iSuppli (intends to) buy Screen Digest

23Jun10

The analyst market is currently in a constant state of flux with different firms struggling to find their niche. One size certainly does not fit all in this market which is why every time I see an acquisition I try and understand where this one fits.

Recently iSuppli made their intentions known that they were going to buy Screen Digest. Ben Keen (the man in charge of SD in London) spoke to be on the phone yesterday and shared with me his diplomatic answers regarding how things were going to change…

1. Jonny: How will things change? Will there be a change in analyst headcount?

Ben: Business will continue. It will be business as usual with no changes in personnel. the combined analyst count of our two companies will now be 170 (120 of those from iSuppli and 50 from ourselves).

2. Jonny: Will Screen Digest be absorbed into the iSuppli Group and all act as one name?

Ben: No, Screen Digest will be an individual business unit with the iSuppli Group. There are no plans to change or drop our brand for the foreseeable future – we have a 40 year brand history and iSuppli have no plans to change the value that this brings.

3. Jonny: What are the advantages of this merger of skills?

Ben: iSuppli have bought other firms in the past who complemented their skills such as TRG who are leaders in informatics in automobile sector. Where both Screen Digest and iSuppli have duel coverage, we will not work in silos but instead have a  very integrated team that makes most effective use of different talent and expertise.

4. Jonny: Where are the synergies?

Ben: Almost everything about this is completely complementary. Where we operate in similar sectors, it is at different but complementary ways. Screen Digest have a history of operating via a unique bottom-up granular approach. We focus on company by company, service by service, platform by platform, country by country. This adds a lot to areas that iSuppli have been tracking with very little duplication.

5. Jonny: What about client relationships – will existing clients now have relationships with both sets of analysts?

Ben: All client relationships stay the same but we do not operate the same business model that Gartner have (i.e. an ‘all you can eat’ approach). At Screen Digest people subscribe to specific product areas and buy services they want, access to the analysts that are important to them and and reports that are relevant. If they want more, they pay for the extra areas..

6. What are the geographic ramifications of this merger?

Ben: iSuppli has a strong analyst presence in North America and Asia, combined with our extensive European and US base, together we have a powerful global offering.

7. And what makes you different?

Ben: We are the analyst house with the best skill set combinations in TMT Coverage (technology, media, telecoms).

My take:

This is a smart move. Although the answers were not surprising I would be surprised if after a few years we still see multiple brands in existence and the name Screen Digest falls away.

The other thing to call out is the approach of buying by focus area which would necessitate a firm to buy multiple seats for one firm to cover their different focus areas. I am not saying this is a bad model as firms need to differentiate themselves – it is more a case of of wondering whether this approach can survive or whether market behaviour will force them to adapt.

My theory on analyst revenue models:

The diagram below is my take on the multiple revenue models of different firms. Whereas previously many companies positioned themselves firmly in the top left hand subscription model corner, the rise of ‘free research’ has forced firms to adapt their business model to stay ahead of the game. I predict that we will see more exclusivity and less convergence to one sector as the next few years progress.

image



5 Responses to “iSuppli (intends to) buy Screen Digest”

  1. Great piece, especially the analysis of the analyst business/revenue models. I’m pretty sure Ben meant “dual coverage,” not “duel coverage,” but given the analyst industry, both are probably acceptable…🙂

    I’d be passionately interested in any feedback on the business model we’re using at Focus, where all the analysts are contributing independents and research is free to users, funded by revenues from selling leads and marketing services to vendors. Feel free to check us out at http://www.focus.com and to e-mail me directly at mdortch@focus.com or reach me @DortchOnIT on Twitter to let me know what you think. Thanks!

    • That’s funny. It’s one of those typos that I should really correct in the piece but due to the humourous nature of this mistake I feel I should leave it (but with my apologies to Screen Digest and iSupply.

      Focus though (and a good deal of other firms) have made excellent businesses based on your model. I personally see a report as little more than a press release – who would buy a $1m+ solution purely based on what was written in a generic piece of research. My view is that I would want to speak to the author and get their take on my specific market with my specific problems.

      • 3 Michael Dortch

        …and that’s precisely the kind of interaction taking place dozens to hundreds of times every day at Focus, Jonny — feel free to join in anytime, and to invite all of your friends and readers! 😀
        — Michael Dortch, Focus (mdortch@focus.com, @DortchOnIT)

  2. 4 randy

    Your analyst house revenue model is missing a lot of key brands and a lot of new disruptive ones (Altimeter and Redmonk are the only ones shown). What’s the methodology? Where’s iSupply, surely you should have included them for your post? I’d argue your placement on some of these, especially the top tier, and them the quadrant definitions?

    • Hi Randy

      I undoubtedly missed a huge number of firms (by my reckoning there are over 500 analyst houses out there – indeed the graph intends to show how I see the market splitting and not necessarily a complete set. I will in a subsequent post divulge a more robust methodology to go with this thinking – this first attempt was aimed to get my idea across and not necessarily to be definitive. I will look forward to your comments when I publish a more complete version


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: