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

Why Social Media Can Represent a Real Challenge to AR Teams

icon-social-media-blue.jpgSageCircle has previously commented on the growing importance of social media in the analyst relations ecosystem and the need for teams to become engaged.  The growth in blogs and the increasing use of twitter provide a method for analysts to broadcast their opinions without the “filtering” and “editorial restrictions” that are part of standard research reports.  The lack of any review cycle by either vendors or the firms themselves allows for very timely posting, but can represent a real challenge to AR teams. 

Last week Cisco announced an acquisition that quickly prompted several divergent analyst opinions, which could also have benefited from some proofreading.

  • Van Baker posted rather negative commentary on his Gartner Blog Network blog closing with “While the purchase may be pocket change for Cisco it is still likely to be wasted money for Cisco.(sic)”  He noted his post on twitter which certainly drove traffic to the blog post.
  • Joshua Martin posted a speculative but generally positive post on his Yankee Group Blog stating “This scenario is all well and good. It will improve the value of Cisco’s devices while promoting it’s (sic) ecosystem.”
  • Mike Gotta of Burton Group posted a somewhat negative report on his personal branded blog (not Burton Group) that was later updated to a rather positive position because of a twitter comment he received. The comment was not from Cisco.
  • A day later Ted Schadler of Forrester authored a relatively positive post (and then corrected his typo) saying “It wasn’t a surprise to see networking expansionist Cisco buying Flip”

Now this is not to single out Cisco, but it was a recent example of things we have seen repeatedly.  All this blog activity was done within hours and without the filtering of the “research process” or the scrutiny of the firms’ Editorial departments.  So how should an AR team react? 

Several important best practice process steps come to mind:

  • Know the analysts in your market that use social media regularly and ensure they have the company position and key messages the moment the news breaks. These analysts, unlike their non-social media using colleagues, are likely to “shoot from the hip” in order to get something posted quickly and won’t give you a call for details. Give them the sound bites you want them to release.
  • Know the commentary the moment it occurs. Have alerts and feeds that inform you when Continue reading

UBM buys Informa who bought Datamonitor who bought Ovum who bought…

In a classic “big fish eating a smaller fish eating a smaller fish” scenario, UK-based UBM announced its plan to acquire Informa. Informa earlier acquired Datatmonitor, which had acquired Ovum and Butler. Ovum, of course, had made three rapid fire acquisitions (i.e., RHK, Summit Strategies, Orbys) of its own before Datamonitor acquired it.

These serial acquisitions are distracting to management and analysts alike so research quality and timeliness could suffer.  Also, some analysts will likely think “that’s it” and start developing a personal exit strategy. Because analysts are the core of any firm, anything that could cause them to walk could dramatically impact the relevance of the firm to your AR strategies and analyst lists. Besides the impact on analysts, this latest merger might be the last straw for sales representatives and client service personnel as well.  As a consequence, AR teams need to be proactive in ascertaining potential pitfalls and opportunities this latest industry M&A move might provide.

SageCircle Technique: Steps* to immediately take:

  • Ascertain whether any of your primary analysts might be affected
  • Schedule inquiries with key analysts to Continue reading
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