Gartner, Inc. · NYSE:IT
Gartner — Investor Day (February 2014)
161 slides from Gartner's investor day presentation, Feb 13, 2014
Slide 1: Brian Shipman, Group Vice President, Investor Relations
Brian Shipman Group Vice President, Investor Relations
Slide 2: Forward Looking Statements
1 Brian Shipman Group Vice President, Investor Relations This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is c
Slide 3: Agenda
Agenda Business Overview Research Events Consulting Break Sales Financial Overview Summary / Q&A. Gene Hall Peter Sondergaard Alwyn Dawkins Per Anders Waern David Godfrey Chris Lafond Gene Hall and Chris Lafond
Slide 4: Agenda
2 Agenda Business Overview Gene Hall Research Peter Sondergaard Events Alwyn Dawkins Consulting Per Anders Waern Break Sales David Godfrey Financial Overview Chris Lafond Summary / Q&A Gene Hall and Chris Lafond Why Gartner 4
Slide 5: Gartner business mix
Gartner 16% ceasing ssness ‘Noe: Percentages based cn migpoint of 201 revenue guidance. 11 % Gartner ‘Events Business Extraordinary Research Insight 13% Gartner Research Business Gartner.
Slide 6: Gartner Research
3 Gartner Note: Percentages based on midpoint of 2014 revenue guidance. 5 Gartner Research • Contract Value • Revenue • Earnings • EBITDA • Cash Flow 6
Slide 7: A Vast, Untapped Market Opportunity
A Vast, Untapped Market Opportunity i) Other RS) Supply Chain IQ clos IT Functional Leaders [PP it professionals $1.4 Billion Market Gartner CV Opportunity 2013 Gartner.
Slide 8: A Vast, Untapped Market Opportunity
4 A Vast, Untapped Market Opportunity Consistent, double-digit growth Other* 8 Supply Chain 4 CIOs 5 IT Functional Leaders 18 Front-line IT Professionals 12 $47 Billion $1.4 Billion Market Opportunity Gartner CV 2013 Source: Gartner internal estimates * digital marketing, technology, professional se
Slide 9: Performance Driven Leadership Team
Performance Driven Leadership Team ‘Avg Tenure at Gartner Avg Tenure in Role Nationality Source of Leadership tee iy 2 . Promotion 29% 7% . Gartner.
Slide 10: Performance Driven Leadership Team
5 Performance Driven Leadership Team Tenure World-Class Talent Global Avg Tenure at Gartner 14 years Avg Tenure in Role 7 years External 29% Acquisition 14% Promotion 57% Nationality Source of Leadership US Non-US 9 12%
Slide 11: Contract Value, EBITDA, EPS, Free Cash Flow
Contract Value EPS from Continuing Operations, Normalized EBITDA Free Cash Flow * Gartner.
Slide 12: Ten-year growth track record
6 Contract Value 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Normalized EBITDA 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 EPS from Continuing Operations 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Free Cash Flow 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 12% 14% 35% 23% 11
Slide 13: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 14: Why Gartner – Peter Sondergaard, Research
7 Why Gartner 13 Senior Vice President, Research Peter Sondergaard
Slide 15: Today's Roadmap
Today’s Roadmap Accelerating Impact of Technology Unparalleled Value of Gartner Research Innov Products Gartner.
