GARTNER, INC.

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GARTNER, INC.

Moderator: David Cohen

February 14, 2019

10:30 a.m. ET

Operator: This is Conference # 8259589new

Male: Ladies and gentlemen, please welcome to the stage, Gartner Group Vice

President of Investor Relations, David Cohen.

David Cohen: Good morning, and welcome to Gartner Investor Day 2019. Thanks to all of

you in the room and on the webcast for joining us today. I know you have

busy schedules, and we appreciate your taking the time to be with us this

morning. Whether this is your first Gartner Investor Day or you've been

following the company for a number of years, we believe you will leave with

a greater appreciation for the indispensable, unrivaled value we offer clients,

the Gartner formula we apply and the long-term, sustained double-digit

growth we drive.

Before we begin, please take note of our safe harbor statement shown on the

screen.

Today, you will hear a compelling story of Gartner and its relevance for

investors seeking long-term, sustained double-digit contract value, revenue,

earnings and free cash flow growth. We will begin with our CEO, Gene Hall,

who will discuss the way that the pace of change is impacting leaders across

all enterprise functions.

Gene will describe Gartner's unique business and our powerful history of

disciplined execution, applying operational excellence to drive growth and

shareholder returns. Mike Harris, our Head of Research and Advisory, will

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share a compelling view of Gartner's value proposition for leaders across all

enterprise functions. He will go deeper into the dynamics that are creating

urgency for our insight, illustrate how our clients get mission-critical value

from Gartner and describe our scalable, continuously improving research

model. Following Mike, our leaders of Global Technology and Business

Sales, Joe Beck and Chris Thomas, will introduce you to their growing teams,

talk about how they are going to market and share with you how they apply

our sales excellence playbook to drive productivity and sustained double-digit

contract value growth.

After a break for lunch, Craig Safian, our CFO, will describe the powerful

combination of the Gartner formula and business model and how they enable

us to drive long-term, sustained double-digit growth in revenue, earnings and

free cash flow. Finally, Gene and Craig will answer your questions. Thank

you, again for joining us today.

(Video Begins)

Male: Enterprise leaders are on a journey of opportunity, risk, and unrelenting

change. Across every business function, the goal is not simply to arrive but to

thrive. The roads that led to success yesterday offer no assurances today and

every decision carries greater uncertainty than ever before.

As their worlds become more interconnected than ever, leaders face decisions

that will impact not only their own organization, but the enterprise as a whole.

And they're turning to Gartner for help. Talent, technology, strategy, critical

building blocks of their success. In every area of their business, Gartner sits at

the intersection of decisions that matter most. We understand the roles, the

challenges, the risks. And we know how to maximize opportunity.

Leaders across every function in every industry, everywhere in the world rely

on Gartner for the indispensible insights, tools, and advice. To help them

address their mission critical priorities, to get ahead of change, to challenge, to

lead, to thrive.

Welcome to Investor Day 2019.

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(Video Ends)

Male: Ladies and gentlemen, please welcome to the stage Gartner's CEO, Gene Hall.

Eugene Hall: Well, good morning, and welcome to Gartner Investor Day.

We're living in accelerated times. Digital disruption, regulatory change,

shifting customer expectations, cybersecurity risks, changing socioeconomic

expectations, geopolitical risks, macroeconomic dislocations. It has never

been a harder time to be a leader, and the rate of change continues to

accelerate. The average tenure of a company on the S&P500 has declined

from 61 years to 18 years and is expected to decline another 12 -- to a mere 12

years by 2027. For enterprises, it's no longer just about incremental

improvements. Their very survival has never been more at risk, and same is

true for their leaders.

Leaders in every major function of the enterprise across every industry and in

every geography need help, and they need it now.

Who do leaders depend on to survive and thrive in this environment? Gartner.

And for investors seeking long-term, sustained double-digit growth, growth in

the top line, growth in free cash flow, Gartner is an unrivaled opportunity.

You look like you needed a break. So today, I'll give you a detailed overview

of our business. You'll get a snapshot of our indispensable, unrivaled value

proposition. I'll outline our vast market opportunity, and I'll share a strategy

to capture that opportunity through our 3 businesses, Research, Conferences

and Consulting, which will fuel long-term, sustained double-digit growth.

