have their own dedicated sales and analyst teams. There is also an “Other” category which consists “primarily of sponsorships and event tickets.” The “Other” category makes the percentages fluxuate quarter-to-quarter depending on the number of events that occur in the quarter.

Table - Forr Client Breakdown Q3 2009

As the table illustrates, roughly 40% of its revenues in the first three quarters came from its IT Client Group, which SageCircle interprets as “end users” at enterprises. This is a critical community for many technology and telecommunications vendors as these are often the primary buyers of Continue reading

Analyst Ecosystem Update

Icon - newsGeneral News

Analyst Twitter Directory – On November 5 and 7, SageCircle added a total 70 analysts to the directory and changed the entries of seven.

Forrester Research has released its 10Q for 3rd Quarter 2009. There will be an analysis by SageCircle on Monday, November 9th.

People on the Move

CMS Watch – Apoorv Durga (Twitter, blog) joined covering portals and content management.

Forrester – Natalie Lambert (Twitter) departs to Continue reading

Gartner won dismissal of ZL lawsuit, but ZL can file an amended complaint

This dismissal by the judge hearing the case does not mean the issue has been settled as ZL Technologies can pursue other legal options.

Related SageCircle posts:

From the Research Magazine website: Round one goes to Gartner in libel battle

5 November 2009 | By Brian Tarran

Gartner has succeeded in dismissing a libel complaint brought by a software company angry at being described as a ‘niche’ player – though the vendor has been granted leave to file an amended complaint.

ZLTI v Gartner in logos

District Court Judge Jeremy Fogel agreed with the IT analyst’s argument that its Magic Quadrant reports and the positioning of ZL Technologies in the ‘niche’ quadrant constituted “non-actionable Continue reading

AMR Research executives gives an indication on the strength of their business

logo-amr-research.gifWith only two public companies,* Forrester and Gartner, in the advisory analyst/market research industry it is difficult to obtain details about how analyst firms are doing in this economy. Frankly, most firms will not share publicly their sales and client numbers. As a consequence, SageCircle looks for other data points about what is happening in the analyst market. 

AMR Research CEO Tony Friscia and CRO Bruce Richardson made some interesting statements about AMR’s sales in the October 30th “AMR Research’s First Thing Monday” podcast titled “SAP’s Earnings Call” (available on iTunes and AMR’s podcast webpage). While discussing the state of the ERP market, Tony said:

“…Let’s look at this through the lens of our business. I think in many ways our business is a leading indicator. When a recession is looming we see a downturn and how companies work with us. When things are getting better we tend to see ahead of the curve. Are we seeing the end of a cyclical trend? Our business in the last three months has been very, very strong. …”

Because Tony was using this point about AMR sales in the context of a broader discussion about the ups-and-downs of the enterprise software market in a recession, SageCircle interprets it as likely true and not spin to make AMR look better. Certainly AMR had a large layoff in the first week of January. In addition, Tony and Bruce were both ‘gloom gus’es during many podcasts through Continue reading

HENRY Corporation launches – Represents former senior IDC EMEA analysts

Logo - Henry CorporationHere is an interesting announcement concerning the launch of a new ICT market research and marketing services firm that brings together former senior IDC analysts who were caught in IDG’s right-sizing exercise. A few points about the HENRY Corporation:

  • Each analyst is also an independent practitioner, some with a firm name and some under their name
  • With the exception of Martin Hingley (Twitter,  blog), most of the Fellows are not active users of social media
  • With the exception of Simone de Bruin’s LinkedResearch website and to a lesser extent Hingley’s blog, none of the other Fellows have a formal web presence

SageCircle’s initial impression is that HENRY Corporation will be the marketing function as well as sales organization for this group of former IDC senior analysts. As such it will be somewhat more involved with its portfolio of analysts than Valley View Ventures, which acts simply as a sales agent for its associated analysts and boutiques.

Below is a blog post by Hingley on the launch, followed by the official announcement.

Overview from Martin Hingley, one of the original HENRY Fellows:

The Henry Corporation Brings Familiar Experts Back To Support The ITC Industry

What happens when a major market research organization off-loads most of its senior analysts in EMEA? I’m sure it does its best to run its services with newer researchers. However many industry execs will miss the quality of support, ideas and advice that they once had. In the case of my old company some familiar faces, now independent, are also as eager as ever to Continue reading

Gartner Q3 2009 earnings

This analysis does not look at areas of interest to investors, but seeks to pull out insights that are relevant to clients and prospects of the “Big Two” advisory analyst firms as well as communications and IT vendor analyst relations (AR) teams.  

logo-gartner.gifGartner, Inc. (NYSE:IT) announced its Q3 2009 earnings on October 30, 2009. See the end of this blog post for a summary and link to the press release.

In general Gartner’s results were much as expected at this point in a recession. All the key statistics were down year-over-year, but improved (i.e., less bad) quarter-to-quarter sequentially. All statistics are year-over-year and are FX neutral unless noted.

  • Overall revenues: $267.5m, down 7%.
  • Research: $187.7m, down 4%.
  • Events: $16m, down 6%.
  • Consulting: $65.7m, down 16%.

