Forrester Research (NASD: FORR) has acquired competitor Jupiter Research from MCG Capital for $23 million. According to the release issued by banker Jordan Edmiston Group, Jupiter, with 87 employees, had 2007 revenues of $14 million. Forrester reported $212 million in revenues last year and has more than 1,000 employees following the deal.
Jupiter will be folded into Forrester's Marketing & Strategy Client Group, which helps technology marketing and strategy professionals develop strategies for ebusiness and interactive marketing.
The IT consulting business, which had boomed during the 90's, has struggled to reinvent itself since. The industry has faced two primary challenges:
- First, much of their growth was driven by the freespending ways of the dot coms. It was the "cost of entry" for a startup to pay $50-75k per year each to Gartner, Forrester, IDC and others. While the technology market has recovered from the dot-com implosion, purse strings are managed a little more tightly and the pay-to-play business has suffered.
- At the same time, the IT analysts have lost much of the influence they once held. Alternative media like Mashable and TechCrunch have filled the space once dominated by the IT analysts; while they still play an important role in the space, they can no longer command the premium dollars they once did.
Jupiter and Forrester focus largely on strategy consulting, which is less sensitive to the competitive market changes, but a quick look at a ten-year price chart for Forrester shows the challenges they face.