Market Research - Gartner, Inc.

INC. GARTNER

An established market researcher competing against rivals like Jupiter Media Metrix and NetRatings was Gartner Inc., which employed roughly 800 consultants and served a client base of nearly 10,000 businesses, institutions, and other organizations that used outside experts for advice on decisions regarding computer hardware and software, communications devices, and other technology-related topics. The firm was founded in 1979 as Gartner Group by partners Gideon Gartner and David Stein. Its original focus was providing research and analysis of the information technology (IT) industry to buyers and sellers of computers and related devices. Six years later, the firm founded Gartner Group Securities, a unit serving the investment community with IT recommendations and information. Sales reached $40 million in 1988, and earnings exceeded $2 million.

By the early 1990s, operations spanned 20 countries, and sales exceeded $120 million. To generate capital for an acquisition spree, Gartner Group listed its shares publicly for the first time in 1994. Purchases that year included information technology (IT) system evaluator Real Decisions and IT research and analysis provider New Science. In 1995, Gartner Group bought IT market researcher Dataquest, Inc., which made a large portion of its data, including statistics, charts, and analysis, available online. The firm paid $2.5 million for project management software consultant Productivity Management Group Inc. in 1996. Gartner also purchased a 40 percent stake in Web content provider EC Cubed. The following year, the company acquired a 32 percent stake in Jupiter Communications, LLC, an online market researcher that would grow to be one of Gartner's largest competitors.

Growth via acquisition continued in 1998 as the firm worked to strengthen its position as a leading IT consultant both domestically and abroad. The firm's focus on looming Y2K problems proved problematic in 1999 as analysts began pointing to Gartner's lack of attention to the emerging e-business industry. According to an August 2001 article in The Industry Standard, "The technology market researcher had spent so much effort warning the world about the looming Y2K disaster that it seemingly missed the biggest tech story of the decade. Upstart firms Forrester Research and Jupiter Communications grabbed the spotlight—and pots of money—by advising Webstruck managers about the e-business future." As a result, the firm began funneling millions of dollars into e-business market research services. To this end, Gartner acquired INTECO Corp., a research firm focused on Internet and e-commerce technology. The company also bought a 70 percent stake in cPulse, LLC, which developed an e-business application that tracked the satisfaction level of online customers.

Gartner hired 441 new employees, including 24 e-business consultants, in the first half of 2000 as part of a $10 million employee recruitment and retention program. The firm also paid $80 million for TechRepublic, Inc., a Web site for IT professionals. Four months later, the firm launched its eMetrix service, a real-time e-business monitor that cautions IT managers and other executives if a major supply chain problem appears imminent. Despite these efforts, Gartner continued to struggle with its online operations. A Web site overhaul in January 2001 drew criticism from both industry analysts and clients when several glitches remained unresolved for months. In June, Gartner released Gartner G2, a research service designed to assist non-technology executives utilize technology already in place within their company to improve operations. This new service marked the first attempt by Gartner to target non-technology professionals. Ironically, while Gartner continued to expand into new areas, it was the firm's core research and analysis that helped it weather both the dot.com fallout and economic downtown at the turn of the century better than its rivals.