Slide 16: Today's Roadmap
8 Today’s Roadmap Accelerating Impact of Technology Unparalleled Value of Gartner Research Innovative Products 15
Slide 17: Slide 17
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Slide 19: 2020 2017 2018 2019 = 2021
2020 2017 2018 2019 = 2021
Slide 20: Business Process, Business Model, Business Moment
10 Business Process Business Model Business Moment
Slide 21: Business Moment
| | , Business Moment | | TRANSIENT Soni EXPLOITED DYNAMICALLY
Slide 22: Business Moment
11 Business Moment TRANSIENT OPPORTUNITIES EXPLOITED DYNAMICALLY
Slide 23: 2013 2017 iz 2012 2nd 2015 2016 2018
2013 2017 iz 2012 2nd 2015 2016 2018
Slide 24: Digitalization, Suppliers, Information
12 Digitalization Suppliers Information
Slide 25: Digitalization
ll digitalization cr r | Unprecedented combinations of new technologies generating | revenue and value. E
Slide 26: Digitalization predictions
13 Unprecedented combinations of new technologies generating revenue and value. digitalization By 2017, 10% of computers will be learning rather than processing
Slide 27: Gartner Predicts
Gartner PREDICTS A a = By 2024, at least 10% of activities potentially injurious to human life will use a mandated | “smart system” -_ . oa —
Slide 28: Smart system and smart machine predictions
14 By 2024, at least 10% of activities potentially injurious to human life will use a mandated “smart system” By 2020, 1 in 3 knowledge workers will be replaced by enterprise owned smart machines they trained
Slide 29: Virtual
VIRTUAL
Slide 30: Many Markets Will Be Created in this $1.9T
15 Many Markets Will Be Created in this $1.9T
Slide 31: Internet of Things: Economic Value Add 2020
Internet of Things: Economic Value Add...2020 Other 4% ‘Communi 9% ‘Source: Gartner
Slide 32: Internet of Things: Economic Value Add 2020
Internet of Things: Economic Value Add...2020 Other 4% Communications 3% Agriculture 4% Fal Estate & Business Services 4% rear Ublitis 5% 18% ‘Transportation 6% cee, 1% Banking & Securities 10%
Slide 33: Internet of Things: Economic Value Add 2020
Internet of Things: Economic Value Add...2020 Other 4% Communications 3% Agriculture 4% ee Utilities 5% 1% aa Source: Gartner
Slide 34: S55 Ai i, VT,
S55 Ai i, VT, oa ie > ng fe 7 y - eu My
Slide 35: Worldwide IT Spending
Worldwide IT Spending 4 Datacenter ™ = i ‘ | 1 Telecom oO TRULIONS. 2013 2015 2017
Slide 36: Internet of Things: Technology Market Revenues
2011 Internet of Things: Technology Market Revenues 2021 2022
Slide 37: Slide 37
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Slide 39: New Leadership Roles
New Leadership Roles % OF COMPANIES HIRING FOR ROLES 2012: 6% 2012: 6% CHIEF DIGITAL OFFICER CHIEF DATA OFFICER
Slide 40: New Leadership Roles
New Leadership Roles % OF COMPANIES HIRING FOR ROLES CHIEF DIGITAL OFFICER CHIEF DATA OFFICER
Slide 41: All Leaders Are Digital Leaders
Slide 42: Today's Roadmap
21 ALL LEADERS ARE DIGITAL LEADERS Today’s Roadmap Accelerating Impact of Technology Unparalleled Value of Gartner Research Innovative Products 42
Slide 43: 2013 Client Key Initiatives
2013 Client Key Initiatives 2 Mobile Enterprise Strategy 7 IT Cost Optimization 3_IT Strategic Planning 8 4 Enterprise Architecture Program 9 Process Improvement IT Governance 5 Data Center Modernization and 10 BI & Analytics Consolidation ory, 28 a Gartner.
Slide 44: 2013 Client Key Initiatives
22 2013 Client Key Initiatives Source: Gartner.com Data, January 2014 2 Mobile Enterprise Strategy 3 IT Strategic Planning 4 Enterprise Architecture Program 5 Data Center Modernization and Consolidation 7 IT Cost Optimization 8 IT Governance 9 Process Improvement 10 BI & Analytics 1 Cloud Computing
Slide 45: Gartner business mix
Gartner 16% cisatin business ae Pecorge ben nit no pie 14 % Gartner ‘O Events Business Extraordinary Research Insight 13% Gartner Research Business Gartner.
Slide 46: Gartner Research Model
23 Gartner Note: Percentages based on midpoint of 2014 revenue guidance. 45 Gartner Research Model The Research Process
Slide 47: The People – Analysts
Gartner Research Model The People — Analysts Subject Matter Experts Over 960 analysts in 30 countries Over 160 based in APAG, over 220 based in Europe Minimum 15 years of experience at time of hire 60% have 20+ years of indusiry experience * Gartner.
Slide 48: The People – Analysts
24 Gartner Research Model The People — Analysts Over 960 analysts in 30 countries Over 160 based in APAC, over 220 based in Europe Minimum 15 years of experience at time of hire 60% have 20+ years of industry experience 160 220 580 Subject Matter Experts 47 Decision Makers in 9,071 enterprises Techn
Slide 49: The Research Process
Gartner Research Model The Research Process LJ Transparency Objectivity Quality
Slide 50: The Research Process
25 Gartner Research Model The Research Process Transparency Objectivity Quality 49 2 Mobile Enterprise Strategy 3 IT Strategic Planning 4 Enterprise Architecture 5 Data Center Modernization and Consolidation Rank Key Initiative 1 Cloud Computing Gartner Research Model The Research Process 50
Slide 51: Proprietary Data and Analytics
Over 4,400 PROPRIETARY DATA AND, ‘contract reviews ANALYTICS. end-user 200,000 and almost searches per interactions 14,000 strategy, jear x reviews Aterabyte of continually updated market data 5,500 IT Cost and Price benchmarks Gartner.
