Sunday, April 03, 2005

And then there were - well, one less than last week

And so it has happened. Gartner's acquisition of META was completed on April Fool's day. The timing seems somehow appropriate.

But why did Gartner decide to buy META? Speculation is still rife and numerous theories abound.

1. It takes a rival out of the market.
Although Gartner's long been the biggest analyst firm in the market, this does make some sense. META had a lot of sway in both the end-user and vendor communities. Take it out of the market and there's more potential business there for Gartner. After all, who else is going to come in and take it away from them? Forrester or IDC perhaps. At the moment, it's hard to see another analyst firm that's credible across all technology sectors and can provide a global insight.

Oh - and with a major rival out of the way, Gartner is free to put its prices up with little or no threat of competition.

2. META was up for sale
It is possible the whole deal is opportunistic. After all, it's not every day that a leading international analyst firm comes on the market. And who knows what might have happened if, say, Forrester had bought META instead? The combined firm would still have been less than half Gartner's size but it would have undoubtedly been a more formidable competitor.

3. Gartner wanted to strengthen its consulting business
In Europe, META had a stronger reputation for its consulting work than for its research. As Gartner's laid off so many of META's analysts and consultants, it seems an unlikely reason. Consulting is a personal business - much more so than research. You don't buy a firm for its consulting business and then get rid of all its consultants. Clients will follow them out of the door as soon as they can.

Plus Gene Hall, Gartner's CEO described the deal as representing "a significant step for Gartner in our strategy to accelerate growth in our core research business."

4. META had in-depth country expertise in Europe which Gartner would like
If Gartner wanted in-country expertise, why not buy the company which really can provide it across the world (IDC)? Perhaps because Gartner only wants to beef up its business in certain countries where it believes it is missing out of major revenue opportunities? For example, META has traditionally been strong in Germany.

5. Gartner needs more salespeople.
From the day the acquisition was announced, Hall has stressed the importance of the sales team. He emphasised it again on Friday: "Today, we significantly increased the depth and breadth of our sales coverage in the vastly underserved market for IT research by welcoming more than 100 highly-trained sales people from META - individuals who know the marketplace and our products, and who already have existing client relationships."

But there are cheaper ways of acquiring them than buying a company - like luring them away with big salaries and bonus payments.

Time will tell if this was a good move. We're going to be watching with interest to see what happens to Gartner, its services, its clients and its staff.

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