Gardening Gartner

REVIEW SUMMARY
Company. Gartner
Industry. Technology
Key. CEOs with second homes on the Gulf Coast may be enticed to establish operations in the region.

In the world of technology research and consulting, it's fair to say Gartner is a dominant player.

Larger companies turn to Gartner's army of 775 analysts to help them stay on top of the latest technology trends and figure out where best to spend IT budgets.

Gartner, a publicly traded company, reported nearly $1.3 billion in revenues last year and profits rose 16% to $96.3 million. Including its Stamford, Conn., headquarters, Gartner has 19 domestic and 42 international offices.

So how did Fort Myers become Gartner's third-largest office? After all, this Gulf Coast town isn't known as a hub of technology, and the firm's clients are scattered all over the world.

Already, Gartner's Fort Myers office houses nearly 10% of the company's worldwide staff of 4,500 people. And it's going to get bigger. Gartner is building a 120,000-square-foot building, roughly the size of two football fields, where it plans to double its staff to about 800 people.

The answer to Gartner's choice of Fort Myers for its growth has to do with population migration, lifestyle choices, lower costs of doing business and the fact that Manny Fernandez, the chairman, president and CEO of Gartner at the time, has a home on Sanibel Island.

That last criteria carries so much weight that the Fort Myers Regional Partnership, the county's business recruitment arm, has made it a priority to identify CEOs of large companies who have second homes in Southwest Florida. “It's certainly a good strategy for us to deploy,” says Jim Moore, executive director of the Fort Myers Regional Partnership, Lee County's economic development arm. “We have that advantage that many places don't. It gives us a chance at a company like Gartner that we wouldn't otherwise have.”

Find the CEOs
The Fort Myers area has long been a destination for corporate CEOs, especially in winter months. Thomas Edison and Henry Ford are perhaps the most famous and earliest captains of industry to own second homes in Fort Myers.

Fernandez, who remains chairman emeritus of Gartner, grew up in Daytona and attended the University of Florida but had never visited the Fort Myers area until the early 1990s. “Gartner had an industry analyst who lived in Sanibel, so I came over to visit him,” Fernandez recalls.

Fernandez liked Sanibel so much he bought a home there in 1996. A year later, in August 1997, Gartner announced plans to relocate its accounting operations from Stamford to the Gateway area of Fort Myers.

But Gartner didn't pick Fort Myers just because the CEO had a house nearby. “At the beginning there were 15 or 20 cities, and we narrowed it down to four,” Fernandez says. “We looked at Austin, Texas, near Atlanta, Orlando and Fort Myers.”

In the end, the choices narrowed to Atlanta and Fort Myers. “It became a decision of cost, friendliness and quality of life,” Fernandez says.

Gartner's initial expansion here only involved the relocation of its accounting functions. “The techie need wasn't what was on the list,” says Fernandez.

And Gartner wasn't the pioneer in this regard. General Electric and Sony already had similar, well-established accounting back-office operations in Fort Myers. That fact proved to Gartner that there was a labor force in town with which to build a finance operation.

The decision to establish the accounting operations in Fort Myers turned out well. The company employs about 400 people here and has added a sales division that focuses on smaller companies that have less than $1 billion in revenues. “It turned out to be very successful,” Fernandez says. “We continued to expand that sales area to a point that we have now maxed out the building.”

For business recruiters, this is a classic example of the latest tactic in business recruitment: “economic gardening,” or finding prospects within your community instead of chasing them blindly around the country. “All you want is a chance,” says Moore.

Expansion plans
The responsibility to build Gartner's operation from scratch fell on Christopher Lafond, who has since risen through the ranks and is now the company's executive vice president and chief financial officer.

But from 1998 to 2002, Lafond worked in Naples as an assistant controller. In 1998, the company's annual revenues were about $250 million and the company needed to expand in a lower-cost area such as Fort Myers. “Connecticut is a pretty expensive place to operate a business,” he says. “We moved our entire accounting operation down here.”

Lafond says recruiting people in Fort Myers wasn't too hard, especially among local residents. “A lot of people grew up here and want to stay here,” he says. What's more, people continue to move to Florida. “There's a lot of people coming down here for lifestyle purposes,” he says.

Gartner actively recruits from campuses at the University of Florida in Gainesville and Florida Gulf Coast University in Fort Myers. It hires students as interns and then offers them jobs if they prove their worth.

Gartner had so much success building the accounting operation in Fort Myers that it started another business, selling its services by phone to smaller companies with less than $1 billion in revenues. Until then, Gartner had been focused on selling its analysis and consulting to much larger enterprises.

The new sales effort was a success. “Every company in the world uses technology in some meaningful way,” says Lafond. “The people here are selling all over the U.S. The main thing they're selling is core research.”

Gartner plans to expand both its sales operation and the finance back-office to 800 people in a new $14 million, 120,000-square-foot facility that McGarvey Development is building in Fort Myers. Besides offices, the building will house a 200-person cafeteria and gym. “We have the core base of people down here; we're expanding all over the world,” says Lafond.

Gartner decided to keep these jobs in the U.S. rather than expand them in back-office meccas such as India. “Are they cheaper than Fort Myers? Sure. But operationally, the benefits outweighed the costs of other locations,” Lafond says.

It helped that Florida and Lee County offered incentives for the company to grow here. In all, Gartner will receive $4.2 million in subsidies to offset the expansion costs.

With the cost advantages of Fort Myers, why not entice Gartner to move its headquarters to Florida? As much as Lafond likes the idea, he says such a move would be too disruptive. “When you think about moving operations, you lose good people,” Lafond says. “We'll expand where it works well.”

AT A GLANCE
Gartner Headquarters: Stamford, Conn.
CEO: Eugene Hall
Stock symbol: IT
Recent price: $39
52-week high: $43
Dividend: Nil