IDC experiences layoffs – likely more than 20 analysts affected

SageCircle has received credible intelligence that IDC has  initiated a job action resulting in analyst lay offs. We will continue to provide updates as we learn new information.

• Update: 4/17/09 11:18 am PT -Initial post. Sent request for confirmation to IDC’s press office
• Update: 4/17/09 11:22 am PT – First names added name to analyst list
• Update: 4/17/09 11:54 am PT – Reports coming in that layoffs will be significant and include both analysts and backoffice personnel
• Update 4/17/09 12:51 pm PT – Multiple reports that the layoffs will impact 80+ staff, of which 20+ are analysts
• Update 4/17/09 1:26 pm PT – Name added to the analyst list
• Update 4/17/09 2:01 pm PT – Name added to list; reports coming in that IDC is holding All-Hands meeting
• Update 4/17/09 3:22 pm PT – Two names added to list
• Update 4/20/09 5:03 am PT – Added IDC official statement
• Update 4/20/09 7:04 am PT – Added name to list
• Update 4/20/09 7:42 am PT – Added two names to list
• Update 4/20/09 9:43 am PT – Added name
• Update 4/20/09 11:50 am PT – Added four analyts to list
• Update 4/20/09 12:42 pm PT – Added name
• Update 4/20/09 1:30 pm PT — Added name
• Update 4/20/09 4:00 pm PT — Added two names
• Update 4/22/09 12:20 pm PT — Added three names
• Update 4/23/09 8:19 am PT – Added one name
• Update 4/28/09 1:57 pm PT – Added one name
• Update 5/27/09 2:17 pm PT – Added two names

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.

IDC Official Statement

In an e-mail exchange with SageCircle, IDC Corporate Communications Director Michael Shirer released the following statement:

– Due to the impact of the economic recession, IDC on April 17 reduced its U.S. staff by 82 employees, which represents 5% of IDC’s 1,650 employees worldwide.

– 26 research analyst positions were included in the reduction in employees. This research analyst decrease represents

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Don’t ignore research associates

SageCircle came across Forrester research associate Timothy DeGennaro (Twitter handle) the other day while looking for analysts to add to the Analyst Twitter Directory. 

Research associates are typically recent college graduates who assist senior analysts with their projects. Occasionally research associates will get a contributor mention (“with”) for a piece of research, but they do not have a listing and biography on the analysts page. Because the perception is that research associates only do grunt work analyst relations (AR) professionals frequently overlook their potential future influence. This could be a missed opportunity because research associates do have ambitions, such as the one DeGennaro stated on his LinkedIn page:

“…I am currently a Research Associate at Forrester Research taking on such coverage areas as PMOs, Project Portfolio Management, and PPM software solutions.

I aspire to someday (soon) own this coverage area at Forrester as an analyst. …”

It is not just future influence that could be important.  The research associates could also be working on something today that impacts your company. For example,

An update on Twitter and the industry analysts – activity grows

With industry analysts continuing to sign up for Twitter handles – we have added 67 names in last two weeks – we thought it was time to do a quick refresher on how analysts are using Twitter.

A significant example you should read is Gartner analyst Jeffrey Mann discussing why he uses Twitter in his blog post Why I Tweet. In a very short post, Jeff covers a lot of ground in terms of the value he gets from Twitter. Here is a killer extract from that post: “I have used it to test out ideas that eventually make their way into this blog or my more formal research notes.” Hmm, that says to me that any AR team that deals with Jeffrey needs to part of that conversation.  How many other analysts are doing the same thing?  Have you done an inquiry with your key analysts?

 Listed below are some tweets that we believe illustrate well the different uses of Twitter by the analysts. Each shows the value of AR teams being on Twitter and following analysts.

 EXAMPLE: Analyst discussing customer information after I tweeted a question to his comment about the customer presentations at a vendor event. This shows a quick and easy dialog finding out what sort of information the analyst prefers

 rwang0 Hearing some very industry specific and solution focused customer presentations at the Progress Software event

rwang0 @carterlusher customers who present their problem, how the tech addressed the solution, & what was the business and tech benefits are best

EXAMPLE: Journalist asking analyst about a vendor announcement. This could signal that the journalist might have a formal interview with the analyst later.

Mike Fauscette on IDC’s Software Business Solutions Group

Mike dropped by the analyst and AR meet up that SageCircle hosted on Monday, January 12, 2009 in the Silicon Valley. We asked Mike (blog, Twitter handle) to give us an update on the Software Business Solutions Group, the IDC service he heads up.

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Acquisitions of analyst firms are likely, so who would be buyers and targets?

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

So, how much money did the US Federal Government spend with analysts firms?

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.

SageCircle Technique

• 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.

Gartner

• 2008 – $23,558,453
• 2007 – $30,680,378
• 2006 – $34,544,716
• 2005 – $32,267,738

Forrester

IDC’s Mike Fauscette on his usage of social media as an analyst

Mike dropped by the analyst and AR meet up that SageCircle hosted on Monday, January 12, 2009 in the Silicon Valley. We asked Mike (blog, Twitter handle) to explain how he uses social media in his job.

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