Slide 52: Proprietary Data and Analytics
26 Gartner Research Model Proprietary Data and Analytics Over 4,400 contract reviews and almost 14,000 strategy reviews A terabyte of continually updated market data 5,500 IT Cost and Price benchmarks 200,000 interactions 3.7 million document views 2.5 million end-user searches per year Written Acti
Slide 53: Packaging and Presentation
Gartner Research Model Packaging and Presentation Select Research Documents: “Agenda Overview for Analytics, BI and Performance Management” ergeones “Gartner Business Analytics Framework” GE) © ‘Predicts 2014: BI & Analytics Will Remain CIO's Top Priority" “Hype Cycle for Business Intelligence and A
Slide 54: Packaging and Presentation
27 Select Research Documents: “Agenda Overview for Analytics, BI and Performance Management” “Gartner Business Analytics Framework” “Predicts 2014: BI & Analytics Will Remain CIO’s Top Priority” “Hype Cycle for Business Intelligence and Analytics” Gartner Research Model Packaging and Presentation Ga
Slide 55: Packaging and Presentation
Gartner Research Model Packaging and Presentation Select Research Documents: “Toolkit: Effective Requirements Gathering in Business Analytics Projects” Fee “Deliver BI with a ‘Think Global Act Local’ Organizational Model” PRESENTATION) “Use Incentives to Bolster BI Adoption and Advance Program Matur
Slide 56: Packaging and Presentation
28 Gartner Research Model Packaging and Presentation Select Research Documents: “Toolkit: Effective Requirements Gathering in Business Analytics Projects” “Deliver BI with a ‘Think Global Act Local’ Organizational Model” “Use Incentives to Bolster BI Adoption and Advance Program Maturity” “Why Busin
Slide 57: Packaging and Presentation
Gartner Research Model Packaging and Presentation PACKAGING AND PRESENTATION BI& Overview Select Operate Analytics & Roadmap Solution Deploy & Evolve @ Gartner.
Slide 58: Telephone Inquiries; Today's Roadmap
29 Gartner Research Model Packaging and Presentation Telephone Inquiries Today’s Roadmap Accelerating Impact of Technology Unparalleled Value of Gartner Research Innovative Products 58
Slide 59: Gartner for IT Executives
Gartner Research Vast Untapped Market Opportunity 347 Billion Supply Chain Clos Gartner for IT Executives Equips ClOs and senior executives with IT Functional the tools and insights they need to deliver exceptional business results for their organizations and develop themselves as Frontline IT succe
Slide 60: Gartner for IT Executives
30 Gartner for IT Executives Equips CIOs and senior executives with the tools and insights they need to deliver exceptional business results for their organizations and develop themselves as successful business leaders. Gartner Research Vast Untapped Market Opportunity $1.4 Billion Source: Gartner i
Slide 61: Gartner for Technical Professionals
Gartner Research Vast Untapped Market Opportunity 47 Billion other ‘Supply Chain Clos IT Functional Leaders Frontline IT Professionals. Gartner for Technical Professionals $1.4 Billion Provides technical teams with in-depth advice for Gartner CV implementing the ClO’s strategy through project- conan
Slide 62: Gartner for Supply Chain Leaders
31 Gartner Research Vast Untapped Market Opportunity $1.4 Billion $47 Billion Other* Front-line IT Professionals Supply Chain CIOs IT Functional Leaders 12 18 5 4 8 Gartner for Technical Professionals Provides technical teams with in-depth advice for implementing the CIO’s strategy through projectba
Slide 63: Gartner for Business Leaders
Gartner Research Vast Untapped Market Opportunity ‘$47 Billion Gartner for Business Leaders supply Chain Provides business leaders in Technology and Clos Service Providers with the tools and insight to ensure they succeed in the marketplace Leaders Frontline IT Professionals $1.4 Billion Gartner.
