Gartner, Inc. (NYSE:IT) announced that its earnings conference call will be on August 4th, Tuesday, at 10:00 a.m. ET. The earnings call is a webcast that you can find on Gartner’s investor relations webpage. This earnings call happens the week after Forrester’s Q2 call.
This earnings call should provide critical insight into whether enterprise technology buyers are changing their advisory analyst contract purchasing behaviors. In recent recessions, IT managers (the typical tech buyer client) have, as a group, been steady in their purchases of Gartner and Forrester services (and Giga and META before they were acquired). Most of the advisory analyst firm research syndicated contract revenue volatility is due to vendors who often cut their marketing budgets steeply during recessions. Because Gartner is not very vendor centric the earnings call information correlates closely to end user activity.
Enterprise technology buyer purchasing patterns are important because they are an important indicator of analyst direct influence on vendor sales. If the firms have more end-user clients their influence goes up merely because they have more clients to advise as to which vendors belong on short lists, et cetera. If, on the other hand, purchases show a steady decline this could indicate a decrease in influence.
Gartner has said for 2009, research contract value will increase by 1%. In its Q1 earnings call, Gartner said research contract value was up 2% and 249 enterprise clients were added. While this is much smaller than the low double digit grow of the last few years, it is significant when you consider that vendors are typically cutting their spending when contracts up for renewal. This means that there must be sufficient growth in end user sales to make up for the decrease in vendor sales.
What are less interesting data points in earning calls are what are happening with events and consulting group revenues. These are areas that typically take a hit during recessions due to enterprise travel freezes, vendors cutting marketing activities like conference sponsorships, and general postponement of consulting engagements.
SageCircle strategists do not listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What we listen for are clues to how the two publicly traded analyst firms are evolving their business models and research methodologies that might impact their clients, both end users and vendors, especially when it comes to contract negotiations. We also listen to gather intelligence about changes in their base of end-user clients. This provides input into determining how their influence might be changing, which can be very useful for analyst relations teams. We will publish summaries and analysis after each call is completed.