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

SageCircle AR Podcast for November 3, 2009

SageCircle AR Podcast ArtworkThe AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Visit the podcast page to download the MP3 file or listen to the episodes on your computer.  Click here to subscribe to the podcast within iTunes

SCP 12: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

[00:00] Opening

[00:57] News – Forrester’s and Gartner’s 3Q 2009 Earnings Announcements

[07:41] Growing enterprise client base enhances influence and relevance

[10:40] AR-Sales Case Study – Countering a negative research 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. 

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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

Forrester Research Q3 2009 earnings call scheduled

logo-forrester.gifForrester Research, Inc. (Nasdaq: FORR)  earnings call is 11:00 a.m. Eastern time on Thursday, October 29, 2009 . The earnings call is a webcast that you can find on Forrester’s investor relations webpage. This call is coming the day before Gartner’s earnings call.

SageCircle doesn’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What we listen for are clues to how the two publicly traded analyst firms are evolving their business models and research methodologies that might impact their clients, end user or vendor, especially when it comes to contract negotiations. I also listen to gather intelligence about their end-user client bases, which provides input into determining how their influence might be changing, which can be very useful for analyst relations teams. We will publishing summaries and analysis after each call is completed.

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

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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

SageCircle AR Podcast for August 18, 2009

SageCircle AR Podcast ArtworkThe AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Click here to listen to the podcast on your computer or visit the podcast page to download the MP3 file.  Click here to subscribe to the podcast within iTunes

SCP 7: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(01:01)  News – Gartner’s 2Q 2009 Earnings

(08:57)  News – Client based percentages from Forrester’s 10Q filing

(13:46)  News – Datamonitor, Ovum and Orbys Restructuring Announcement

(17:47)  One indicator of why the industry analysts are still as relevant in the age of Continue reading

Forrester 2Q 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.”

Forrester 2Q09 client group breakdown

As the table illustrates, 40% of its revenues in the first half of 2009 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 technology, especially IT infrastructure (e.g., servers, storage, systems integration consulting, enterprise applications, et cetera).

The 29% for the TI Client Group, focused on vendors, represent analysts who primarily advise vendors –although they can advise end users through so-called courtesy views and inquiries – and thus do not have a direct impact on active sales deals. The “Other” segment, the events business, does not have an analyst team so it does not have a direct impact on active sales deals.

So does this mean less than half of Forrester’s clients are those prime IT buyers that vendors prize? Not necessarily.

The M&S Client Group, which is focused on Continue reading

Gartner Q2 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 - GartnerGartner, Inc.  (NYSE:IT) announced its Q2 2009 earnings on August 4, 2009. See the end of the blog post for a summary and link to the press release.

In general, Gartner’s results were much as expected. All statistics are year-over-year and are FX neutral unless noted. Revenues were down 16%. Events took a huge hit (down 61% or $34.2m) due to cancelation of conferences, enterprise travel freezes that cut ticket sales, and vendors cutting sponsorships. Spring Symposium is normally scheduled in Q2 so its cancelation was a major factor in the Events revenue plunge from the prior year. Consulting was down in revenues (21%). However, the Contract Optimization Service continues to be bright spot in the Consulting portfolio. Research revenue was only down 1% and Research contract value decreased 3%.

Cash was down nearly $100m from prior year mainly because Gartner paid down some long term debt. However, it still has $97m in cash and a $250m in available credit, which 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.

PricingThere was little discussion or few questions about pricing. As always, CEO Hall mentioned that Gartner is maintaining its pricing discipline. When asked by a financial analyst about price increases, Hall said that the 2009 price increase – yes Gartner did a price increase in a recession – was at the lower end of the range for price increases and that clients were fine with it. He indicated this lack of push back was due to Gartner doing a good job of communicating the value of the Gartner service so that cost is less of an issue. This is consistent with what we hear from our clients who tell us Gartner is not giving ground on pricing, even during a recession.

