Failure to get a favorable mention in an analyst report could undermine years of product development. Acceptance, on the other hand, boosts a company's exposure and is essential for buyers drawing up short lists. "Our target market is big companies, so Gartner matters," Vaughan says.

Industry Ties

The IT research and advisory sector has been under pressure for several years as business customers cut back on research spending and turn to cheaper options, resulting in both consolidation and new kinds of services. "There's a lot of free information available," explains Ian Birks, CEO of research firm Ideas International, which two years ago acquired DH Brown Associates.

Gartner, the biggest of IT research companies, last year snapped up Meta Group for $168.3 million, contributing to Gartner's recent growth. Through the first nine months of 2005, its revenue jumped 10% to $699.7 million.

But Gartner's financial statements also reveal a company with ties to the IT industry. The firm invests in hedge funds that hold significant stakes in the companies it covers. One such investment is SI Ventures' SI Venture Fund II. On its Web site, SI Ventures notes a "long-term relationship" with Gartner. SI Ventures helped launch Authentor Systems, which provides network security software. Gartner analysts have been quoted in press releases issued by Authentor supporting the company's approach to security.

Gartner also is partly owned by investment companies that have stakes in tech vendors upon which Gartner is supposed to be casting a neutral eye. Silver Lake Partners, which owns 33% of Gartner, counts Michael Dell, Bill Gates, Larry Ellison, and other tech-industry shakers among its current or former investors. Hedge fund ValueAct Capital owns more than 16% of Gartner and has owned as much as 11% of MSC Software, which Gartner views as a "challenger" in the market for product life-cycle-management software.

While Gartner's investors may not wield direct influence over the firm's product rankings, they do help dictate the company's leadership. Silver Lake and ValueAct, Gartner acknowledges in a Securities and Exchange Commission filing, "may be able to, either individually or together, exercise significant influence on matters requiring stockholder approval." Such matters would include approval of Gartner's senior executives.

Hype Factor

This doesn't mean IT research isn't valuable to many people; thousands of user companies subscribe to research services. Here at InformationWeek, editors regularly talk to analysts to get their perspective on technology trends and forecasts. (InformationWeek also receives millions of dollars in advertising and custom-publishing revenue from technology companies, but ads and "advertorials" are clearly marked and do not involve the editorial staff.)

Gartner's Quadrant for the security information- and event-management market helped Bruce Forman, director of information security at Genesis HealthCare, ensure that he didn't miss any key vendors when he was researching the technology. "It's hard to stay up on this stuff," he says.