Anthea Stratigos – January 17, 2017
Wow! Nothing like bullish moves to set the stage for a fast-start to 2017. Gartner became the pace car for what’s ahead by announcing its $2.6 billion acquisition of CEB almost as soon as the ball had dropped on Times Square.
We were no sooner finished analyzing that big news, when D&B bought Avention for $150 million. Two big brands buying two big brands. And on the heels of Informa buying Penton late last fall, we know one thing is for sure — consolidation continues its steady march in this industry. We will see more big name deals because that’s what it takes to move the needle these days. What’s underneath these deals is value-chain extension. This has been going on for years with convergence — the integration of content and software into workflow solutions in response to the steady march of commoditization of data and basic information. Gartner is at the top end of the value chain with data-driven analyst based services (unless you believe CB Insights), but there is no denying they are the clear market share leader. They had a strong presence in the CIO office and in marketing and supply chain, but not in other key enterprise functions. CEB, who rests on c-suite relationships in all major functions, has a strong HCM practice.
From where we sit, talent expertise + functional expertise + c-suite relationships in those functions + technology depth is a fabulous recipe for success. Technology permeates just about every major function in the enterprise these days. CEBs growth had slowed and Gartner has a disciplined distribution engine. They have mostly complementary customer relationships so there is a lot of goodness in the deal because Gartner gets more scale, new markets, and avoids the “make conundrum,” which takes years if you really want to serve every major function in the enterprise. Bold move. Formidable competitor. Forrester, in our opinion, has the most to lose with this deal.
D&B moves up the value chain and buys into a platform-based offering that gives them more ability to serve B2B marketing and sales functions with more of the critical data-driven solutions they need. The deal moves D&B into an even stronger market share leadership position in this space (putting even more distance between it and No. 2 LinkedIn) and provides software enablement for its sales solutions, which we call sales acceleration. These days in this space it’s all about serving marketers and sales people farther down the funnel (closest to a sale wins!) alongside dynamic data that is platform enabled vs. static data like contact lists, which are so yesterday. D&B has a great franchise with Hoovers (though it languished a bit under prior regimes), and with Avention, it moves up and over in the space to take strong leadership on these two axes.
So, way to go industry stalwarts! Gartner & D&B, you’ve inspired big, bold moves and reaffirmed one of my central tenets: big companies get bigger in this industry. They buy the disruptors, they buy No. 2s, they buy their way into innovation that funds our industry’s R&D. One day, I asked our analysts to point to “true disruption” in the professional information industry, and the closest they found is in consumer-y sectors — news, encyclopedia’s, textbooks, music, video (poor Blockbuster). But, D&B, Pearson, Thomson Reuters, Clarivate, Cengage, UBM, Gartner, D&B … They are here and keep on keeping on. Happy New Year!