Datamonitor acquires Ovum

21 October 2006

Less than two years after acquiring Butler
Group
, Datamonitor has announced its intention to buy Ovum. It’s not four
months since Ovum bought Summit Strategies and while it was clear that further European
industry consolidation was in the offing, a Datamonitor/Ovum deal was not
widely expected.

The deal looks set to go ahead and while hardly conclusive at this early stage,
the consensus appears to be that the deal makes sense for Datamonitor; technology is currently not the strongest of its vertical coverage areas and the acquisition will provide an automatic boost to its IT and telecoms research capabilities. Based on the offer, Ovum shareholders stand to cash in so are unlikely to object on financial grounds.

There is some concern about the very
different cultures of the two research houses, although Datamonitor’s Chief Executive
Mike Danson emphasises the similarities in the two business models. He may be right, of course, but it only requires a visit to their respective London HQs to know that they are very different companies.

Perhaps we should ask the opinions of Fiona Glennon and Elsa Lion, both of whom worked for Datamonitor before joining Ovum – guess it’s a case of ‘welcome back to the fold‘!

It will be interesting to follow the discussions that will inevitably surround this deal (no prizes for guessing what the topic du jour wil be at the next meeting of the IIAR on November 2nd) and we may comment further on ARcade after the dust has settled. In the meantime, you can read more views on the acquisition from ARmadgeddon, from former Datamonitor analyst Dean Bubley, founder of Disruptive Wireless and from former Ovum analyst Duncan Chapple (who remains an Ovum shareholder, so he can buy the drinks!).

5 Responses to “Datamonitor acquires Ovum”

  1. David R

    It’s an interesting move – and yes, not one I was expecting either.    

    It’s a logical step if Datamonitor is looking to boost its market share in the IT and telecoms sector.  It doesn’t have a great presence there once you strip out the Butler Group and FS technology vertical offerings (I exclude Computerwire while is still more of a journalistic offering than an analyst one). Ovum enjoys a much high profile, especially in the IT services, telecoms and mobile arenas.

    And the Ovum / Butler fit is nice too.  The two firms have expertise in different market sectors so should fit together nicely with little overlap (there is some but it’s not extensive).

    I think we’re agreed on the big challenge – that’s going to be the integration of the two cultures.  Perhaps Ovum will be run as a separate entity (at least on the analyst side, in a similar way to Butler).  

    Poor integration could be a quick way to lose a big part of what Datamonitor is buying, ie the knowledge and insight and skills of the Ovum analysts.

  2. Don Jackson

    On paper, this looks like a good fit. However, several of Ovum’s top analysts have already jumped ship upon being told of Datamonitor’s plans for them. There are also many more ex-Datamonitor employees at Ovum who are there because of the way DM treats it’s staff. Expect more Ovum resignations, DM-enforced redundancies and the gradual disappearance of the Ovum brand. Great news for DM shareholders, but not for clients or staff.

  3. ARcade

    Boy, I stick my head into a spreadsheet for a couple of hours and I almost miss the biggest industry

  4. ARcade

    Credit where it’s due – my former boss David Rossiter has done a great job of detailing the recent changes

  5. SM

    I am writing this in October 2008, two years since the acquisition occurred, and I am currently working for Ovum. I believe that all your speculations above are becoming facts now; Ovum is rapidly losing its high profile Analysts, along with its brand name in the tech industry and DM is not helping, in whatever way it can.

    The business for DM, on the other hand, is not working that well too. Accenture’s recent cancellation of Ovum’s subscription showcases this. The reason that Accenture cited for canceling the subscription was major changes in Ovum’s business model.

    I fear that a day would come when Ovum would be integrated into DM’s Tech division (which is considered the most sad research segment in the tech industry) and the Ovum brand name would get completely dissolved.

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