Client Retention and New ClientsIn Q2 client retention was 77%, continuing the typical decrease in clients during a recession. Gartner’s primary sources of non-renewals are technology vendors with the battered and consolidating financial industries also seeing fewer renewals. Forrester in its earnings call last week said non-renewals were mostly small vendors. Wallet retention was 86% reflecting spending decreases by vendors and end users who were keeping spending flat.

Gartner picked up 305 enterprise clients during the quarter. This is a very relevant number for Continue reading

Forrester Research Q2 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 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) reported its Q2 2009 earnings on July 30, 2009. See the end of the blog entry for a summary and link to the press release. 

This post is part one of two parts when it comes to an analysis of the Forrester Q2 earnings. This is because the 10-Q, which comes out within two weeks of the earnings call, has more detail than the currently available 8-K and the earnings call.

Forrester’s acquisition of JupiterResearch was made in Q3 2008 which makes Q2 year-over-year comparisons not entirely relevant for our purposes. As a consequence, we will be checking sequential quarter comparisons because they will show the trends in this downturn and be more informative for AR and research clients.

Q2 revenues were down 3% year-over-year to $61.6m, about what guidance predicted. Cash and short term investments were $239.4m, up approximately $26m year-over-year and $13.6m over Q1.

As expected, consulting (called Advisory by Forrester for financial reports) and events revenues were down which is typical during a recession. Consulting was down 8%. Forrester did not give numbers, but said Events did meet the reduced expectations in terms of revenue, overall was profitable and even saw one event, Customer Experience Forum 2009, sell out.

There was a decrease of 92 total clients from Q1 to 2,493 (150 total decline since year end 2008). Forrester stated these were mostly Continue reading

Gartner, Inc. 2Q 2009 earnings call is scheduled – will it continue to add enterprise clients?

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Gartner, Inc.  (NYSE:IT) announced that its earnings conference call will be on August 4th, Tuesday, 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 week after Forrester’s Q2 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. 

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

Forrester Research, Inc. Q2 2009 earnings call scheduled – will it continue to lose enterprise clients?

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Update 7/30/09 click here for an analysis of the Forrester earnings call.

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This earnings call should be interesting in the wake of yet more analyst firm layoffs (see TowerGroup is rightsizing for a changed landscape and Listing of analyst firms who have laid off analysts in 2009).

Forrester Research, Inc. (Nasdaq: FORR)  earnings call is 11:00 a.m. Eastern time on Thursday, July 30, 2009 . The earnings call is a webcast that you can find on Forrester’s investor relations webpage. This call is coming the week before Gartner’s earnings call.

SageCircle doesn’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What we listen for are clues to how the two publicly traded analyst firms are evolving Continue reading

SageCircle Podcast for May 19, 2009 – Big Two 1Q 09 earnings; Survey of the Analysts; Spoken Word Audit

SageCircle AR Podcast ArtworkIt is with great pleasure that we announce the launch of SageCircle’s newest free research deliverable, the SageCircle AR Community Podcast. The AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Our goals for the AR Community Podcast are two-fold. The first goal is to provide an additional venue for SageCircle research that complements our existing deliverables, whether free (e.g., SageCircle blog) or client only (e.g., the Online SageContent Library, the largest and premier repository of AR best practices and downloadable tools available in the industry). The second goal is to develop real-world podcasting skills so when our clients are considering their own podcasts we have the experience (and scar tissue) to help them start podcasting without having to re-invent the wheel. 

Click here to listen to the podcast on your computer (corrected broken link 5/26/09 1:45 pm PT) or visit the podcast page to download the MP3 file. At this time the AR podcast is not yet available for subscription on iTunes, but we hope to have the details for this ironed out by next week.

Click here to subscribe to the podcast within iTunes

SCP 1: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(00:56)  This week we start with a look at the Q1 09 earnings reports of the only two publicly held analyst firms, Gartner and Forrester. Gartner surprised us by actually growing overall revenue. Forrester did not.

(04:55)  Next we’ll discuss our new survey of the analysts on their Continue reading

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

Gartner, Inc. Q1 2009 Earnings

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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.

 Gartner, Inc. (NYSE:IT) announced its Q1 2009 earnings on May 8, 2009. See the end of the blog post for a summary and link to the press release.

