Posted on January 26, 2009 by sagecircle
Question: A common question SageCircle has been receiving concerns the likelihood that there will be acquisitions of analyst firms during the current recession.
During a recession, companies with strong balance sheets often acquire companies with weaker financials because the purchase price has been cut. Both Gartner (cash at September 30th was $145.2 million) and Forrester (NASDAQ: FORR, cash and marketable securities at September 30th were $254 million) have a history of acquisitions. They also have dedicated M&A teams and CEOs that assure Wall Street during quarterly earnings calls that acquisitions remain a potential tactic “at the right price.” As a consequence, there is always the possibility that one or more small or mid-sized firms will be acquired by one of the two major public firms.
Who could be acquired? Almost any firm. Obviously mid-sized firms like AMR Research that have gone through recent job actions could be thought to be shoring up their finances to ride out the recession… or make themselves a more attractive acquisition target by reducing cost structure or eliminating duplicate reearch coverage.
Who could be buyers? While Forrester and Gartner have the requisite strong balance sheets and motivations, they are not the only potential buyers of analyst firms. Companies that have made analyst firm acquisitions over (more…)
Filed under: Commentary, Practitioner Question | Tagged: acquisition, AMR Research, analyst firm, analyst relations, AR, Datamonitor, Forrester, Gartner, IDC, Informa, Mastercard, TechWeb, Yankee Group | 2 Comments »
Posted on January 22, 2009 by sagecircle
Well, it was a pretty fair amount. And the lion’s share went to Gartner of course. Gartner got at least $121,000,000 in the last four years. See below for a table of spending by firm.
The information came from www.USAspending.gov, which is an interesting resource for market research. BTW, the numbers below should be considered the minimum amount the firms received in US Federal contracts because not all agencies are required to provide data. In addition, there are a few major agencies that have not submitted their 2008 numbers yet so the contract numbers could go up for all the firms in 2008. Also, there might be purchases (e.g., tickets to analyst conferences bought with credit cards and expensed) that are not associated with the firm’s DUN number. Besides the summary numbers we list below, you can also drill down to determine spending by agency and some contract details.
This is not just a fun exercise in trivia. The amount of contracts a firm has with a client can be used as an indicator for the amount of influence with that client. Using the 2007 contract amount and assuming the GAO drives a hard bargain so each Advisory seat costs $11k, Gartner could have approximately 2,700 IT manager clients inside the Federal government it is advising on technology purchasing issues. As a consequence, Gartner could be influencing tens of billions in IT spending because it has the ear of thousands of decision makers.
- AR professionals at companies that target the US Federal Government should incorporate this data into analyst list management
- AR can conduct inquiries with analysts to ask about the volume and nature of inquiries they conduct with relevant Federal agencies
- AR should communicate insights about relevant analyst Federal contracts to their sales colleagues and how to utilize these insights
Bottom Line: AR managers whose companies sell to the US Federal Government should use data from www.USAspending.gov as a data point for their analyst list ranking methodologies. Of course, analyst firms can influence the US Federal spending in ways not related to client status. However, contract status is an easily acquired, hard number that can provide valuable insights.
- 2008 – $23,558,453
- 2007 – $30,680,378
- 2006 – $34,544,716
- 2005 – $32,267,738
Filed under: Analyst industry | Tagged: analyst relations, AR, Forrester, Gartner, IDC, Yankee Group | 4 Comments »
Posted on January 16, 2009 by sagecircle
I am in complete agreement with Hill & Knowlton AR guru Dom Pannell’s post on the ARcade blog that Yankee CEO Emily Green deserves a compliment for her blog post Time for the shoemaker’s children. While the layoffs are painful, transparency can help raise the confidence of the analyst ecosystem about Yankee’s prospects.
Filed under: Analyst industry, News | Tagged: analyst relations, analysts layoffs, AR, CEO, Dom Pannell, Emily Green, layoffs, Yankee, Yankee Group | Comments Off
Posted on January 15, 2009 by sagecircle
Credible reports are coming in that Yankee Group is laying off another group of analysts. We will continue to provide updates as we learn new information.
- Update 1 – 1/15/09 8:59 am – Posted official statement from Yankee Group
- Updated 2 – 1/15/09 9:07 am – Added two analysts to list
Sent: Thu, January 15, 2009 8:50
Subject: Yankee Group update
I’ve appreciated our open dialogue over the past few months, and I wanted to update you on some company news at Yankee Group.
Emily Green just posted a blog at (more…)
Filed under: News | Tagged: analyst relations, AR, layoff, layoffs, Yankee Group | 3 Comments »
Posted on September 1, 2008 by sagecircle
Last week’s severe cutbacks at Yankee Group (see here and here) could be an indicator that the firm is simply refocusing on its prime research opportunity or it could mean it is back on the selling block. This would be the fourth change in ownership in this decade if this turns out to be true. Here is a quick timeline:
- 1970 – founded by Howard Anderson
- 1996 August – acquirer Primark ($34m)
- 2000 May – acquirer Reuters Enterprise ($72.5m)
- 2004 May – acquirer Decision Matrix Group, formed by Monitor Clipper Partners (undisclosed)
- 2005 November – acquirer Alta Communications (undisclosed)
- 2008 September – ?
