Growth for ISG as It Buys Software Researcher Ventana

Tech research and advisory firm Information Services Group (ISG) has announced third quarter revenue up 4.2% to $71.8m (about half of this organic) and adjusted EBITDA flat at $10.6m. It has also announced the acquisition of Ventana Research, expanding its coverage into the software industry.

Growth was driven by performance in Europe, where revenue grew 14% to $22.1m: in the Americas it grew just 1% to $42.5m and in Asia Pacific it was down by 2% to $7.2m. Overall currency effects positively impacted reported revenues by $1.4m.

For the fourth quarter, ISG is targeting revenues of between $68m and $71m and adjusted EBITDA of between $9.0m and $10.5m.

Chairman and CEO Michael P. Connors says the revenue set a new Q3 record, and notes that recurring revenues rose 19%. He comments: 'These results were powered by a relentless focus on execution and our proactive management of the current demand environment. Our enterprise clients continue to leverage our capabilities with a dual focus on all things digital and cost optimization, a traditional sweet spot for ISG. Overall, clients are slower in their decision-making and spending is being stretched over longer periods of time, amid concerns about continued economic uncertainty and rising geopolitical tensions. With that said, our pipeline remains strong, and the pace of execution will be driven by clients' need for speed as they position themselves for 2024 when conditions are expected to improve'.

The acquisition of Bend, Oregon-based Ventana expands the capabilities of ISG's Research division. Founded in 2002, Ventana now tracks more than 2,000 software vendors and covers more than 250 of them in-depth to provide detailed analyst and research coverage of the global software sector. Its set of research-based products includes an online community for business and IT professionals.

Connors says the buy makes ISG 'a stronger global powerhouse in technology research', adding: 'We are famously known for our industry-leading coverage of the managed services sector, and now we are expanding and deepening our coverage of the all-important software industry. In addition to increasing our market research coverage, we see synergies to accelerate the growth of our Software Advisory business with enterprises'. The company's own ISG Index figures suggest that software-based 'XaaS' solutions - including infrastructure-as-a service and software-as-a-service - account for more than 60% of global spending on IT and business services, up from 48% five years ago. 'We expect spending on cloud-based, software-driven services to continue expanding in the coming years' says Connors, 'and with it, client demand for in-depth research and advice to guide software investment decisions'.

ISG was founded in 2006 and is based in Stamford, CT. It now employs around 1,600 professionals operating in more than twenty countries. Web site: www.isg-one.com .