We broke the news this week that Gartner would close its consulting business in Asia Pacific this week (the research and Japanese businesses are not affected). Now it’s official: 18 people were laid off. The story leaked out to IDG, the parent firm of IDC. Another IDG brand, Computerworld, has this to say…
75 percent of the 18 people were located in Australia.
The closure of the Sydney and Hong Kong operations follows Singapore which shut up shop about nine months ago.
Director of IT analyst relations firm Intelligen David Noble said while he doesn’t have a lot of visibility on Gartner’s consulting efforts, he is surprised at the closure.
It’s especially alarming to some that the brunt of the closure was felt down under. Some CIOs see it as an omen of Australia’s decline as an important Asia Pacific market, in the context of greater growth north of the equator — see the postscript for more.
Listening to our colleagues and clients in Asia, the close down was just an issue of ‘when’ and not ‘whether’. It was not a surprise to them, given the decline of Gartner’s consulting business elsewhere in the region. Many of Gartner’s competitors are also trying to stress the surprise of the closure — but the real surprise for them is that anyone would make a strategic choice to forego profitable work to focus on more strategic business with larger clients.
However, there is a serious case to be made that the nuances of the local consulting markets caught Gartner out: work there tends to be more tactical, at a lower price point and relies more on developing advisory relationships.
P.S. An interesting comment just came in from an seasoned and senior global analyst familiar with the issue, who makes three points.
1] Both Gartner and Ovum found that Australia is not a beachhead to Asia. It is a very small market in its own right. The serious market in Asia is in a zone from India, through Singapore and up to Japan. Offices in Australia does little or nothing.
2] In India and China there is growing interest in alternatives to Gartner. Some buyers find that Gartner reports and analysis are not truly global in nature. In the opinion of that analyst, the Magic Quadrant can boost the relative placement of US firms, and tends to underweight European firms and maginalise Asian firms. That kind of coverage reflects through to consulting sales but need not be relevant to research and advisory services. Therefore Gartner’s competitors are likely to look for expansion in Asia.