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| Gartner's continued focus on its research business is important for several reasons. Research products can be created once and distributed widely, and both its consulting and events businesses use the intellectual capital generated by Gartner research. Gartner's research helps counteract the cyclicality of its consulting businesses. Consulting operates on one-time contracts that are subject to the strength of the IT industry. Gartner's research contracts are typically multi-year, non-cancellable, and paid in advance, which makes them less prone to industry fluctuations. | Gartner's continued focus on its research business is important for several reasons. Research products can be created once and distributed widely, and both its consulting and events businesses use the intellectual capital generated by Gartner research. Gartner's research helps counteract the cyclicality of its consulting businesses. Consulting operates on one-time contracts that are subject to the strength of the IT industry. Gartner's research contracts are typically multi-year, non-cancellable, and paid in advance, which makes them less prone to industry fluctuations. | ||
| - | Gartner operates in a largely two company market with Forrester Research with Gartner maintaining a commanding 40% market share. <ref>[http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_29/ai_n25362265 Boenning and Scattergood Research]</ref> | + | Gartner and its main competitor, [[Forrester Research (FORR)]], operate in a largely two company market with Gartner maintaining a commanding 40% market share. <ref>[http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_29/ai_n25362265 Boenning and Scattergood Research]</ref> |
| == Company Overview == | == Company Overview == | ||
Revision as of 08:03, August 18, 2008
Since 2004's senior leadership change, Gartner has been focused on improving its research business. In 2007, Gartner continued this strategy with a focus on better product differentiation, a larger and enhanced salesforce, an increase in product pricing, and better client services. These efforts helped the company attain 18% growth in research revenue and 12% total revenue growth. It's consulting and events businesses grew total revenues by 6% and 7%, respectively.
Gartner's continued focus on its research business is important for several reasons. Research products can be created once and distributed widely, and both its consulting and events businesses use the intellectual capital generated by Gartner research. Gartner's research helps counteract the cyclicality of its consulting businesses. Consulting operates on one-time contracts that are subject to the strength of the IT industry. Gartner's research contracts are typically multi-year, non-cancellable, and paid in advance, which makes them less prone to industry fluctuations.
Gartner and its main competitor, Forrester Research (FORR), operate in a largely two company market with Gartner maintaining a commanding 40% market share. [2]
Contents |
Company Overview
Business and Financial Metrics
Gartner's focus on its research business growth has helped create total revenue growth of 12%, earnings per share growth of 36%, and a 40% increase in cash flow from operations for 2007. The company used this money to repay debt, reinvest in research, increase and improve its sales force, and repurchase 8.4 million shares. Gartner has repurchased 24.1 million shares since 2005. [3]
Business Segments
Gartner has three main product offerings: Research, Consulting, and Events. Gartner's main and most profitable product, Research, is the basis for their business model while Consulting and Events provides Gartner additional entry points and synergies with their clients.
Research
Gartner Research provides analysis to help CIOs and other IT professionals make strategic IT purchase, implementation, and investment decisions. Research is distributed via published reports and briefings, access to analysts, as well as peer networking and membership services. For example, Gartner Executive Programs provide CIOs direct access to Gartner analysts and member- and peer-only communities for collaboration and advice.
In 2007, Research revenue reached $673.3 million, which was a 18% or $102.1 million increase from 2006. Contract value, which represents the value attributable to all subscription-related research products, increased 18% to $725.5 million in 2007, up from $640.3 for 2006. The research client retention rate for 2007 was 82% while wallet retention reached 101%.
For more examples of the various topics covered by Gartner Research, see the following articles:
Consulting
Gartner Consulting provides consulting, measurement engagements and strategic advisory services for cost assessments, performance measurement, and quality assessments in the IT industry. Consulting revenue for 2007 reached $325.0 million, an increase of 6% or $19.8 million. Gartner actually reduced its billable account by 9%, largely due to an exit from consulting in Asia. A combination of both optimized contracts and better utilization rates drove the segment's revenue growth. Average annualized revenue per billable headcount was up 5%, and consultant utilization rates was 69% in 2007 as compared to 64% in 2006. Consulting backlog, which represents future revenues to be recognized from in-process contracts, increased 11% to $121.4 million in 2007.
Events
Gartner held 78 events in 2007, compared to 74 events in 2006. Gartner Events consist of various symposia, conferences, and exhibitions centered around IT. Gartner's most notable event circuit is Gartner their SymoposiumITxpo series. Events revenue in 2007 reached $180.8 million, an increase of 7% or $11.4 million. Gartner Events increased the number of events, attendee volume, and tickets prices in 2007.
Gartner events are also subject to fluctuations from lack of client interest. In 2007, Gartner
Key Trends and Forces
Consulting is susceptible to economic cycles
With over 57% of Gartner's business coming from the U.S. and Canada, consulting revenues are directly tied to U.S. Economic Cycles.
Favorable currency exchange rates boosted Gartner revenue in 2007
Competitors
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References
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