Guest post: To Gartner, Burton is better off dead

Dan Mahoney was the North American GM for Dataquest when Gartner bought them. When I first met Dan he was the SVP of Research, under Gideon Gartner, for Giga Information Group: a post he held for a number of years before Forrester bought them. He was then responsible for integrating those two companies, ending up as the Chief Research Officer for Forrester. Like Burton in this deal, Giga were the technical people in the integration with Forrester.

Dan participated in our webinar yesterday on the Gartner/Burton deal, and sent us these comments.

To Gartner, Burton is just better off dead. Not as much from the research that Burton published than from the “enterprise-wide” model. That is a real impact on the way that Gartner, and a lot of others, do business. Gideon revolutionized things when he implemented that type of pricing at Giga, and I have had a number of conversations with other CEOs since then that they were really hurt by it. Some of them saying that “he almost killed the industry with that”.

Here are my thoughts:

  • Burton is going to lose analysts simply based on the Gartner model of having multiple analysts covering one area. The Burton analysts are used to being the Big Dog in their area and now they will have competition. The top ones may well be able to negotiate a good deal to stay on but, over the next year, some key people will leave.
  • Gartner will be gaining some key coverage areas. That’s a key to the purchase. They also will be gaining salespeople who have good relations with certain clients who Gartner has not been able to penetrate. Those sales people will be safe, but the others, where there is overlap, will be at risk over 2010.
  • Gartner needs to say that it is “business as usual” because there are Burton clients who have bought annual contracts. That will all change by September. Forrester had said that it would keep the Giga product lines and analyst groups separate through the year, and ended up merging everything by September [ITasITis note: Gartner did the same with META Group’s valued Enterprise Architecture service when they bought META in 2005]
  • The cultural impact on the Burton people will be big and may very well be too high a hurdle for some key people. Gartner is the purchaser and is much more set in its ways than Burton. The Burton team, by the end of 2010 will be integrated into the Gartner methodologies.
  • I really don’t believe that Gartner will go “enterprise-wide” with their contracts. What they are now acquiring are additional clients within existing customers of theirs, or potentially addition customer accounts that they can sell their additional value into. “Enterprise-wide” (where one payment gives everyone in an organisation access to the firm’s research) is a dilution of their entire financial model. Gideon Gartner tried to do that with Giga and was successful there, but financially it doesn’t make sense for Gartner to change any of their financial models right now.
  • I think that the “second opinion” right now may fall on the “Google” syndrome – or social networks, rather than another analyst firm.
  • I too am disappointed that Forrester has not jumped sooner on some other firms, although their focus for growth seems now to be much more the marketing professional, and so you may see some acquisitions in that area rather than the IT area, and may be why we’re not hearing much about it.

Your clients should:

  • get very close to their favorite Burton analysts and watch what they are doing and where they are going. If they leave, then follow them. In many cases, it is the analyst that people put their trust in and good analysts will land somewhere where they can get the support to do their jobs well.
  • Heed your advice about contracts and lock in as much as they can right now. Things will change over 2010 and be totally different in 2011.

This post is also available at Analyst Equity

We will shortly publish a report of the call: unfortunately a recording is not available

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