Analysts' merger concerns users

With the looming merger of IT analyst shops, Gartner and Meta Group, some clients say they are worried about a drop in analysis quality, service levels and vendor independence.

Gartner moved to acquire Meta in late December 2004 for $US162 million, with the unanimous backing of both boards. The deal is being scrutinized by US regulators now and is widely tipped to be approved by April.

With little sign that rival firms Forrester, Frost & Sullivan or IDC will start competing local end-user consultancies, the merger will give Gartner a monopoly by default in Australia.

In the private sector some Gartner clients are voting with their feet, citing cost and relevance as reasons to cancel their accounts.

Head of IT infrastructure for Insurance Australia Group (IAG) Larry Howard told Computerworld he recently cancelled his Gartner subscription because he found better analysis and case studies from a subscription to alternative online resource, Infrastructure Executive Council (IEC).

"With Gartner [only] two or three people can access the research. It makes it difficult. With IEC the whole organization can access the information. From a technical stand, [IEC is] better focused and more pragmatic," Howard said.

"[Analyst firms] get too carried away with what the future holds - head in the clouds stuff. We are lucky if we get 10 minutes a day to do that," Howard said.

VicRoads CIO John McNally also has concerns about concentration of the independent analysis marketplace.

"I am always a bit concerned when you get a takeover that means a consolidation under one roof of independent industry advice," McNally said.

User concern is particularly high in federal government agencies, where Centrelink, HIC and the Department of Family and Community Services are understood to have concurrent contracts with both research firms.

A senior IT executive from one agency, who spoke on condition of anonymity, said agencies are worried Gartner's stranglehold will dilute the quality of analysis through lack of an alternative.

"It's not a desirable development. Having the two meant you had a wider spread of analysis. It means reduced competition," the source said.

Another federal agency IT manager warned a "lack of a second opinion" will create an "interesting situation in terms of governance for some people", adding "the threat of being able to walk away will sound a bit of hollow now".

Both managers said their greatest concerns lay in regard to advice on infrastructure.

Meta and Gartner declined to comment citing a quiet period imposed by US financial regulator the Securities and Exchanges Commission.

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