Now I'll take a minute to introduce our executive leadership team who is here

with us this morning, starting with those who are going to share the stage later

today. First, we have Mike Harris, who leads our Global Research and

Advisory team. Can we bring the house lights up? You'll hear from Joe Beck

and Chris Thomas, who lead our Global Sales Organization. And most of you

know Craig Safian, our CFO. And the other members of our leadership team

that are here today are Ken Davis, who leads Product and Services, globally;

our Head of Conferences, Alwyn Dawkins; our Chief Information Officer,

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Mike Diliberto, Mike's back there; our Head of Consulting, Scott Hensel; and

our General Counsel, Jules Kaufman, Jules is over here; Robin Kranich, who

leads Human Resources; and David McVeigh, who heads up Marketing.

So during our break and after the presentations, please get to know our team.

All right. So thanks, you can sit down now. And we operate in 3 business

segments: Research, Conferences, and Consulting. Last year alone, Gartner

helped 15,600 enterprises in 100 countries around the world with their

mission-critical priorities. We delivered about $4 billion in revenues. We

provided great jobs to 15,000 associates around the world, and we delivered

market-beating returns for our shareholders.

Few organizations have this level of global impact. The Gartner Conferences

deliver incredible insights to our attendees, while building our brand and

making a profit. This segment represents about 11 percent of our business.

And our mission is to produce must-attend conferences for the communities

that we serve. Our conferences are aligned to the same roles and functions

that we serve in our Research business. And by combining the outstanding

value of our research with unparalleled peer networking and the magic of live

events, every conference we produce becomes the most important annual

gathering for the executives that we serve.

We inspire, educate and equip our attendees for success. And as a result, the

first thing that many executives do at the beginning of every year is to (sign

up) to attend their annual (inaudible).

Gartner Conferences had its best year yet in 2018 with virtually every metric

hitting new highs. We also accelerated our Evanta conferences, which are C-

level invitation-only regional summits. (And this year,) we expect to produce

more than 300 conferences throughout the world, including 70 destination

conferences, covering IT, HR, Supply Chain, Marketing, Sales and Finance.

Across these conferences, we expect to attract more than 100,000 attendees,

including more than 15,000 Chief Information Officers and thousands more

C-level executives in the business functions that we serve. So Gartner

Conferences deliver incredible insights to our attendees while building our

brand and of course, making a profit.

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The Gartner Consulting makes up about 9 percent of our business. Gartner

Consulting supports Chief Information Officers and their teams. We provide

clients a deeper level of involvement through extended project-based work to

help them execute their most strategic initiatives. Gartner Consulting is

highly differentiated. First, we're independent and objective. We don't sell

software. We don't sell hardware, and we don't do implementation services.

In addition, all of our engagements are powered by Gartner Research, the best

content and insights available anywhere.

And we evolved our Consulting strategy to align more closely to Research.

We rolled out a new organization, a new operating model, and this is going to

improve our execution in driving growth and delivering value to clients. We

strengthened our Consulting solutions and offerings. We defined new career

paths, upgraded recruiting capabilities, increased our performance

management processes, all to position this segment for a strong 2019 and

beyond.

So Gartner's Consulting serves as an extension of Gartner Research that

provides clients with a deeper level of involvement through extended, project-

based work to help them execute their most strategic initiatives. Now

Research is our largest and most profitable segment, and it represents about 80

percent of our revenues. Our Research segment sits at the core of Gartner's

indispensable, unrivaled value proposition. Our value proposition addresses

the critical needs of leaders across the major functions in the enterprise.

Now every leader has make-or-break initiatives that disproportionately impact

the ongoing vitality of their enterprise and of course, their personal success.

Critical initiatives like these extend over a period of time. They span multiple

business functions. They extend several layers into the organization, and they

have ongoing, important decision points. So examples of that include

integrating a large acquisition, implementing new financial management

systems or driving digital transformation to achieve competitive advantage.

With the accelerated pace of business, leaders have to make these decisions

faster than ever, and they have to get them right.

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The penalty for getting them wrong is high both for the company and the

individual. Now if that weren't enough, executives simultaneously handle

multiple of these high-impact initiatives. Executives need help getting to the

right decisions. They need someone they can trust, and they need that help

now. Our indispensable, unrivaled value proposition addresses this critical

need. We have more than 2,000 world-class experts on the most important

priorities for business and government leaders.

