Thoughts on Informa and Datamonitor

Yesterday we had the news that Informa is to acquire Datamonitor. As Dom says, this is the “biggest industry analyst story of the year so far.”

What can we read into this purchase?

Informa is a provider of specialist information and services for a variety of academic, scientific, professional and commercial business communities. A firm like Datamonitor fits nicely into its business model.

However, I don’t think we should start to get excited about Informa suddenly becoming a significant rival to Gartner in the technology research and advisory business (at least not in the traditional manner, but more on that later*).

First, the numbers don’t stack up. Last year, Gartner had revenues of $1 billion (USD). Even without consulting, its revenue is still over $700 million.

In comparison, Informa may have revenues of over £1 billion (GBP) but technology research isn’t that big a part of its business.

In 2006, Informa’s telecoms and media products (ie its technology offering) had revenues of £64.7 million. That’s everything – events, magazines and newsletters, and research services.

Datamonitor will bring in some additional technology revenue – but its total revenue in 2006 was £70.4 million and a significant part of that isn’t from technology research.

When you start doing the sums (even allowing for the dollar / pound exchange rate), then Informa’s technology analyst business is going to be a whole smaller than Gartner’s. (Although, interestingly, it’ll be of a similar size to Forrester’s – again, exchange rates permitting).

And it's not just the money. Informa’s existing research business specialises in the telecoms and media markets. By acquiring Datamonitor (and Ovum and Butler and Computerwire), it is broadening its coverage out – but it’s still got some way to go before it can effectively compete with Gartner’s breadth and depth of coverage of the technology sector.

If Informa plans to build an analyst business of a scale to rival Gartner, then there’s a lot of growth needed. Some of that must be organic but acquisitions will have to play a part too. Think Forrester and Yankee for example, perhaps with some boutique firms thrown in to provide coverage of more specialist market niches.

But I think we need to consider whether this is Informa’s plan at all.

Both Informa and Datamonitor have successful businesses outside of technology research. There’s plenty of low-hanging fruit that can be gathered as a result of this acquisition. And most of it’s not in the technology analyst market.

* There is another side to this acquisition that potentially poses a more interesting long-term challenge to those of us in the analyst relations market. I’ve got to go out now so that will have to wait - probably tomorrow.

Informa to buy Datamonitor

So, yet more consolidation in the analyst world with the news today about Informa's planned acquisition of Datamonitor. Informa is set to pay £502 million.

You can see the announcement on both sites, Informa and Datamonitor.

The FT is reporting that "Michael Danson, chief executive of Datamonitor, will remain in post for 12 months...The future management structure will be decided over the next six months but Datamonitor will remain a standalone company and its brand will be retained."

The Telegraph has Danson saying that "the deal was principally about revenue synergies, not cost savings...most jobs at Datamonitor, aside from the finance director and a few non-executive directors, were likely to remain safe."

Thanks to Jonny.

Gideon Gartner to speak at Computer History Museum

Gideon Gartner, a pioneer of the industry analyst marketplace and founder of both Gartner and Giga, is speaking at the Computer History Museum in California later this month.

The event on Tuesday May 15 is being described as "an evening of candid and personal insights on the rise of IT industry analysts."

Gideon's conversation with venture capitalist Neill Brownstein is being recorded and will be made available on YouTube.

Event Details
Date: May 15 2007
Time: 6:30 pm - 8:00 pm
Venue: Computer History Museum, 1401 N. Shoreline Boulevard Mountain View, CA 94043

Entrance is free although there's a suggested donation of $10. Advanced registration is being strongly advised.

If you're interested, there's more information here.

Thanks to Barbara French over at Tekrati who will be writing more on this event at her blog. She has also set up a related wiki.

She's describing it as "a "don't miss" event for everyone who works with / for the industry analysts."

About the Computer History Museum
Established in 1996, the aim of the Computer History Museum aim is "to preserve and present for posterity the artifacts and stories of the information age. As such, the Museum plays a unique role in the history of the computing revolution and its worldwide impact on the human experience...It is a public benefit organization dedicated to the preservation and celebration of computing history. It is home to one of the largest collections of computing artifacts in the world, a collection comprising over 13,000 objects, 20,000 images, 5,000 moving images, 4,000 linear feet of cataloged documentation and 5,000 titles or several hundred gigabytes of software."

