Ovum has been, for several years, an organisation that always seemed to be on the edge of doing great things. With a strong brand and having attracted good staff, the firm has maintained its position in the industry. Since separating from Datamonitor, the firm has recovered from some difficult years – but not without scars.
Today, Ovum is a diverse organisation. It’s smaller and more global than it was. Alongside its traditional bases in the UK and Australia, it inherited from Datamonitor’s technology practice important teams in the US and India.
However, Ovum has failed to substantially grow its market share. Indeed, the business remains smaller than it was. Now it is part of Informa Telecom and Media, Ovum is part of an organisation that’s tightly focussed on profitability. Informa plc produces a huge operating profit – an astonishing 28% – which is more than double that of Gartner and Forrester.
If Ovum had re-invested those profits, it would have been possible to substantially grow the business by retaining more of the talented, consultative analysts and salespeople it has lost, by accelerating innovation and expanding internationally.
Instead, whole teams have been lost,– just look at TechMarketView, Plum Consulting and other analyst firms.
Ovum’s attempts to internationalise have been uneven. Each country, has its own story: Korea, Hong Kong, Germany, Brazil…
A wise investor could have turned those things around. Informa would not because of the need to maintain the huge profitability needed to maintain the firm’s acquisitions and finance the firm’s debt burden (Over a billion of long-term debt). Informa is also keen to exploit is synergies with Ovum. For example, Ovum’s successful events are organised by Informa and Ovum speakers appear at its events.
However, only an external investor could have taken Ovum’s core consulting and analysis business up to the next level. There certainly have been approaches but Informa hasn’t responded to them or taken the opportunity to do the basic things you do if you want the option to sell. Indeed, the decision to move Ovum from Datamonitor into Informa Telecom and Media was a lost opportunity to make Ovum’s value more transparent. That reflects Informa’s habit, to either hold on to brands, or run them into the ground (as happened with Orbys).
Ovum failed to find a buyer because Informa thought the value Ovum created for the rest of Informa was greater than the value generated by selling Ovum (and, of course, there would be complex financial issues involved in divesting an asset, not the least debt and taxes).
In the following post, we’ll discuss the options for Ovum: either a return to a relationship-led, innovation-driven idea of growth, or to be more tied into the publishing and events paradigms of Informa.