IDC merger to follow Experton, Saugatuck & CXP?

IDC Directions

Experton’s purchase by ISG, which also acquired Saugatuck, Compass and TPI, is just one more example of the ongoing analyst cycle. While mergers and acquisitions are ongoing so is the formation of new firms.

The advantages of mergers are clear. CXP Group is a good example. By combining PAC, BARC and Le CXP, the group is able to combine back office operations and win benefits ranging from sales to best practise and data management. Already, the Analyst Value Survey shows that the CXP Group firms are winning a loyal readership, especially among Gartner and Forrester clients. As users, especially on the vendor side, broaden the number of analyst firms they are using CXP Group is now one of several go-to sources of thought leadership in a few key areas big data, cloud applications, analytics and IT services. As a result, CXP Group is not only established as a European boutique:  the AVS shows that it has also gained a notable audience in Asia, and maintains a beach-head in the USA. Indeed, the Analyst Firm Awards shows that the CXP Group firms can now be counted as global players, even if that mostly reflects their position as one of the most valuable firms supporting ICT solution providers in EMEA. For them, analysts in the CXP Group is a must-have source of insight for its users, valued on a par with IDC, Ovum and Forrester.

Now several firms are rumoured to be looking at a potential purchase of IDC, most obviously Gartner and Forrester. IDC would make any analyst firm a remarkable leader. Given Gartner’s sales force, IDC could generate substantial revenues for Gartner and allow it to strip out costs from its existing research business. On paper, Forrester has stronger synergies with IDC (Forrester’s clients are more likely to buy IDC than are Gartner’s clients). It would be an important strategic purchase to buy a firm that it has little duplication with: the two firms would be a much fuller value proposition.

But the nature of IDC is that there could be many more bidders for it. The firm has a strong cash flow, and that would allow a brave buyer to leverage that and to use IDC’s own incomes to buy the firm. ISG is clearly a wildcard option. It aims to increase its research incomes dramatically, and buying IDC could be a coup de grâce against Gartner and Forrester’s dream of a duopoly in the market.

More now than ever, it’s time to read Luis Praxmarer’s guidance on what to do when your analyst firm gets purchased.

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