Slide 64: Gartner for Marketing Leaders
32 Gartner Research Vast Untapped Market Opportunity $1.4 Billion $47 Billion Other* Front-line IT Professionals Supply Chain CIOs IT Functional Leaders 12 18 5 4 8 Gartner for Business Leaders Provides business leaders in Technology and Service Providers with the tools and insight to ensure they su
Slide 65: Continuous Product Innovation
Continuous Product Innovation [content Technology Platform Usability/Interface
Slide 66: Strong Value Proposition
33 Continuous Product Innovation 65 Strong Value Proposition Right direction, right away Immediate shortlists on key initiatives Contract proposal reviews Best-practice budget benchmark Global perspective Best practice by vertical industry Strategic guidance Making the right decision Personal develo
Slide 67: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 68: Why Gartner – Alwyn Dawkins, Events
34 Why Gartner 67 Senior Vice President, Gartner Events Alwyn Dawkins
Slide 69: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 70: Gartner Events
35 Why Gartner 69 Gartner Events Differentiated live events leveraging research content 70
Slide 71: Our mission
Our mission: Make every conference we produce the MUST ATTEND event for the communities we serve Gartner.
Slide 72: Gartner Events at a glance
36 Make every conference we produce the MUST ATTEND event for the communities we serve Our mission: Gartner Events 64 Events 6 Continents World’s Leading IT Conference Producer 45,000 Attendees 2,000 Exhibitors
Slide 73: Gartner Events
Gartner Events Gartner Events Business Extraordinary Gartner Events Business Research Insight Current Relevant Actionable
Slide 74: Attendee Value Proposition
37 Gartner Events Current Relevant Actionable Gartner Events Business 73 Attendee Value Proposition Face-to-face Analyst interaction Industry leaders Unparalleled peer networking Access to leading solution providers Actionable advice
Slide 75: Attendee Value Proposition
Attendee Value Proposition Industry leaders ve A “ AV i,
Slide 76: Attendee Value Proposition
38 Attendee Value Proposition 75 Face-to-face Analyst interaction Industry leaders Unparalleled peer networking Access to leading solution providers Actionable advice Attendee Value Proposition Face-to-face Analyst interaction Industry leaders Unparalleled peer networking Access to leading solution
Slide 77: Attendee Value Proposition
Attendee Value Propo: Access to leading solution providers
Slide 78: Attendee Value Proposition
39 Attendee Value Proposition Face-to-face Analyst interaction Industry leaders Unparalleled peer networking Access to leading solution providers Actionable advice Attendee Value Proposition 78 Face-to-face Analyst interaction Industry leaders Unparalleled peer networking Access to leading solution
Slide 79: Exhibitor Value Proposition
Exhibitor Value Proposition
Slide 80: Exhibitor Value Proposition
40 Exhibitor Value Proposition Face to face interaction with high level attendees Cost effective lead generation 2013 Gartner Event Portfolio 64 strategic conferences covering all major geographies, attracting more than 45,000 technology and business professionals
Slide 81: Over 20,000 Participants including 6,800 CIOs
Over 20,000 Participants including 6,800 ClOs (up 12% YoY)
Slide 82: The World's Most Important Gathering of CIOs
41 UNITED STATES October 21 – 25 SPAIN November 5 – 8 JAPAN October 3 – 5 AUSTRALIA November 12 – 15 BRAZIL October 29 – 31 INDIA October 10 – 12 SOUTH AFRICA August 28 – 30 UNITED ARAB EMIRATES March 5 – 7 The World’s Most Important Gathering of CIOs and Senior IT Executives Over 20,000 Participant
Slide 83: Gartner Event Portfolio
14 Gartner Event Portfolio 64 strategic conferences Gartner UAE, — Gon ‘SYMPOSIUM ITxPO"2 ono, Sreinia fra ania SP. Bak pn ece Sn BE canner (Catalyst Conference TAcarner ‘Supply Chain Exseutve Conference Gartner.
Slide 84: 2014 Gartner Event Portfolio
42 2014 Gartner Event Portfolio 64 strategic conferences Why Gartner 84
Slide 85: Per Anders Waern, Gartner Consulting
/ : Per Anders Waern Senior Vice President, Gartner Consulting Gartner.
Slide 86: Gartner Consulting
43 Senior Vice President, Gartner Consulting Per Anders Waern Gartner Consulting Longer-term differentiated engagements leveraging Gartner research Gartner Consulting Business 86
Slide 87: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 88: Why Gartner – Consulting
44 Why Gartner 87 Photo Image will be inserted here Gartner Consulting Independent and Objective Powered by Gartner Research Proprietary Benchmark Enabled 88
Slide 89: Gartner Consulting
Gartner Consulting Gartner Consulting Business Extraordinary Research Insight Benchmarking Best Practices Products and Pricing Gartner.