We create indispensable insights, best practices, peer exchanges and

implementation guides across every major enterprise function. We're

independent, and we're objective. We have an unparalleled community of C-

level peers to complement our expert advice, to share real-world case

examples and to validate major decisions. With the accelerated pace of

business today, business leaders need help in real time. So we deliver critical

insights on demand, and we do this through our cloud-based subscription

service and through the ability to talk one-on-one with our analysts and

advisers, also on demand. We play where the stakes are high, delivering

incredible insights at a price that's extremely low relative to the value. Even

in our largest clients, Gartner costs are a tiny fraction of their budget. There is

no other place that our clients can get such valuable insights on demand and at

a very modest cost.

This is why our clients stay with us, renew at high rates and spend more with

us year after year. Now our indispensable, unrivaled value proposition gives

us a vast market opportunity. We developed a detailed bottoms-up estimate

on that market opportunity. It's based on looking at the actual number of

companies, the specific roles within each company, and the pricing for the

appropriate products for that role. Using this approach, we estimate that the

market opportunity for technology is about $55 billion. The opportunity for

supply chain is about $23 billion. Marketing adds another $25 billion. HR,

$14 billion; Finance, $24 billion; Sales, $38 billion; and Legal and Other adds

another $19 billion.

In total, we estimate that the combined market opportunity for all 9 functional

areas is almost $200 billion. Now this compares to today's contract value of

about $3 billion. This means we can grow at double-digit rates for a very long

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time. Over the past decade, we've developed the Gartner formula to drive

long-term, sustained double-digit growth. The Gartner formula has 4

elements to it: indispensable insight; exceptional talent; sales excellence; and

enabling infrastructure.

And then for all of these, we drive globally consistent execution of best

practices and continuous improvement innovation to sustain and accelerate

our success. Now this is our formula for long-term, sustained double-digit

growth, and it's how we're capturing our vast market opportunity. The Global

Technology Sales, or GTS, represents about 80 percent of our research

contract value. Now we began developing the Gartner formula for GTS back

in 2005. And we've improved in that formula every year. Every year, our

research content becomes more insightful and more indispensable. And we

package these incredible insights in online products that are tailored to the

needs of individual roles.

We hired and developed exceptional talent. We grew our sales force at a

compound annual growth rate of 13 percent per year over the last decade, and

this provided a great foundation for long-term, sustained double-digit growth.

We developed sales excellence with ever-better training, tools and processes,

and we call this the sales excellence playbook. We support our salespeople

with ever-improving infrastructure, such as recruiting, contracting and service

delivery. The result, contract value grew at a compound annual growth rate of

13 percent per year. Now that's a track record of long-term, sustained double-

digit growth.

Consistent application of the Gartner formula is what's driven this sustained

success. Now to achieve this sustained success, our new salespeople need to

learn the sales excellence playbook. We of course have world-class training

programs but learning the sales excellence playbook isn't easy. Now our GTS

salespeople sell to large, medium and small accounts. They're located in

countries around the world. Some are account executives who grow our

existing clients. Some are business developers who sell to prospective clients.

So here's an example for experienced U.S.-based new hires that are account

executives. Now these salespeople take about 3 years to reach full

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productivity. The right-most bar shows third-year productivity indexed to 100

percent. In the first year, they sell about 48 percent of full productivity, as

you can see in the left-most bar. In the second year, it's about 83 percent.

So that's an example of U.S.-based new hires who are account executives.

The other types of new salespeople also have similar learning curves. So the

sales excellence playbook is incredibly effective for driving long-term,

sustained double-digit growth, but it does take time to learn.

Now looking forward, we'll keep developing new innovations and making

continuous improvements to the Gartner formula. We'll focus on relentlessly

consistent execution of best practices that drive success, and we'll continue

getting better, faster, stronger each and every year. You're going to hear more

about GTS from the extraordinary leader of that team, Joe Beck.

Now Global Business Sales, or GBS, represents about 20 percent of our

research contract value. The GBS sales organization supports all the

enterprise functions beyond IT.

Now each of these roles has the same need for our services as an IT. GBS

includes the supply chain practice, which we established at the end of 2009

through the acquisition of AMR. We applied the Gartner formula to supply

chain. We introduced Gartner for Supply Chain Leaders, and our supply

chain business had a compound annual growth rate of 23 percent per year over

the last 9 years. And GBS also includes Gartner for Marketing Leaders,

which we started organically back in 2012.

We applied the Gartner formula to marketing. And our Gartner for Marketing

Leaders business had a compound annual growth rate of 76 percent per year

over the past 6 years. Now GBS now includes HR, Finance, Sales, Legal and

more. So in 2017, we began building foundation for long-term, sustained

double-digit growth in these new enterprise functions. And of course, that

foundation is the Gartner formula.