In general, Gartner’s results were much as expected. All statistics are year-over-year and FX neutral unless noted. Events took a big hit (down 18%) due to cancelation of conferences, enterprise travel freezes that cut ticket sales, and vendors cutting sponsorships. Consulting was down in revenues (4%) and backlog ($86.7m 1Q09 versus $116.8m). However, Consulting modestly exceeded expectations due to popularity of the Contract Optimization Service. Research revenue grew 4% and Research contract value grew 2%. It is the Research growth that kept Gartner revenues flat rather than falling like Forrester’s.

Cash was down nearly $70m from prior year mainly because Gartner paid down some long term debt. However, it still has $70m in cash and a $250m in available credit, which should give it the necessary resources to maintain its business and conduct M&A activity. On the M&A front, CEO Gene Hall maintained the position that M&A opportunities are being constantly evaluated.

Interesting factoid: Client inquiries were up 27% in 1Q09 versus 1Q08. CEO Hall attributed that increase to enterprise clients (primarily IT managers) wanting advice on today’s tactical issues. This is consistent with our research that shows that vendors do not use client inquiry as much as they should. The implication for the vendor community is that IT managers are seeking advice on how to manage costs, which could impact ongoing sales deals and future purchasing plans.

Interesting factoid: Research reprints are approximately a $7m business for Gartner. This is why Gartner will defend its copyrights as we discussed in Vendors need to respect analyst firm copyrights.

 Pricing

As always, CEO Hall mentioned that Gartner is maintaining its pricing discipline. When pressed by two financial analysts about how competitors’ pricing initiatives are affecting Gartner’s pricing, Hall did not directly address what Continue reading

Forrester Research Q1 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 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) reported its Q1 2009 earnings on April 30, 2009. See the end of the blog entry for a summary and link to the press release. 

Q1 revenues were up 2.5% year-over-year to $56.4m, slightly above guidance. Cash and short term investments were $225.8m, up approximately $5m over Q4.

As expected, consulting and events revenues were down as is typical during a recession. Consulting was down 12%. Forrester did not give numbers, but said Events did not meet even the reduced expectations. More interesting is that the all important “deferred revenue,” which represents syndicated research contracts, was down 7%. There was also a decrease in total clients from year end 2008 by 58 to 2,585. These are relevant data points for vendors AR teams because syndicated research contracts and total clients are simple indicators of potential changes in a firm’s influence with technology buyers. The more enterprise syndicated research clients there are, the more opportunities there are for Forrester analysts to influence vendor deals. The converse is true, fewer clients means fewer IT buyers are turning to analysts for advice.

While Forrester does not break out details on its client base, CEO George Colony mentioned that the IT (information technology, aka enterprise IT managers) and TI (technology industry, aka vendors) segments were down in the quarter, offset by growth in the Marketing & Strategy area. M&S grew in part due to companies turning to Forrester for advice on how to address social media. The implication for vendor AR programs is clear – revisit your analyst lists to ensure that Forrester analysts are correctly ranked. These data points could indicate that influence in traditional IT infrastructure and enterprise applications markets is decreasing while influence in social media and Web 2.0 markets is growing.

Forrester also announced new packaging and pricing initiatives in Continue reading

Forrester Research, Inc. Q1 2009 earnings call scheduled – will its mix of clients insulate it from the recession?

logo-forrester.gifThis earnings call should be interesting in the wake of IDC’s significant layoffs (see IDC experiences layoffs – likely more than 20 analysts affected).

Forrester Research, Inc. (Nasdaq: FORR)  earnings call is 11:00 a.m. Eastern time on Thursday, April 30, 2009 . The earnings call is a webcast that you can find on Forrester’s investor relations webpage. This call is coming one week before Gartner’s earnings call.

SageCircle doesn’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What we listen for are clues to how the two publicly traded analyst firms are Continue reading

Gartner, Inc. Q1 2009 earnings call is scheduled – will enterprises still be buying services?

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Gartner, Inc.  (NYSE:IT) announced that its earnings conference call will be on May 8th 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 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 contract sales 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. 