Demonstrating that a well-managed advisory analyst firm can be a cash machine, Gartner generated $55.1m in cash in Q3, only a half-million below Q3 2008. For the full year, Gartner raised its guidance on cash flow to $125m to $135m. Cash and equivalents at the end Q3 2009 was $113m, down from $141m at the end of Q3 2008. During the first nine months of 2009, Gartner primarily used cash to repay $151m in debt. Gartner retains $250m in available credit, which with the $113m in cash should give it the necessary resources to maintain its business as well as conduct M&A activity. On the M&A front, CEO Hall maintained the position that M&A opportunities are being constantly evaluated, but unlike Forrester, who mentioned it was actively evaluating potential deals, he provided no color to that remark.

Pricing

In his remarks CEO Gene Hall mentioned that Gartner’s most recent price increase was holding. Hall also said that Gartner was implementing a price increase on November 1, 2009. Yes, Gartner has been and continues to raise prices even in a recession. This can be attributed to Continue reading

Forrester Research Q3 2009 earnings call

This analysis does not look at areas of interest to investors, but seeks to pull out insights that are relevant to clients and prospects of Forrester Research, the number two advisory analyst firm, as well as communications and IT vendor analyst relations (AR) teams. 

logo-forrester.gif

This post is part one of two parts when it comes to an analysis of the Forrester Q3 earnings. This is because the 10-Q, which will come out within two weeks of the earnings call, has more detail than the currently available 8-K and the earnings call.  We will review that document when it is available. 

The key take away from Forrester’s Q3 2009 earnings announcement is that Forrester is weathering this economic downturn much better than the last recession. In that recession, Forrester saw revenues plunge ~34% and experienced a broad and deep reduction in staff. After three quarters in 2009, overall revenue is only down 3% with research revenues actually up 2%. Headcount is 960, down 8% from 2008 year end, but still 23% higher than YE2007. In addition, Forrester currently has 16 sales and 4 research openings so it is not simply reducing headcount, but selectively filling positions as well. Furthermore, CEO George Colony told the Wall Street analysts on today’s call that he plans on adding 10 to 20 sales headcount in the 4th quarter (it is not clear if this expansion includes or is incremental to the current sales job openings on the website). This contrasts with the 51% reduction in staff from YE2000 to YE2002. Finally, at the end of Q3 2009 Forrester is sitting on $280m in cash and short term investments.

Why should this matter to enterprise clients and vendor analyst relations (AR) staff? Because Forrester is not in survival mode it has not had to slash sales or research headcount. Rather it has continued to keep the client–facing staff at a level that makes retaining existing and adding new enterprise clients relatively straightforward. This means that Forrester’s ability to maintain its research agenda and marketplace influence are not being seriously imperiled as 2009 comes to a close.

For AR teams this means that there is unlikely to be disruptive analyst turnover that would negatively impact analyst lists and interactions plans. Unfortunately, there is still the likelihood that sales representatives and analysts will be hitting the vendor community hard for incremental consulting/service units engagements and Roleview seats. Vendors should realize that not buying Continue reading

Gartner, Inc. 3Q 2009 earnings call is scheduled – will it continue to add enterprise clients?

logo-gartner.gif

Gartner, Inc.  (NYSE:IT) announced that its earnings conference call will be on October 30, Friday, at 10:00 a.m. ET. The earnings call is a webcast that you can find on Gartner’s investor relations webpage. This earnings call happens the day after Forrester’s Q3 call.

This earnings call should provide critical insight into whether enterprise technology buyers are changing their advisory analyst contract purchasing behaviors. In recent recessions, IT managers (the typical tech buyer client) have, as a group, been steady in their purchases of Gartner and Forrester services (and Giga and META before they were acquired). Most of the advisory analyst firm research syndicated contract revenue volatility is due to vendors who often cut their marketing budgets steeply during recessions.  Because Gartner is not very vendor centric the earnings call information correlates closely to end user activity. So far in 2009, Gartner has added 555 $1bn+ enterprise clients:

  • 249 new enterprise clients Q1 2009
  • 305 new enterprise clients in Q2 2009

Enterprise technology buyer purchasing patterns are important because they are an important indicator of Continue reading

This not the first time that Gartner has been sued nor will it be the last

Software vendor ZL Technologies has sued Gartner, Inc. about the impact of the firm’s research on its business (see the court documents on its website). Needless to say, this has gotten the attention of twits and bloggers. Here are two example blog posts 

There are legitimate criticisms about any particular firm’s research methodology, whether a standalone piece of research or a recurring research deliverable like IDC’s market share models or Aberdeen Axis. SageCircle, vendors, and others have certainly given Gartner suggestions for improving the Magic Quadrant in private meetings, on blog posts, and in public forums like the Gartner Quarterly AR Call. And to be fair, Gartner has tweaked its methodology a little for the Magic Quadrant over the years, but probably more in response to the Forrester Wave than what they hear from the vendors.

