The facts point to Gartner not relying on consulting revenues

There was a recent comment to a rather old (August of last year) post. Because it is about something that we hear periodically, we decided to elevate to a full post to bring the comment and our response to everybody attention.

 The comment is from the reader who called himself “Me” and referred to the post Are the vendor-centric analyst firms heading for tough times? Will end-user centric analyst firms do fine?

 “Me, on April 20th, 2009 at 5:33 pm Said:

 From what we’ve seen, vendors are more willing to spend than end-user firms. End-user firms are retrenching, eliminating anyone but Gartner, or even their entire budget while many vendors are seeing the recession as an opportunity to gain on weaker competitors, so they are looking to research firms to help with marketing plans, strategy assessments, and the like.

 End user focused firms are having to become consultants to survive, changing from retainer-based pricing to per-project pricing because end-user companies can’t get budgetary approval for research licenses.”

 This is an interesting opinion, and one many vendor personnel – especially executives – would love to come true because it implies that advisory firms are losing their influence. Frankly this is wishful thinking because the facts do not support this position. Here are data from Gartner’s financial reports. We start with 2004 because Gene Hall was appointed CEO in August 2004 and made a number of important strategic decisions that put more emphasis on syndicated research.

  • 2004
    • research was $480m or 55% of total
    • consulting was $259m or 30% of total
  • 2005
    • research was $523m or 54% of total
    • consulting was $301m or 31% of total
  • 2006
    • research was $571m or 55% of total
    • consulting was $305m or 29% of total
  • 2007
    • research was $683m or 58% of total
    • consulting was $325m or 28% of total
  • 2008
    • research was $773m or 60% of total
    • consulting was $347m or 27% of total

2005 saw consulting’s percentage of total revenue grow to 31% but that was because of the META acquisition. META had a higher mix of Continue reading

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