Knowledge Capital Group (KCG) has pulled a fast one on the Meta Group and Gartner by using their own analyst logic against them. The advisory firm has warned customers to be very wary of Gartner's proposed $162m buy of Meta, saying the companies have not done a good job of communicating what will happen should the acquisition go through. In short, both research firms have failed to live up to the standards they set for IT vendors, and customers should avoid them.
"[T]he analysts are frequently called upon to give their advice and recommendations when technology vendors merge or get bought," KCG said in a research note. "Vendors that tend to get relatively positive coverage from the analysts surrounding their M&A (merger and acquisition) activities are the ones that do a good job of letting the world know, up front, just how things like products, policies, current contracts and go-forward business arrangements will be adjusted and honored. . . Conversely, vendors that tend to get creamed by the analysts in M&A are the ones who make the announcement, but don‚t seem to have any real plan for migrating customers, honoring contracts and articulating a go-forward plan and vision.
"Since we here at KCG function very much like an analyst firm that analyzes analysts, we have no choice, in the Gartner acquisition of Meta, but to treat this more like the latter than the former. We reiterate our recommendation to not enter into any new, nor renew any old Meta subscription based services until both Meta and Gartner management can tell you why you should. Given what has been communicated so far, we feel that the chances of you getting what you want from the transaction and not having at least some of the value of the subscription vanish are very slim."
An analyst firm not meeting the lofty goals it sets for others? Shocking.
KCG's research note doesn't get any more optimistic. It warns that many of Meta's top analysts will likely jump ship before the deal closes, saying 50 per cent of the staff might leave. In addition, both Meta and Gartner management have failed to give any public indication of how they plan to handle overlapping clients or how they will provide Meta customers with the small-firm feel they are accustomed to, KCG said.
And that's not all.
"The behavior right now of Meta's sales force is pathetic," KCG said.
"We have seen over a dozen emails over the last three weeks from Meta sales reps to our clients, where they have tried, in vain to conduct business. We have seen denial, 'There is a good chance the acquisition won‚t go through,' we have seen obvious misstatement, 'Meta will not be merged into Gartner anytime in the foreseeable future,' (let's see Gartner management sell that one to Wall Street) and we have seen obvious desperation, 'Just sign now and we‚ll figure out the details later.' We can't believe, in our worst nightmares, that Gartner or Meta Executive management wants or needs this, but it is a serious problem."
Despite KCG's outlook, The Register has upped its feeling on the merger from "conundrum" to "market outperform apathy." Should Gartner management sign a lucrative vulture logo licensing deal, we are prepared to raise this forecast even higher to "bullish status quo." ®