Gartner, a natural monopoly (Analyst Equity and Gartner Watch)

Duncan Chapple from LighthouseAR posted an interesting debrief of a AR meeting in coocooland on his Analyst Equity blog: Heard in a San José boardroom.

He reports that Gartner will increase prices and provides an interesting analysis of the impact for Gartner, competitors on both their pricing strategy and the analyst salaries market.

Overall, we agree with his views, as this confirms our previous analyses (Revealed: why Gartner took over META!!!): the borgs are increasingly behaving as a natural monopoly.

Two interesting side comments:

1. On the Gartner Magic Quadrant: Duncan suggests it is used for blackmail purposes. We'd say, no new news here! The fact that Gartner feels the need to re-inforce their ethics only means that the influence game is increasingly subtle and moving elsewhere.
Joe Guralnick makes a very good and disturbing point in his Gartner Watch blog: the borgs are "using MQ placements as a pressure point for vendors to divulge more financial data than is normally reported".
This is extremely unnerving and vendors should not fall into this trap: not only it would cause them to be non-SOX-compliant but it has also the potential to influence their share price. Unless of course one is bored with the job...

This said, Gartner are changing the Magic Quadrant process for the better (incorporating some of META Group's superior METAspectrum methodology and addressing common concerns) and our opinion is quite positive -but the proof is in the pudding.

2. Duncan's post also suggests that Gartner wants to "jettison some vendor business" by increasing prices. Mixed signals here, on one hand Gartner claims to be interested by vendor business while on the other hand prices are going up.

Our conclusion is that Gartner is trying to leverage research more (increasing prices at constant expenditure) and is quite unsure about which way to go with their consultancy business. As we reported before (Resistance is futile), they have slaughtered most of META Group Consulting (MGC): it was the fasted growing part of META but consulting is also a lower margin business than selling reprints.