Thursday, 6 April 2006

This We'll Defend

Thinking back over the last few days here at Forrester's GigaWorld conference, the most passionate conversations have been about Gartner.

Every market leader gets a hard time, and Gartner is no exception. Perhaps it's a measure of how bad things are that the troubles people complained of last year are now seen as the good old days. At the AR Council last weekend, they should have shown Jarhead.

If my account manager is like the rest, the performance of Gartner's sales function has been really affected by new policies. There's a move away from the global sales approach. I can see that Gartner has an interest in deepening its relationships with a second line of clients in organizations. Perhaps Gartner think that clients like us, who are centralizing our buying from the analysts, simply increase our power and make things harder for them. That's not our view. When our buying was fragmented, we wasted a lot of money. We used to by a lot of research, sometimes twice or three times over. We didn't have enough scale to buy more advisory seats and more time from analysts. It's only that higher quality that allows us to really show Gartner's quality inside the company. The new approach suggests that Gartner loses the ability to meet the needs of buyers outside the center if it's selling to a global buyer. As a result, it wants to break down the global sales approach.

Decentralizing sales could allow Gartner to sell directly into business units, geographies and subsiduaries. That trend will probably be strongest in enterprises, where Gartner is pushing role-based views. Gartner seems to think that the only way that most of these specialized role-based managers will be able to experience the impact of the new role-based services is if they pay themselves, and that not all central research buyers will care about the new role-based services.

Of course, decentralization will displease a lot of central research buyers. It also poses questions of how to consolidate invoices and orders globally, and of how then to target and bonus local sales staff.

All of this fits with the wider context at Gartner. John Moroney had some interesting things to say about this last month, and Duncan's post gives a flavor of John's conference call. Gartner faces high production costs in its research business and a deep challenge in sales force management. Much of the market is uncovered by Gartner's sales force, who are often remote from key, under-penetrated, market segments.

Whatever happens -- whether the sales strategy is shown to be successful or not -- it will have to be tested by Gartner and then reverted back from. After 2 or 3 years, either clients will have been convinced centrally of the value of these role-based services, or they will have been terminated. So, although the probable fate of Gartner's sales team is a partial break-up, over 3 years we expect we will see it swing back to centralization. It's the classic Gartner scenario of permanent change.

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