Slide 90: Benchmark
45 Photo Image will be inserted here Gartner Consulting Benchmarking Best Practices Products and Pricing 89 Benchmark • Apply unrivaled data • Identify high impact opportunities • Drive improved performance 90
Slide 91: Best Practices For Key IT Initiatives
Best Practices For Key IT Initiatives * Customize application of proven best practices * Tied to client key initiatives « Reduce risks, improve business impact Gartner.
Slide 92: Right Products, Right Terms, Right Pricing
46 Best Practices For Key IT Initiatives • Customize application of proven best practices • Tied to client key initiatives • Reduce risks, improve business impact 91 Right Products, Right Terms, Right Pricing • Needs assessment • Contract negotiation support • Bottom line impact 92
Slide 93: Gartner Consulting Business
Gartner Consulting Gariner Consulting Business Extraordinary Research Insight 1 Gartner Consulting Business Independent and Objective Powered by Gartner Research Proprietary Benchmark Enabled Gartner.
Slide 94: Experienced Senior Practitioners
47 Photo Image will be inserted here Gartner Consulting Independent and Objective Powered by Gartner Research Proprietary Benchmark Enabled Gartner Consulting Business 93 Photo Image will be inserted here Experienced Senior Practitioners • 509 billable Consultants • Over $400K average annual revenue
Slide 95: Managing Partners
Managing Partners ARR
Slide 96: Managing Partners
48 Managing Partners • Long term, trust based relationships • Repeat business • 85+ Managing Partners 95 Improved Efficiency Through Managing Partner Model • Improved utilization and billing rates • Increased engagement sizes • Enter 2014 with >$100M in backlog 96
Slide 97: Why Gartner
Why Gartner Strong Value Proposition Vast Market Opportunity Winning Strategy anata Gartner.
Slide 98: Why Gartner – David Godfrey, Worldwide Sales
49 Why Gartner 97 Senior Vice President, Worldwide Sales David Godfrey
Slide 99: Gartner business mix
Gartner 16% esting ssnss ae Prcege od npc trun pine, 44 % Gartner (© Events Business Extraordinary Research Insight 13% Gartner Research Business Gartner.
Slide 100: Gartner Sales
50 Gartner Note: Percentages based on midpoint of 2014 revenue guidance. 99 Gartner Sales 100
Slide 101: Gartner Sales
Gartner Sales 1,643 quota-bearing sales associates Profile of a Gartner Account Executive 270% growth since 2004 51% outside of United States Highly motivated Great sales DNA Passionate Goal oriented Gartner.
Slide 102: Vast Market Opportunity for Research
51 Gartner Sales 1,643 quota-bearing sales associates • 270% growth since 2004 • 51% outside of United States Profile of a Gartner Account Executive • Highly motivated • Great sales DNA • Passionate • Goal oriented 101 Vast Market Opportunity for Research Total 108,000 38,000 # of Enterprises Market
Slide 103: Client Enterprise and Contract Value Growth
Client Enterprise and Contract Value Growth 9.071 G«) 630 # Of Client Enterprises aor 6.798 see 62155318 B 2004-2005 -~—«2006~=—«2007 201120122013, Research Contract Value samy S128 $1423M sovem Se s7sam — $84M 784M ssoam S599M 640M a CJ B [J BeBeBBeeRRPeRePE 2006 2008-2008 -«=«2007-«2008~«=« 200820
Slide 104: Client Enterprise and Contract Value Growth
52 Client Enterprise and Contract Value Growth +12% FX Neutral 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Research Contract Value $1,263M $1,116M $978M $753M $834M $784M $509M $593M $640M $1,423M # Of Client Enterprises 6,400 6,544 6,798 6,215 6,318 5,818 9,071 8,070 7,680 2004 2005 2006 2007
Slide 105: Research sold as subscriptions to individuals
Research sold as subscriptions to individuals clo + Role-based + Recurring revenue IT Functional Leaders SSLLLLLKLLLLLLB BS rrrtessnas SHSSSSHKLSSLLLSSS B BLSLAZLSBLLSALBLLLBB te Gartner.
Slide 106: Research sold as subscriptions to individuals
53 … … … … … Research sold as subscriptions to individuals • Role-based • Recurring revenue IT Functional Leaders CIO IT Professionals 105 … … … … … Research sold as subscriptions to individuals IT Functional Leaders CIO IT Professionals 106
Slide 107: Research sold as subscriptions to individuals
Research sold as subscriptions to individuals a2 Teaco a SRRLALAAALLLLBL B rrrctessonts SHSSSSLSSSSLLLSS SELESLLLLLLLLLZ.Z SELLSLLLLLLLSLLLLZE SZ
Slide 108: Research sold as subscriptions to individuals
54 … … … … … Research sold as subscriptions to individuals IT Functional Leaders CIO IT Professionals 107 Why Gartner 108
Slide 109: Sales Strategy to Capture Market Opportunity
Sales Strategy to Capture Market Opportunity Capacity Coverage Sales Effectiveness Gartner.
