On Thursday of last week, the Supply Chain Matters blog published our This Week in Supply Chain Management Tech column that featured three significant tech announcements. In this particular blog, we wanted to separately inform our readers of last week’s other significant announcement in the technology focused industry analyst and publications arena, which was announced after we published.
Global private and investment equity firm Blackstone announced that equity funds managed by Blackstone Group have entered into a definitive agreement to acquire International Data Group, Inc. (“IDG”) from Oriental Rainbow, LLC, a subsidiary of China Oceanwide Holdings Group, Co. Ltd. for an enterprise value of $1.3 billion.
Founded in 1964, IDG has been a provider of market intelligence for the technology industry, delivering proprietary insights and data for technology suppliers and buyers on every major shift in the technology market.
Readers may be aware of IDG’s tech focused content either from its owned branded publications such as CIO®, ComputerWorld®, CSO® InfoWorld®, MacWorld®, NetworkWorld®, PCWorld® and Hive®. Quantitative and qualitative top-tier industry analyst firm International Data Corporation (IDC) is an operating unit of IDG and a part of this acquisition.
In March of 2017, China Oceanwide Holdings Group Co., Ltd acquired IDG and became the controlling shareholder, with a 90 percent ownership share, of IDG’s operating businesses, including IDC and IDG Communications. Mohamad Ali has been the CEO of IDG.
According to the announcement, this new ownership will reportedly allow IDG to significantly invest in additional opportunities for ongoing growth across its technology and product portfolio, including strategic acquisitions to extend its market leadership position.
IDG and its subsidiaries have completed multiple recent acquisitions to further increase capabilities, including the purchase of Triblio, reportedly to expand its software-as-a-service (SaaS) platform and bolster abilities to support robust marketing activation programs. Last month, it acquired Metri to increase its IT pricing dataset, adding IT budget and operations benchmarking and sourcing services.
Supply Chain Matters Initial Perspective
Before stating this perspective, in full disclosure this Editor was once a Research Director for IDC Manufacturing Insights, a qualitative research arm of IDC. Thus, I have some historic perspective as well as a multi-year tenure in the industry analyst world.
To begin, it is important to focus on the Blackstone Group, the acquirer, which is currently characterized as one of the largest global investment equity firms with over $649 billion in assets under management. The private equity portfolio currently includes $112 billion invested among 95 portfolio companies, including many technology enabled companies.
The firm has other equity interests in the supply chain technology and operations area. Blackstone as a significant investor in supply chain planning technology provider Blue Yonder which was recently acquired by Panasonic. Readers following our This Week in Supply Chain Management Tech column may know that the firm is one of the largest owners of U.S. based E-commerce warehouse real estate.
The question is why would one of the globe’s largest equity firms want to invest over $1 billion in tech research?
The answer is obvious when you consider that equity investment decisions today are heavily data-driven, in the notions of technology market share, market intelligence and buyer sentiment. It is also evident by the reality that quantitative market research data, reinforced by qualitative sentiment technology consumer data, can be even further monetized across various buying and selling constituencies, not to mention that quantitative market sizing research is a highly profitable business. When tech marketing teams and tech publications have open access to such data, the attractiveness can be compelling. When portfolio companies are provided exclusive access to such data, or mandated to subscribe to such services, the recurring revenue monetization opportunities can increase.
However, this brings into question the slippery slope of what is considered or what will be considered truly independent research.
During my tenure at IDC, there was a clear delineation between the publications side of IDG content and research side of IDC. The two could not collaborate or influence and had separate divisional P&L’s.
Today, the attractiveness of tech publications has been subsumed by the broad availability of tech news and insights in the online universe. The notion of marrying the content of quantitative research, qualitative and go-to-market content strategies is compelling, but from our lens, troubling.
The other open question is whether additional acquisitions imply other industry analyst firms.
Only time will tell.
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