ZLTI v Gartner in logos

There is also the issue that many technology buyers who use the Magic Quadrant as an input to decision making do not know how to Continue reading

TowerGroup acquired by Corporate Executive Board

Logo - TowerGroup10/13/09 2:25 pm – TowerGroup announces acquisition by Corporate Executive Board

Corporate Executive Board has announced that it will acquire TowerGroup from MasterCard Advisors for an undisclosed price. MasterCard Advisors, a subsidiary of MasterCard International, acquired TowerGroup in February 2004 from Reuters Enterprise. Reuters acquired TowerGroup in 1999.

Many of you might not be familiar with the Corporate Executive Board. The CEB is a research and education firm that delivers data and tools, best practice research, and peer insight to enterprise executives and professional staff. It is a public company (NASDAQ: EXBD) with revenue of $228m and net income of $18m in 1H09.  It has more than 5,100 client companies and 120,000 members. Its business model is primarily built on annual subscriptions with access to published research, inquiries with researchers, and access to peers through networking councils. So CEB sounds like an IT advisory analyst firm like Gartner in many respects. However, CEB does not research technology markets and vendors like a Gartner or IDC, rather it focuses on best practices for managing a corporate function. 

SageCircle has been briefed by TowerGroup. Our analysis is that the TowerGroup acquisition is clearly an expansion of Corporate Executive Board’s services and not a consolidation move to eliminate a competitor. This is similar to Forrester’s Giga acquisition, but different from Gartner’s grab of META which was clearly a strategic move to keep META out of Yankee Group and kill a competitor. Regardless of motivation, it is still possible that Continue reading

Insights from Forrester’s CEO presentation at an investor conference

This analysis does not look at areas of interest to investors, but seeks to pull out insights that are relevant to clients and prospects of Forrester Research, the number two advisory analyst firm, as well as communications and IT vendor analyst relations (AR) teams.

logo-forrester.gifForrester Research (NASDAQ: FORR) Chairman & CEO George Colony (Twitter, blog) and CFO Michael Doyle presented (replay available for approximately 90 days) at the William Blair & Co. Emerging Growth Stock Conference on Tuesday, October 6, 2009. Because the presentation was oriented toward investors that might not know much about Forrester, instead of the usual Wall Street analysts on quarterly earnings calls, there were some tid-bits of intelligence useful for clients and AR. 

A large number of diverse data points but spread thin: One of the advantages that a large analyst firm has is that its analysts can – not always – have access to a large number of formal and informal data points to include in research and use with end user clients during inquiries. Forrester revealed that its analysts conduct 3,500 vendor briefings, 16,800 inquiries, 250,000 consumer survey responses, and 10,000 large company survey responses.

Sounds like huge numbers, right? Actually these numbers might not seem so impressive when the average per analyst is calculated. Forrester currently lists 193 analysts, not including research associates and researchers. That means that the average number of inquiries per analyst is only 87 per year or seven (7) per month. Of course that is the average, which means that some analysts will be doing much less than the average, maybe as little as three (3) per month or less than one a week.

Calculating the number of briefings per analyst is a little trickier because a single briefing can have multiple analysts in attendance. For this discussion let’s say three analysts per briefing, which then calculates to each analyst getting about six (6) briefings per month. Again, this is not an impressive number when taking into consideration how important vendor information is for advisory analysts.

Of course, inquiry and vendor briefings are not the only sources Continue reading

Is there an acquisition coming in the analyst ecosystem?

SageCircle has been picking up signals that there is a potential announcement about the acqusition of an analyst firm by another analyst firm. This announcment could occur as early as today, Thursday, October 8th.

  • 10/8/09 9:07 am PT — Initial post
  • 10/8/09 9:53 am PT — Added section about Forrester CEO’s comments at investor conference
  • 10/8/10:37 am PT – Added section about Gartner
  • 10/8/09 11:43 am PT – Added section about IDC
  • 10/8/09 12:13 pm PT — Added section Ovum

Ovum could use more heft to take on “The Big Two”

Ovum is seriously taking a run at the big two advisory firms, Gartner and Forrester (see  Ovum-Datamonitor Restructuring: Sufficient Critical Mass to Take on the “Big Two”?). However, it still needs more analysts and sales reps to accelerate its growth in the enterprise advisory research space. Acquisitions would be a logical complement to organic hiring to quickly grow.

Don’t discount IDC as a potenial buyer in an M&A event

While IDC has had three layoffs in the last 18 months (see this post), that does not mean it could not pull off a large acquisition. There is a difference between managing costs during a recession and having the financial strength to invest in the future. Remember, IDC acquired Meridien Research in November 2002 during the last recession. IDC could certainly be looking at bulk up one of its Insights companies to compete more effectively in the end user market.

Gartner is sitting on approximately $100 million in cash

Gartner has the financial strength (approximately $100 m cash plus $250 m line of credit), dedicated M&A team and success with acquisitons to make it a logical player in any analyst ecosystem acquisition event. During each quarterly earnings call, CEO Gene Hall makes it a point to discuss M&A strategy and opportunities, though obviously not specific targets.

Could Forrester be ready to pull the trigger on a purchase?

At the William Blair & Co. Emerging Growth Stock Conference on Tuesday, October 6th, Forrester Research Chairman and CEO George F. Colony mentioned several times about Continue reading

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