The IT & Telecom Research, Reports & Services (ITTRRS) segment of the information market is sized at $3.0 billion in 2008, and is forecast to grow to $4.0 billion by 2011 with a 9.4% compound annual growth rate (CAGR) from 2008-2011.We expect to see a marginal dip in growth in 2008, down to 9.0% from 9.1% in 2007, as the markets adjust to economic turmoil.

Important Details: Outsell estimates that the IT & Telecom Research, Reports & Services (ITTRRS) segment of the information market will reach $3.0 billion in 2008, forecast to grow to $4.0 billion by 2011 with a 9.4% compound annual growth rate (CAGR) from 2008-2011. The top players include Gartner, IDC, Forrester, Informa Telecoms & Media Group, and the IT practice of Corporate Executive Board. The ITTRRS segment saw strong growth in the first half of the year with the top three public companies reporting 18.0% growth, compared to 2007 growth of 13.8%. Gartner announced to Wall Street that it has increased its 2008 revenue estimate from a 10% growth rate to a 12% growth rate. Outsell's research with the top private companies indicates that IDC has a growth rate of approximately 10% for the first half of the year. We also have feedback indicating that most firms are doing quite well and performing in line with expectations in spite of the slow economic climate.

Firms that are growing more slowly or are struggling are primarily US-centric firms selling to vendors, or companies making significant changes in their product lines, such as Yankee Group. Fourth quarter is an extremely important time for this group of companies as a high percentage (sometimes up to 40 or 50%) of their revenues come through renewals in the fourth quarter. Third quarter earnings are not out yet and we have just embarked on the busiest time of the year amongst the most uncertain economic climate we have seen in a long time. Outsell continues to be bullish and forecasts a decent growth rate of 9.0% for 2008.

Key trends include continued new product development; price increases and less discounting; increasing sales forces; and events. Factors holding the industry back are the difficulty of scaling the business given that it is based primarily on an analyst model; the marketing infrastructure is limited which makes these companies more dependent on strong sales channels; and the encroaching perception of "good enough" free research coupled with professional social networks. This year's rising stars include: ABI Research, Canalys Ltd, Info-Tech Research Group, Springboard Research, and TowerGroup.

Implications: Unlike the tech bubble in the early 2000s, this economic cycle is different for the tech industry and the ITTRRS vendors which serve them. Tech vendor spending, especially in the US, is off, which negatively impacts companies which serve the technology vendors, but creates nowhere near the turmoil we saw when the tech bubble burst. IDC, for whom this group is a primary target market, is reporting better growth abroad than in the US. We have also seen other companies take a hit: Yankee Group let go half its analysts to refocus on its new research area of connectivity. As is to be expected, the financial services firms' spending has been negatively affected as well. At the same time we are seeing unusually strong growth by ITTRRS firms that primarily serve the end user markets such as Gartner and Forrester.

Fourth quarter results will determine how the industry performs this year and it keeps us all on the edge of our seats as we wait to see how the year will actually shape up. We are bullish on the market but also know it is a cautious time for all as we end out the year. We offer more commentary on this market in our recently published Market Research and IT & Telecom Research, Reports and Services: 2008 Market Forecast and Trends Report.

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