About two years ago I wrote this post on analyst economics. Since then Gene Hall, the CEO who came into Gartner 3 years ago, has been cleaning up operations and growing revenues nicely. As an investor I love what he has done.
But I read my former Gartner colleague Jonathan Yarmis rave about its growing "influence" - and I pause. Most CIOs I talk to have not increased spend with Gartner the last few years. Most think its research is passe.
I often see eyes roll when vendors present Gartner magic quadrants to buyers in competitive deals. Because every vendor finds one in some sector in the last few years favorable to them. In one pitch, a vendor said "we are consistently in the best performers in Gartner's benchmarks" and the CIO turned to me and whispered "So, does that mean they are 25 or 35% overpriced?"
Many CIOs think Gartner is over-priced and has not passed along its offshore and other labor efficiencies. And SG&A continues to be too high inspite of Gene's clean up.
Gartner, smartly, does not break up its revenue sources. It does not want buyer clients to ponder the conflicts it has with a large vendor revenue base. It wants its vendor base to continue to believe its buyer population is strong and vibrant. No real benefit in being transparent about revenue composition.
But if I were to hazard a guess most of the revenue growth is coming from price increases to vendors (few large buyers would pay even more of premium), and newer SME buyers, especially overseas. Does that translate to more influence? To a few vendors it probably does. To most buyers, the quality of the advice and the price for it is a better measure of influence. Not sure they would agree with Jonathan.
Jason Corsello, an industry analyst, who recently left Yankee, adds his perspective - beyond Gartner.
Brian Sommer, a former industry analyst and continuing industry influencer, adds his. And acknowldeges I am right! That has to be cached in web permanence!