Enterprise technology buyer purchasing patterns are important because they are an important indicator of analyst direct influence on vendor sales. If the firms have more end-user clients their influence goes up merely because they have more clients to advise as to which vendors belong on short lists, et cetera. If, on the other hand, purchases show a steady decline this could indicate a decrease in influence.

Gartner has said for 2009, research contract value will increase by 1%. While this is much smaller than Continue reading

Forrester Research Q4 and FY08 earnings – 2008 revenues up, 2009 guidance down

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) reported its Q4 and full-year 2008 earnings on February 11, 2009. See the end of the blog entry for a summary and link to the press release. 

Forrester’s prepared remarks and Q&A were similar in tone and substance to the Gartner earnings call: expected growth until the fourth quarter at which point sales weakened considerably and anticipating a very weak 2009 resulting in revenue guidance below 2008.

Q4 revenues were up 7.7% year-over-year to $62.9m. For 2008, revenues were up 13.6% year-over-year to $241m.

Cash and short term investments were $220 million, down $29 million year-over-year. This is not surprising as the July 2008 acquisition of JupiterResearch used ~ $22.4m in cash. What was interesting was that the “cash” component went from $53m to $129m. This gives Forrester great liquidly for any M&A activity and stock buybacks to keep investors reasonably satisfied.

Forrester’s 2009 guidance was for revenues of $215 m to $235 m, down 11% to 2% from 2008. Gartner’s guidance was for a decline from 2008 of 6% to 10% (f/x neutral). The two areas expected to be hit hardest for both firms were Consulting and Events with syndicated research relatively flat.

One surprising piece of news is that rather than cutting the number of events like Gartner (good bye 18 conferences), Forrester is keeping the previously announced 14 events and adding two. Part of the reason cited for not canceling events was the sunk cost would be lost. Even a reduced conference might produce a break even. Another reason is the strategic need to fill gaps for role-based events.  This positions Forrester to experience strong growth once the recession has ended. In addition, Forrester believes that the more “birds of a feature” nature of events now focused on job roles will enhance attendee traffic because participants will have more targeted content and peer interactions. Reading between the lines, this could mean some events are limping along with weak attendance. Vendor sponsors could find their sponsorships underperforming because there will be fewer attendees.

While the total number of client companies was up 175 over 2007 to 2643, the number was down Continue reading

Gartner Q4 and FY08 earnings – Research Contract and revenues up, trouble in Events

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 (NYSE:IT) announced its Q4 and full year 2008 earnings on February 5, 2009.

Update 1: 5:45 am PT – Observations based on earnings press release (see below for highlights from press release)

SageCircle was anticipating that this earnings call would be more interesting than has been the case for most of the CEO Gene Hall era. The key question is what would happen to research contract value, because this is a useful surrogate indicator of analyst influence with end users.

Gartner had a good year-over-year quarter for contract value growth, up 11% to $834.3 Million (8% growth excluding the impact of foreign exchange).

Why is net contract value increase (NCVI, the four most important letters in the alphabet to the Gartner sales team) an important indicator? If contract value goes up it likely means that Gartner is adding new end-user (usually large organization IT managers) clients. More end-user clients translate into more influence as more technology buyers now have access to Gartner advice on IT and telecommunications purchases, whether hardware, software or services.

While Gartner does not break out research contract value data between end users and vendors, SageCircle’s conversations with AR managers indicate that Continue reading

Forrester Research, Inc. Q4 and FY08 earnings call is scheduled – Acquisitions? Layoffs? Something out the ordinary?

logo-forrester.gifThis earnings call should be much more interesting than recent quarters in the wake of the recent layoffs of analysts at five firms and the cancellation of Gartner’s  Spring Symposium. So far, Forrester has not announced any layoffs, but sometimes companies regardless of size or market will announce job actions during an earnings call to show Wall Street analysts that management is taking the recession seriously. In addition, Forrester could announce an acquisition like it did at the 2Q FY08 call with the purchase of JupiterResearch.

Forrester’s earnings call is on February 11th at 8:00 a.m. PT. The earnings call is a webcast that you can find on Forrester’s investor relations webpage. This call is coming one week after Gartner’s earnings call.

