By William Fellows
Gartner Group says it is reinventing itself to reflect industry changes that will mean, according to its own research, that by 2003 60% of IT spending will originate from business units, in other words outside of traditional IT organizations. In the fourth quarter it will introduce four new products targeted at the e-business space, supplying the same kinds of research as it does for other markets. It will also make acquisitions in the space and plans to get into the web site audience measurement market either by itself or with a partner. There was no word on whether it will go ahead to deliver IT news services from a web site.
With 9,000 clients, Gartner says it has an 85% retention rate, the highest in its sector. Its Gartner 1 research subscription service contributed $65m in the quarter. Its IT vendor direct program which enables clients to post Gartner research along with new product announcements now has 355 vendors.
Despite a healthy third quarter Gartner says it failed to meet its internal expectations and as a result will be taking a harder look at its expense structure. Going forward it will report revenue across four businesses: the advisory service, which is its key revenue stream; measurement and consulting (including Dataquest); events; and other.
Gartner yesterday reported third quarter net income up 15% at $26.4m including a $1.3m charge for a planned recapitalization plan over $22.9m on revenue which increased 19% at $185.6m compared with $160.9m. Earnings per share were $0.25. At the nine-month mark net income was up 24% at $85.3m over $68.7m on revenue which was up 16% at $547.3m compared with $473.2m. Its recapitalization plan which goes to a vote today should remove six quarters of uncertainty. US and European revenue growth was in line with expectations. Asia Pacific was down 9%.
