Informa eats Ovum for breakfast: Scrambled eggs, poached or egg rolls?

It’s just been announced that 12 year Informa veteran Steve Holtham is replacing Ovum managing director Brett Azuma “with immediate effect”. The press release states that:

Most recently Steve was Group Managing Director for Informa Professional, in addition to his role as Group Digital Director of Informa Business Information (IBI). Prior to working at IBI, Steve was CMO and E-Business Director for Informa Telecoms and Media (ITM), as well as Head of the ITM Strategy and Markets Research Division.

Ian Hemming, CEO of Informa Telecoms and Media, says: “On behalf of Ovum’s executive board, I’d like to thank Brett for his work over the past nine years. He has helped grow Ovum to become a global force in the analyst industry, reinforcing its position within the top four analyst houses, culminating in Ovum’s 2012 IIAR Global Analyst of the Year Award. We wish him well for the future.”

Informa has not announced any other plans than to have Ovum operate as it has been doing previously, but it’s notable that the CEO of Informa Telecoms and Media (ITM) is the person speaking for Ovum’s executive board. On the basis of Informa’s past acquisitions, we think that Informa have concluded that Ovum cannot be sold and will now proceed to roll Ovum more tightly into ITM. We expect that Steve will report to Ian Hemming. Ovum’s financial reports are already rolled into those ITM.

We’ve a series of posts looking at Ovum’s journey. As a former Ovum analyst, I’ve benefited from speaking to people inside and outside Ovum about the firm, and I continue to welcome comments both on this blog and confidentially through my contact form. The series drills down into five topics:

1. What’s made Informa successful?
2. Why has Ovum failed to find a buyer?
3. Can Ovum survive?
4. The clash of cultures and vision
5. The future of the analyst industry.

These five points come from one key question. When Informa broke apart Datamonitor, rolling everything into its respective Informa counterpart, Ovum was the exception. The key question is: why was Ovum treated differently? I think there were three possible answers:

• 1. They thought the business had independent potential.
• 2. It wasn’t as clean a fit with the Informa model.
• 3. They thought the fit was bad and the potential low but they thought they had a chance to gain some savings, unlock some profit and sell it off.

I haven’t heard anything about interest from buyers progressing very far and perhaps that’s why we’re here: Informa feels it’s time for ‘Plan B’. Ovum has struggled to scale profitably and and in the US, and has lost people (some of whom you’d like to retain). A few Ovum customers tell us the firm has faced some challenges maintaining its respected, slightly precocious, reputation for rigourous foresight and insight (Although the firm’s survey shows more think it’s improving). Some of its customers have found insight elsewhere, most obviously with firms now filled with the Ovum diaspora (most notably IDC, Forrester, TechMarketView, CEB, Knowledge Peers, PAC, MWD Advisors and Plum Consulting, but also Analysys Mason and 451 Research.)

Informa is very “hands off” when things go well. It stresses financial and operational efficiencies, and has little appetite to be an incubator for independent brands. I think Informa just gave up on Ovum and decided integration into ITM was the most effective way of stripping out further costs and deriving more value from the assets. However, Informa isn’t an idea home for maintaining the Ovum brand: Informa has less comfortable culture from Ovum’s, more profit centred and meritocratic. Informa’s conference and training business, which uses younger and more fungible people, is key to the group’s conception of its value proposition. ITM reproduces that conception inside its own business. Appointing a former conference producer and Informa veteran as MD, rather than an analyst, is a powerful statement of intent. Azuma, in contrast, was a chief analyst at Gartner in the 1990s has had come to Ovum through a series of research roles and Ovum’s acquisition of RHK. Integrating Ovum more closely into ITM will accelerate the dynamic which is reducing Ovum’s brand difference and which will lead to the brand following the organisation in being rolled up into ITM.

What does this mean for the people? Hard-working and productive “do-ers”, motivated by money, and who don’t “rock the boat” have little to fear. Informa doesn’t have Datamonitor’s whiff of the sweatshop. Even if Informa keeps the Ovum brand, were I a traditional qualitative analyst, maybe a bit quirky or harder to manage, I’d be a bit nervous (especially on the non-telecoms side). I can’t imagine there not being headcount reductions and, of course, CVs are flying all over the place now.

We’ll look forward to hearing your comments.