I don’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What I listen for are clues to how the two publicly traded analyst firms are Continue reading

Gartner, Inc. Q4 and FY08 earnings call is scheduled – more important than usual

This earnings call should be much more interesting than recent quarters in the wake of the analyst layoffs and Spring Symposium cancelation.

Gartner is on February 5th at 10:00 a.m. ET. The earnings call is a webcast that you can find on Gartner’s investor relations webpage.

logo-gartner.gifI don’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What I listen for are clues to how the two publicly traded analyst firms are Continue reading

Forrester and Gartner – still hiring sales reps and adding clients but exhibiting differences on price increases

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-forrester.gifBoth publicly held analyst firms have reported their Q3 2008 earnings, Forrester (NASDAQ: FORR) on October 29th and Gartner (NYSE:IT) on October 30th. In general (see table), both firms did quite well in Q3, continuing the trend of the past several years of strong revenue and research contract value growth. The one problem area for Gartner is events, which is a logo-gartner.giflarger piece of its revenue mix than Forrester, which saw weakness due to vendors cutting back on conference sponsorship and enterprise IT managers cutting back on attendance due to travel cuts. Forrester got a boost in several areas by its acquisition of JupiterResearch.

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  Forrester Gartner
Revenues* 15% 9%
     
Contract Value* 15% 12%
     
Cash Flow            $40m       $56m
     
Clients
   Qtr to Qtr   174 (130**) 115
   Year to date 250 478
     
Sales Reps
   Qtr to Qtr       46 (19**) 37
   Year to date 55 68
   Total 363 875

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* = Excludes effect of foreign exchange rates

** = Jupiter contribution to whole

Sales Force – Forrester grew its sales force in Q3 by 46 reps, of which 19 came from the JupiterResearch acquisition. Forrester’s turnover in the sales force is still considered too high, a continuing problem. Starting in January 2009, Forrester’s sales force will Continue reading

Earnings calls are scheduled – Forrester on October 29th and Gartner on October 30th

logo-forrester.gifForrester is on October 29th at 11 am ET. Gartner is on October 30th at 10 am ET. Both earnings calls are webcasts that you can find on each firm’s investor relations webpage.

logo-gartner.gifI don’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What I listen for are clues to how the two publicly traded analyst firms are Continue reading

Gartner Q2 FY08 earnings call – Typical “boring” quarter with strong research contract value increase

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

logo-gartner.gifGartner (NYSE:IT) under CEO Gene Hall has been very consistent in its stated strategy and execution, which is why I use the word boring in air quotes when I talk about Gartner’s financials. However, from the points-of-view of buyers of Gartner’s services and analyst relations professionals deciding where to focus resources the results are anything but boring.

For the buyers of services, whether end users or vendors, Gartner continues to focus on increasing its average sales price. This is being accomplished through controlling discounts, continuing annual price increases and migrating clients from legacy products to Roles at a 2x price point.

For vendor AR teams, Gartner continues to expand its end user client base, both by adding new client companies and adding more seat holders within existing client companies. Research contract value – an indicator of influence – grew for the 6th straight quarter (16% year-over-year to $794.2 million) setting yet a new record. More Advisory/Role seat holders translates into more influence on vendors’ sales deals. Also, more new clients means more problems for vendor sales teams because the new clients will not be as Continue reading

Another senior departure from IDC – Donald Best, SVP Worldwide Sales and Marketing

At this point we do not know if Mr. Best’s departure (his last day is next week) is voluntary or he was asked to seek other opportunities. However, it does come on the heels of analyst and back office staff layoffs in May and the departure of head of Services research Bob Welch’s departure in July. We have from reliable sources that Mr. Best’s departure was sudden – his LinkedIn profile shows he has left IDC, but he is still listed on IDC’s management page on IDC.com.

Post-IDC, Mr. Best is launching of Two Rivers Consulting (no website).

Mr. Best had been at IDC since 1984 so his departure could be a natural transition. However, it could be a sign of something bigger. Traditionally, vendor-centric analyst firms like IDC are among the first to see revenues drop in Continue reading

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