Forrester speaking at Institute of Industry Analyst Relations meeting

A quick heads-up. Forrester Research will be speaking at next week's IIAR (Institute of Industry Analyst Relations) meeting.

Our guest speakers are David Metcalfe, senior vice-president, research (the man who manages Forrester's research organisation in Europe) and Kevin Lucas, senior analyst (whose research interests include best practice for AR professionals).

The meeting is taking place on 17 May in London. There are still a few spaces available so if you would like to find out more, please contact me or the IIAR secretary, Hannah Kirkman (her contact details are here). There's also information on our Yahoo! group.

Previous IIAR meetings have provided incredibly valuable opportunities to meet, listen to and have discussions with senior executives at the big analyst firms.

As well as Forrester, our speakers this year have included Peter Sondergaard, senior vice-president of research for Gartner, and Tim Royston-Webb, managing director of Datamonitor's technology business).

Off-topic / A day in the life of a typical PR consultant

I just loved this post from ....the world's leading....

Read it and weep - with laughter - knowning it's true and happens to some poor soul every week of the year.

Why analyst tiering is crucial – oh, and there’s more to AR than just sales

There’s been a flurry of blog entries recently about the value of analyst tiering and how you should go about it.

Jim Zimmermann wrote about it on AnalystPerspectives.

So did Dom Pannell at ARcade and Jonny Bentwood on Technobabble 2.0. (Great to see you blogging btw Jonny).

Duncan Chapple added his thoughts over at Analyst Equity.

And of course no conversation in the AR blog world would be complete without ARmadgeddon.

It is also featuring a 'guest post' from Carter Lusher.

Me? Well, I have reasonably straightforward views about analyst tiering.

First, it's a good idea. I am continually shocked by how many PR firms seem to think that all analysts are the same and make no effort to differentiate between them (before Dom, Jonny and Marc etc jump all over me, I’m not talking about the PR firms that use dedicated AR specialists).

No company has infinite resource. They cannot possibly target every analyst in the market. It’s impractical. You have to focus your time, effort and money where it will have the biggest impact.

Targeting every analyst in the market is not just impossible, it’s also pointless. They’re not all of equal relevance or value. No one firm is ‘best of breed’ across every industry sector and vertical market.

Compare an enterprise software provider with an IT services company with a telecoms operator. They will all have different views on which firms are of most value to them.

It’s not just market sector either. It also depends on what you’re trying to achieve. The holy grail of analyst relations is to influence sales. Achieving this goal should be central to any AR programme.

But we mustn’t forget that analysts are incredibly influential in lots of other ways too. It shouldn’t just be about who’s got the most sway with the technology buyer.

Our clients also talk to analysts because they want to test out messaging or take the pulse of the market. Other times it’s because they want to support their media outreach. Sometimes it’s because they want to reach out to potential partners in the IT industry.

Increasingly, I explain to clients, prospects and colleagues that analysts are important because they “shape thinking.”

They shape the thinking of a technology buyer. That helps you sell more.

They shape the thinking of the media. That helps you achieve better press coverage – and it’s not just about the quote, it’s the whole way in which the journalist approaches the story.

They shape the thinking of product managers (and apparently Bill Gates). That means you go to market with better products and services – or at least with stronger messaging.

And what about channel partners? The City and Wall Street?

Analysts contribute to the buzz in the industry. Who’s hot and what’s not. The tech world is small. Connections count. And analysts have a lot.

So yes, tiering is important. But I don’t think there’s any real disagreement over that. What's more critical is that you review your targets and your tiering on a frequent basis.

Understanding the value and relevance of analysts is an on-going process. So is the identification of those who are most important to you.

While it would be nice to think that we can package up analyst firms in nice tidy boxes marked ‘Tier 1’, Tier 2’ etc and leave them be, it's unfortunately not that simple.

As to who are the Tier 1 players? Actually, there is no one 'right' answer. It depends on what market you’re in and what objectives you’re trying to achieve.