We developed indispensable insights, combining legacy business content with

relevant Gartner IT content. We delivered these indispensable insights in

products for business leaders across the enterprise. We refer to these products

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collectively as GxL. Gartner for Marketing Leaders is GML. Gartner for

Finance Leaders is GFL. Gartner for Sales Leaders is GSL, and so on. Now

GxL products deliver sustained growth compared to legacy products. They

provide greater value to clients because they're tailored to client's individual

needs. And this, in turn, results in higher prices per user and stronger

retention.

Now beyond better pricing and retention, GxL products provide exponentially

more growth opportunities because we can sell these high-value products

throughout our clients' organizations.

Beyond indispensable insights, we hired and developed exceptional talent.

Last year, we grew our sales force 23 percent. We implemented the same

training, tools and processes as those in GTS that have led to ever-improving

sales excellence there. And we further supported our salespeople with the

same enabling infrastructure that we have in GTS. The salespeople in GBS

have a learning curve in adopting the Gartner formula just like in GTS. To

build the foundation for long-term, sustained double-digit growth in GBS, we

made significant changes. We restructured the organization. We reconfigured

contract terms and conditions. We eliminated discounting. As I just

mentioned, we introduced a new suite of products that we collectively call

GxL. Now these products were rolled out and salespeople trained during the

first half of 2018, as you can see on this chart. One way to think about it is

GBS salespeople and their managers were in their first year with Gartner in

2018. They were like new hires.

Now this chart shows the sales of the new GxL products, HR, Finance, Sales

and Legal, from when we began piloting them in late 2017.

You can see the learning curve as our sales force was trained and gained

experience in selling these new products. Now every GxL product is gaining

momentum. These charts show the cumulative bookings of the new GxL

products. We've indexed the 2018 ending value to 100 so you can more

clearly see the growth trend. HR, Finance, Legal, Sales, they are all

accelerating. As the GBS sales force continues to gain experience selling the

GxL products, we expect that acceleration to continue.

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To summarize, we're applying the Gartner formula across GBS. We're

delivering indispensable insights through our GxL products. We entered 2019

with a richer mix of GxL products, which have higher retention. We have a

23 percent larger sales force with exceptional talent. And that sales force is

further up the learning curve on the sales excellence playbook. And we've

invested aggressively in the enabling infrastructure to support our talented

sales force. This is our path to long-term, sustained double-digit growth in

GBS. So here's what you should take away from my remarks. We're living in

accelerated times. Enterprises need to constantly evolve to get ahead of the

competition.

Leaders across the enterprise need help. They need help with their make-or-

break initiatives, and Gartner is the best source of that help. We have an

indispensable, unrivaled value proposition, a vast market opportunity, and

through consistent execution of the Gartner formula, we know how to capture

that opportunity. We applied the Gartner formula in GTS and delivered long-

term, sustained double-digit results. We're applying the same Gartner formula

in GBS and expect to achieve long-term, sustained double-digit results

beginning in 2019. With a culture of continuous improvement and continuous

innovation, we get better, stronger, faster year after year. And we're in the

best position we've ever been in to provide sustained double-digit growth

across our key financial metrics.

To deepen your understanding of Gartner and our expanded research and

advisory capabilities, I'll introduce Mike Harris. Mike's our Global Head of

Research & Advisory. He's had various leadership positions across the

Research Advisory team for more than 20 years. Mike's a strong leader who's

driven substantial improvements in business results and client value measures.

So Mike?

Michael Harris: Thank you very much, Gene, and good morning, everyone.

Nearly two-thirds of CEOs and CFOs anticipate business model change within

the next 3 years, typically due to digital transformation in reaction to new

growth opportunities and competitive threats in their industries. Now these

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leaders often initiate significant change programs, which have a ripple effect

across the entire enterprise. So other C-suite leaders like heads of marketing,

HR, IT and supply chain then work with their leadership teams and their peers

to modernize the way the entire enterprise runs, changing the very way that

value is generated in the enterprise. Gartner's model is to provide

subscription-based, on-demand, indispensable research and advisory services

to help all functional leaders and their teams navigate precisely these types of

challenges.

