Thursday, 10 November 2005

Strategically monopolistic

Joe (Guralnick) seems to have woken up this week, as he did commit quite a few Gartner Watch posts. In Good debate on price hikes he relates a discussion with Fred Abott from Valley View Ventures on whether Gartner is a monopoly who has freedom to push its prices up. Fred seems to think Gartner is up for sale. ARmadgeddon’s long stated opinion is that Gartner is indeed increasing prices (see (Distant) Echoes from the Barcelona Symposium) and that, while we agree with Fred that their competition is diverse and morphing, Gartner with about 40-50% share is behaving as a natural monopoly. For more on this subject, see Gartner, a natural monopoly (Analyst Equity and Gartner Watch and also Revealed: why Gartner took over META!!!.
Tipping in some more kerosene, Silicon Valley Guy tipped us with the following: “In the October 27th Q3FY05 earnings call, Gartner CEO Gene Hall told the Wall Street analysts that on November 1, Gartner will be doing an across-the-board price increase of 3% to 5%.”

SVG also wrote us about the new industries research & advisory services, which he presents as a “new premium fee-based research services from its core research offering as well as the old GartnerG2 and META standard research. So what use to be included in the core syndicated research, now people have to pay additional to obtain. The premium services run from $25k to $35k. What is really outrageous is that to get access to the Industries services, a client also has to have core research seat, so the real price of Industries access is $35k to $55k depending on your discount for a core Advisory Seat.”
The information we have received so far is that the Industries RAS will be separate deliverables though very similar in form but more business issues focused. However SVG points out an interesting “improvement” over G2: the inclusion of tragic magic quadrants and Marketscopes (a dumbed down version with just a 1 to 5 rating) which of course should prompt vendors to subscribe to get what is said on them and buy reprints. We’ll reserve our judgment on Gartner Industries but based on initial conversations our expectations are low.

The logical outcome of monopolistic position is usually arrogance and fall. Research is commoditizing and Gartner has to make it more relevant to IT buyers. Unfortunately we doubt of their ability to move up the value chain to compete with BCG, system integrators and others. Finally, we know their consulting business is not getting traction (see Gartner ≠ Consulting?).
With all this in mind, it would be nice to get an update on Gartner’s strategy but it is interesting to note that the Borg hasn’t bothered to organise a meeting for the AR profession during the Cannes Symposium…

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