A sale by Alta would not be surprising as it – like Monitor Clipper Partners – is a private equity firm that buys and sells companies as (more…)
Filed under: Analyst industry, News | Tagged: acquisition, analyst relations, AR, bought, Forrester, Gartner, IDC, Informa, Light Reading, Ovum, sell, sold, TechWeb, Yankee Group | 1 Comment »
Posted on August 28, 2008 by sagecircle
Update: 8/28/08 11:13 am PT – SageCircle has already forwarded contact information for four former Yankee analysts to analyst firms. If you are in contact with any former analysts please let them know about this free service.
SageCircle has been contacted – via Twitter - by IDC and Ovum indicating that they would be delighted to talk with former Yankee analysts about career opportunities. If interested, send your contact information to “info [at] sagecircle.com” and we will pass the information to the appropriate managers at the firms.
Filed under: Analyst industry, News | Tagged: analyst relations, analysts, AR, hiring, IDC, Jobs, telecommunications, Yankee Group, Yankee. Ovum | Comments Off
Posted on August 27, 2008 by sagecircle
Forrester and Gartner both posted double digit gains in Q2FY08 while IDC and Yankee Group are laying off analysts. What’s up?
One explanation might be the difference in client base composition of the two types of analyst firms. Forrester and especially Gartner get most of their revenues from end user clients and much less from vendors. For example, we estimate that over 70% of Gartner’s revenues come from IT managers in corporations. Contrast that with IDC where we estimate that it gets over 85% of its revenue from technology vendors. This difference is very relevant because enterprise end users don’t dramatically decrease their spending on analyst contracts during an economic downturn, they are pretty steady. Often they are using analyst information to validate and justify IT expenses. Vendors, on the other hand, dramatically change their spending on analyst contracts during economic downturns. This is because most analyst services are paid by marketing budgets, which are usually the first to be cut as an economic recession approaches.
This was the pattern during the last major tech economic downturn, 2000-2003, during the post-Y2K period and concurrent ecommerce Dot Bomb. While Gartner’s vendor business cratered during this period, its end-user business was reasonably (more…)
Filed under: Analyst industry, News | Tagged: analyst relations, analysts, AR, Coffee Talk, Forrester, Gartner, layoffs, SageCircle Coffee Talk, Yankee, Yankee Group | 8 Comments »
Posted on August 26, 2008 by sagecircle
As SageCircle receives more information about which Yankee Group analysts have been caught in this reorganization we will add them to this list.
Updated: 8/28/08 9:05 am PT - Removed Nick Spencer from list per his request. According to Mr. Spencer: “left YG some weeks ago to take a position at RIM.”
Updated: 8/27/08 6:00 pm PT – According to source, Yankee will retain only 28 analysts. According to the ARinsights’ ARchitect analyst database, Yankee had 82 analysts before this reorganization.
Updated: 8/27/08 10:57 am PT – 12 names added
Updated: 8/27/08 10:31 am PT – seven names added. Also, the overall number of layoffs is being reported at 25% of headcount, not the originally thought 10%
Updated: 8/26/08 3:14 pm PT - one name added
Sign up for the free SageCircle Coffee Talk “What to do when an analyst is laid off” on Tuesday, September 2nd, at 8:30 am US Pacific time. Register at http://www.sagecircle.com/pages/Coffee_talk.
Here is the official statement that Yankee Group provided SageCircle on 8/26/08:
“Yankee Group is making changes to better align the company for success. Known as (more…)
Filed under: Analyst industry, News | Tagged: analyst relations, analysts, Andrew Jaquith, AR, Emily Green, layoff, Yankee Group | 21 Comments »
Posted on August 26, 2008 by sagecircle
SageCircle has learned that Yankee Group has initiated a round of analyst layoffs. At this time the exact number of staff and coverage is not known, but we have heard that 10% might be the size of the action. AR teams need to hope for the best for their favorite Yankee analysts, but plan for the worst.
Of course, layoffs impact real people with families and obligations. Often AR people are genuinely friendly with the analysts they work with and this sort of news can be a shock. Unfortunately for AR professionals, analyst firm layoffs also raise important issues that need to be addressed ASAP no matter how much sympathy they feel for the analysts caught in the layoffs.
The stark reality is that an analyst firm will not admit that they have pushed critical intellectual property out the door. Because none of the major analyst firms – including Yankee – have knowledge management (more…)
Filed under: Analyst industry, News | Tagged: analyst relations, analysts, AR, Emily Green, fired, layoffs, reorg, reorganization, Yankee Group | 1 Comment »