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Gartner Group By Billy Waldman
I n a time when technology is evolving so rapidly that a piece of equipment purchased one week could become obsolete the next, it is very difficult, if not impossible, to determine trends and inclinations in the market. Whether it is MP3 software, the latest networking issues, or just general shifts in the industry, Gartner Group (Ticker: IT) provides a consulting service around the globe in the form of newsletters, specific client studies, and now, web based analysis. A few years ago, Gartner stock had hit a pinnacle at around $40 per share. Because of a declining rate of growth, the stock has fallen sharply to around $10 per share. The fiscal 1999 numbers were just announced, and they came in slightly below analyst’s projections.The reason for Gartner Group’s decrease in price is that analysts had assumed Gartner could maintain its hefty growth rate of several years ago. While it still continues to grow, the rate of growth has slowed. While they have better products available now than ever before, it is becoming exceedingly difficult to follow the accelerating technology market for giant and small companies alike, and clients need to rely on Gartner Group for their strategic planning advice. At the recent very successful Symposium in Florida, big names such as Steve Ballmer, President of Microsoft and Michael Dell, CEO of Dell Computer, spoke to thousands of people packed into meeting and conference rooms in major hotels reserved for the event. In addition to this, Gartner Group is moving towards the Internet market with increasing speed. Within the past few weeks, the acquisition of cPulse, an Internet customer satisfaction tracking company, inserted another piece to the growing IT puzzle. This will add to the company’s budding infrastructure to handle web consulting. The surprising notion is that in an industry which is moving to the information superhighway faster than any other major trend in any industry, the web portion of Gartner only comprises a part of Gartner’s net revenue of $760 million. This shows that Gartner Group’s shift to e-business will not come quickly or easily, but the move is rapidly taking place. New leadership provided by recently appointed CEO Michael Fleisher, is focusing the company on reversing the downhill trend in its stock price in the past few years. This will not be a quick fix because it is not as if one specific problem can be analyzed and corrected. It will be a slow process that will necessitate hard work and good management skills. Will success be the result? The product is certainly there; getting the company there is the big challenge. At 12 3/8, however, there is no real doubt in this writer’s mind, I would rate Gartner a good buy, but only in the long haul. This will certainly not be a stock which goes up $80 or so in an hour. In time, as the need to understand and analyze the ever-changing, evolving, and quickening pace of technology grows, Gartner Group will be the company providing the base of knowledge that many companies and organizations will need. |
