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Gartner Acquisition is Good for the Independent Analyst Firms

Gartner has acquired the Burton Group for $56 million.

The purchase is another example of how the analyst community is becoming increasingly homogeneous, dominated by a handful of firms such as Forrester and IDC. And it points to a growing debate about the value that companies can receive from analyst firms when there is little diversification in the market.

But it also points to the importance of independent firms and individuals that engaging in dialogue through blogs and other mediums.

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The Burton Group is based out of Midvale, Utah. Its speciality lies in providing in-depth advice to front-line IT professionals. The firm has 41 research analysts and 40 sales and client service associates, and self-projected 2009 revenue of $30 million.

This is Gartner’s second acquisition in the past few months. Gartner purchased AMR Research late last year.

The Future: A Hybrid Model

Analyst firms do not have the sway in the market that they once did. Bloggers are often considered analysts as they often specialize in particular fields, providing in-depth analysis for particular markets.

This is not to take anything away from the individual analysts who populate Gartner, Forrester and other groups. We depend on many of them for the insight they give on topics ranging from APIs to web-oriented architecture.

But the future of the analyst community looks more like a hybrid animal – a cross between a traditional analyst firm and an online community.

RedMonk and the Altimeter Group represent this new hybrid. Both are small, independent firms.

RedMonk, for instance, provides in-depth research into markets but they also invest heavily in their blogs, podcasts and other outlets such as the real-time, microblogging world.

The Altimeter Group also invests heavily in its community. Technobabble 2.0 recently took a look at a survey done by Jeremiah Owyang to determine the influence of his blog on the overall market. Owyang is a partner with Altimeter.

Technobabble’s Jonny Bentwood made this conclusion:

“The fact that there is any link between the blog and procurement is a massive validation point. Obviously we are taking people’s words for this and it would be excellent to have credible evidence to back this up, but this in itself is a huge factoid.”

SageCircle is a third-party service that provides clients with analysis of analyst firms. SageCircle concludes that the Gartner acquisition does provide a silver lining for independent firms:

“The implication for the analyst ecosystem is “not good.” Anytime a well-regarded mid-sized advisory firm is swallowed up by another firm it eliminates a valued second voice and opinion about the vendors and markets it covers, and decreases clients’ purchasing and negotiating options. However, for competitors like Ovum this does provide a great opportunity to establish themselves as the second – if not the first – source of advice and opinions to IT managers and other technology buyers not comfortable with having only a single source for this type of service.”

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Gartner to Acquire AMR Research for $64 Million

Gartner has acquired AMR Research for $64 million, further tightening Gartner’s grip on the analyst world. Gartner is the leading IT Research firm with annual sales of $1.28 billion.

AMR Research is a long time research and advisory services that specializes in serving supply chain management and IT professionals. It’s a far smaller operation than Gartner. Last year the firm did $40 million in revenues. The firm has 40 analysts.

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Bruce Richardson of AMR points out that Gartner is about 32 times the size of AMR with 60,000 clients inside 10,000 organizations.

What this means for Gartner is an expansion of tis research offerings. Gartner says it will also extend the company’s consulting and events business.

AMR is reaching out to its customers today, saying it will be business as usual until January 1 when “integration,” will begin in earnest. That’s according to a letter from Tony Frisca, president and CEO at AMR.

Richardson points out that benefits will come with scale. AMR will write to a much larger audience. They will have stronger global reach. They will reach into more verticals.

Richardson, who is generally viewed as AMR’s most high profile analyst, will stay with Gartner which he looks forward to in an amusing way:

“While it will be a bit odd not to have the Advanced Manufacturing Research or AMR Research logos grace my business cards and PowerPoint templates, at least I will never again be introduced as being from “American Market Research” or “ARM.” Everyone knows Gartner.”

The acquisition is expected to be completed later this month.

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