Slide 110: Sales Strategy to Capture Market Opportunity
55 Sales Strategy to Capture Market Opportunity Coverage Capacity Sales Effectiveness 109 Sales Strategy to Capture Market Opportunity Coverage Capacity Sales Effectiveness 110
Slide 111: Sales Strategy to Capture Market Opportunity
Sales Strategy to Capture Market Opportunity Capacity Coverage Sales Effectiveness Gartner.
Slide 112: Sales Strategy to Capture Market Opportunity
56 Sales Strategy to Capture Market Opportunity Coverage Sales Effectiveness Capacity 111 Sales Strategy to Capture Market Opportunity Sales Effectiveness Capacity Coverage 112
Slide 113: Sales Strategy: Capacity
Sales Strategy to Capture Market Opportunity > Grow sales headcount 15 — 20% annually + Architected recruitment and training plan
Slide 114: Sales Strategy: Capacity
57 Sales Strategy to Capture Market Opportunity • Grow sales headcount 15 – 20% annually • Architected recruitment and training plan Capacity 443 550 663 806 928 942 1,049 1,268 1,417 1,643 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Direct Quota Bearing Headcount Sales Strategy to Capture Mar
Slide 115: Sales Strategy: Coverage
Sales Strategy to Capture Market Op; Coverage | + Matched to global Opportunity + Emphasizing client intimacy
Slide 116: Sales Strategy: Coverage
58 Coverage Sales Strategy to Capture Market Opportunity • Matched to global opportunity • Emphasizing client intimacy Coverage 87 95 101 111 130 120 127 138 146 157 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Contract Value per Enterprise ($K) 5,818 6,215 6,318 6,798 6,400 6,544 7,680
Slide 117: Sales Strategy to Capture Market Opportunity
Sales Strategy to Capture Market Opportunity Capacity Coverage Sales Effectiveness 1 Gartner.
Slide 118: Sales Effectiveness
59 Sales Strategy to Capture Market Opportunity Coverage Capacity Sales Effectiveness 117 Sales Strategy to Capture Market Opportunity • Great Talent • World Class Training • Proprietary Tools and Best Practices Sales Effectiveness
Slide 119: Gartner Sales: A great place to work
Gartner Sales: A great place to work . ii - Gartner reputation [glassdoor~ Best Place To Work, Employees’ Choice Winner 2013 and 2014 ‘Ten Best Tech Companies to Work For 2013
Slide 120: Gartner Sales: A great place to work
60 Best Place To Work, Employees’ Choice Winner 2013 and 2014 Ten Best Tech Companies to Work For 2013 Gartner Sales: A great place to work Gartner reputation Gartner Sales: A great place to work Gartner culture • Strategic relationships • Collaboration • Leading tools and best practices • Innovativ
Slide 121: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 122: Why Gartner – Chris Lafond, CFO
61 Why Gartner 121 Chief Financial Officer Chris Lafond
Slide 123: Consistent, Winning Growth Strategy
Consistent, Winning Growth Strategy ions Extraordinary Strong Sales High-Value World-Class Research Insight Capability Differentiated Service Offerings Continuous Improvement and Innovation Performance-Driven Leadership Team ‘a Gartner.
Slide 124: Today's Roadmap
62 Consistent, Winning Growth Strategy Performance-Driven Leadership Team Continuous Improvement and Innovation 123 Today’s Roadmap Exceptional Performance Powerful Economics Strong Cash Generation Outlook 124
Slide 125: The Financial Plan We Set in 2005
g Growth Strategy | Plan We Set in 2005 + Grow the Research business * Optimize the Events portfolio « Improve the profitability of the Consulting business + Leverage our G&A infrastructure * Drive shareholder value with capital deployment
Slide 126: Grow the Research Business
63 Consistent, Winning Growth Strategy The Financial Plan We Set in 2005 • Grow the Research business • Optimize the Events portfolio • Improve the profitability of the Consulting business • Leverage our G&A infrastructure • Drive shareholder value with capital deployment Consistent, Winning Growth
Slide 127: Grow the Research Business
Consistent, Winning Growth Strategy Grow the Research Business 2004 2013 Events 11% Research Events 13% 71% Research 57% Consulting 18% Consulting 30% wo Gartner.
Slide 128: Grow the Research Business
64 Consistent, Winning Growth Strategy Grow the Research Business Events 13% 2004 Consulting 30% Research 57% Events 11% 2013 Consulting 18% Research 71% 127 Consistent, Winning Growth Strategy Grow the Research Business 62% Research Contribution Margin 2004 128
Slide 129: Research Contribution Margin
Consistent, Winning Growth Strategy Grow the Research Business Research Contribution Margin +740 bps a 69%
Slide 130: Optimize the Events Portfolio
65 Consistent, Winning Growth Strategy Grow the Research Business 69% 2004 62% 2013 +740 bps Research Contribution Margin 129 Consistent, Winning Growth Strategy Optimize the Events Portfolio # Events +14% 2004 64 2013 56 Attendees 30,999 44,986 +45% 2004 2013 1,321 +54% 2,040 2004 2013 Exhibitors 1
Slide 131: Improve Consulting Performance
Consistent, Winning Growth Strategy Improve Consulting Performance Revenue ($M) Headcount 493 509 $314 cou 60% $259 — | Feel pees cl 2004 = 2013 2004 = 2013 2004 = 2013 Gartner.
Slide 132: Improve Consulting Performance; Leverage G&A
66 Revenue ($M) 2004 $259 2013 $314 Headcount 2004 493 2013 509 Utilization (%) 2004 60% 2013 64% Consistent, Winning Growth Strategy Improve Consulting Performance 131 Consistent, Winning Growth Strategy Leverage our G&A Infrastructure 2004 18% of revenue 2013 15% of revenue ~(300) bps G&A % of Rev
Slide 133: Drive Shareholder Value with Capital Deployment
Consistent, Winning Growth Strategy Drive Shareholder Value with Capital Deployment Net Income Free Cash Flow © $183M $280M 17M ‘523M De! 2004 2013 2004 2013 Free cash flow historical 5x Net Income (0 Soere smd on esl uh i ana scenann rn c ma Gartner.
Slide 134: Drive Shareholder Value with Capital Deployment
67 Consistent, Winning Growth Strategy Drive Shareholder Value with Capital Deployment 2004 2013 Net Income 2004 2013 Free Cash Flow (a) Free cash flow historically >1.5x Net Income $183M $17M $280M $23M (a) See the attached Glossary for the definition of Free Cash Flow, and cautionary statement reg
Slide 135: The Financial Plan We Set in 2005
Consistent, Winning Growth Strategy The Financial Plan We Set in 2005 + Grow the Research business Optimize the Events portfolio Improve the profitability of the Consulting business Leverage our G&A infrastructure Drive shareholder value with capital deployment
Slide 136: Earnings & Cash Flow Track Record
68 Consistent, Winning Growth Strategy The Financial Plan We Set in 2005 • Grow the Research business • Optimize the Events portfolio • Improve the profitability of the Consulting business • Leverage our G&A infrastructure • Drive shareholder value with capital deployment Consistent, Winning Growth
Slide 137: Why Gartner
Why Gartner Strong Value Winning Proposition Strategy Vast Market Exceptional Opportunity Business Model Gartner.
Slide 138: Grow the Research Business
69 Why Gartner 137 Consistent, Winning Growth Strategy Grow the Research Business Events 11% 2013 Consulting 18% Research 71% Events 11% 2014 Estimate Consulting 16% Research 73% Note: Based upon mid-point of 2014 Revenue Guidance 138
Slide 139: Research Business Characteristics
Research Business Characteristics + Subscription-based model with recurring revenue Extraordinary Annual contracts Research Insight High client renewal rates 13% Gartner Research Business Negative working capital High incremental margins Strong cash generation on Ssh gt ai ae os Gartner.
Slide 140: Research Business Economics
70 Research Business Characteristics • Subscription-based model with recurring revenue • Annual contracts • High client renewal rates • Negative working capital • High incremental margins • Strong cash generation Note: Based upon mid-point of 2014 Revenue Guidance 139 Research Business Economics 70%
Slide 141: Margin Expansion
Margin Expansion Incremental Margins Research 70% Events 50% Consulting 40% (Soest any ttn mand EIA a enn sa gy en AP nc Gross Contribution Margin +800 60% 52% bps ry 2004 2013 Normalized EBITDA Margin® +760 bps A 194% 41.8% 2004 2013 Gartner.
Slide 142: Margin Expansion
71 Margin Expansion 11.8% 19.4% Normalized EBITDA Margin(a) +760 bps 2004 2013 Incremental Margins (a) See the attached Glossary for the definition of Normalized EBITDA, and cautionary statement regarding this non-GAAP financial measure Events 50% Research 70% Consulting 40% 52% 60% Gross Contributi
Slide 143: Driving Growth in Research
Driving Growth in Research Driving Contract Value Growth Gartner.
Slide 144: Increasing Sales Capacity
72 Productivity per Acct Exec (AE) Sales Force Capacity Driving Contract Value Growth Driving Growth in Research 143 1,643 1,417 1,268 1,049 928 942 806 663 550 443 Increasing Sales Capacity Direct Quota Bearing Headcount 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 16% CAGR 144
Slide 145: Calculating Average Productivity per Sales Person
« Rolling four quarter to eliminate seasonality * Measuring change in total contract value (net contract value increase or NCVI) + FX neutral « Use opening headcount for simplicity
Slide 146: Calculating NCVI per Sales Person
73 Calculating Average Productivity per Sales Person • Rolling four quarter to eliminate seasonality • Measuring change in total contract value (net contract value increase or NCVI) • FX neutral • Use opening headcount for simplicity Calculating NCVI per Sales Person Closing CV per AE Opening CV per
Slide 147: 2013 Contract Value Growth and Productivity
2013 Contract Value Growth and Productivity 412% - $1,423M $153M 2013 Opening CV 2013 NCVI 2013 Closing CV 2013 FX Opening 2013 direct Average e quota bearing Productivity (NCVI) Neutral Nov headcount — per AE 1,417 $108k $153M Gartner.
Slide 148: 2013 Contract Value Growth and Productivity
74 2013 Contract Value Growth and Productivity $153M 2013 Opening CV $1,270M 2013 Closing CV $1,423M 2013 NCVI 2013 FX Neutral NCVI $153M Opening 2013 direct quota bearing headcount 1,417 Average Productivity (NCVI) per AE $108k +12% Constant Productivity Scenario Opening 2014 direct quota bearing h
Slide 149: Productivity Improvement Scenarios
Slide 150: Productivity Improvement Scenarios
75 Productivity Improvement Scenarios $5k Improvement $10k Improvement $20k improvement Incremental NCVI $9M $17M $33M Incremental Contribution @ 70% flow thru (following year) $6M $12M $23M $108k per AE +13% $177M $5k improvement +13% $186M $10k improvement +14% $194M $210M $20k improvement +16% 14
Slide 151: Research Business Characteristics
Slide 152: Cash Flow Generation
76 Research Business Characteristics • Subscription-based model with recurring revenue • Annual contracts • High client renewal rates • Negative working capital • High incremental margins • Strong cash generation (a) Note: Based upon mid-point of 2014 Revenue Guidance 151 Capital Deployment Cash Flo
Slide 153: Capital Deployment: Share Repurchase Programs
Slide 154: Long-Term Financial Objectives
77 Capital Deployment Share Repurchase Programs Expect to end 2014 with 89 – 90 million shares outstanding 2010 2011 2012 2015E $100M $111M $197M $400M $212M 2014E $400M 2013 Annual Share Repurchase Activity ($ millions) 153 Long-Term Financial Objectives Normalized EBITDA(a) margin improvement 50 –
Slide 155: Levers for Margin Expansion
Slide 156: Levers for Margin Expansion and 2014 Guidance
78 Levers for Margin Expansion • Accelerate growth in Research • Expand segment margins up to incremental margins • Increase Research as a percent of total revenue • Increase sales productivity • Leverage G&A expenses Normalized EBITDA(a) margin improvement 50 – 150 bps per year (a) See the attached
Slide 157: Why Gartner
Slide 158: Why Gartner Appendix
79 Why Gartner 157 Appendix
Slide 159: Slide 159
Slide 160: Projected 2014 Earnings and Cash Flow Outlook
80 Projected 2014 Earnings and Cash Flow Outlook Diluted Earnings per share $2.12 – $2.30 10% – 19% Operating Cash Flow $336 – $358 6% – 13% Capital Expenditures $(36) – $(38) Free Cash Flow (1) $300 – $320 7% – 14% (1) See the attached Glossary for a discussion of Free Cash Flow. (2) See Forward Lo
Slide 161: Glossary: Non-GAAP Financial Measures
81 Glossary Non-GAAP Financial Measures Free Cash Flow: Represents cash provided by operating activities excluding cash charges related to the acquisitions of AMR Research and Burton Group, which primarily consist of certain nonrecurring costs such as severance and other exit costs (“Cash Acquisitio