Clients find our services so valuable because of a combination of 3

fundamental things -- expert advice, the ability to speak with our over 2,000

global experts on a variety of critical topics. Because that advice gives them

the confidence to make better and continuous decisions. The subscription

model provides ongoing access to the insights needed by leaders and their

teams on a step-by-step basis and on-demand response through already-

published research content, data and benchmarks. Leaders need that insight,

and they need that data.

For example, about two-thirds of marketing leaders say that access to data,

metrics and advice are critical for their role. But you all know there's no

shortage of information out there. Executives try to access as much

information as possible, but that has an opposite effect. They have access to a

huge volume of information, but the sheer volume of it is overwhelming and

often conflicting, increasing the uncertainty about the best path to follow for a

given decision. Now our research shows that executives who are presented

with lots of unsynthesized and conflicting information frequently make the

wrong decision.

Their probability of getting it right is no better than a coin toss. One client of

ours is a senior IT leader in the U.S. federal government. He'd been

overwhelmed with different perspectives on if and how he should move his

applications to the public cloud. And he told us that what he valued most

about working with Gartner was our ability to synthesize the information he

needed and to distill it into a clear action plan and, critically, that the

recommendations that we made were from an independent organization with

no downstream business influencing those recommendations.

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So in an era where information is so abundant, access to truly independent,

unbiased and expert advice on the most critical priorities facing an executive

is extremely valuable. That need for independent, objective advice about how

to run a function to improve the odds of making a good decision better than a

coin toss applies to every functional leadership role across the enterprise. And

these functional heads, they know that their jobs, frankly, and their careers,

are on the line when they're running their function. Every decision counts

about strategy, talent, technology, budget.

And they need to demonstrate performance or frankly, their CEO will replace

them. Because at any given time, more than 1 in 5 C-level executives are in

their first year in role, and 46 percent of all executives underperform relative

to their performance goals for the first 18 months of their tenure as head of a

functional unit. All executives and their teams, whether they're new to the

role or highly tenured, are faced with this constant change and daily complex

challenges that can impact the entire enterprise, and they come to Gartner for

the provocative ideas and pragmatic advice they need.

Now they certainly come to Gartner for technology advice, and technology is

a critical enabler of all enterprise functions, and I'll speak more about that in a

bit. But there are so many other factors within each function where clients

seek Gartner's advice. Let me give you some examples which come from our

own analysis of client interactions across all functions.

Take talent. It is a major challenge for everyone. CEOs have increased the

amount of time that they spend talking about talent on earnings call, with the

most commonly discussed talent issue being culture. Why? Because their

functional leaders are struggling to fill open roles to upgrade the talent pool

and to change the culture of their organizations. For example, fewer than 10

percent of finance leaders today employ data scientists. But within just 3

years, more than 1/4 will employ data scientists, and 60 percent will employ

data specialists. Organizational changes are also constant. In 2018, fully 1/3

of all heads of HR dealt with a company-wide reorg.

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In fact, 99 percent of them have dealt with at least 1 major organizational

change in the past 3 years -- acquisitions, divestitures, CEO transitions and

major launches of new technology or entering new geographies. When HR is

effectively supporting major change initiatives in the organization, the success

rate doubles. And most CEOs expect their HR leader to make these

organizational changes happen faster than they did 3 years ago. Customer

behavioral changes are also creating new challenges.

The number of stakeholders in business-to-business purchasing has roughly

doubled in the last 5 years, creating extended decision-making teams and

increasing the frequency of no decision. At the same time, the average B2B

sales professional has direct customer access for only about 5 percent of the

purchase experience. And these are just a few reasons why marketing and

sales leaders are coming to Gartner to get advice on how to manage the

multichannel customer experience, to build the right content marketing

programs and direct the sales force along very different customer journeys.

Chief supply chain officers have another set of challenges due to changing

consumer behavior. Millennial consumers are demanding a transparent

supply chain across the entire global ecosystem. Corporate social

responsibility and ethical sourcing are now top of mind for supply chain

leaders and CEOs alike, and not only for distinguishing their brand but also

for attracting investors. And every industry is being impacted. Apparel is

being asked about factory conditions and child labor. High-tech needs 0

conflict minerals in their devices. Food and beverage have to prove the source

of supply is safe and ethical, and life sciences has to deal with ongoing

counterfeit risks.

Gartner helps all these companies build sustainable ecosystems and powerful

brands. And then there's regulation. Leaders in every function face board-

level questions when significant regulatory changes take effect. For example,

tax reform here in the U.S. It's had real benefits in reducing corporate tax rates

and repatriating overseas cash, but finance executives seek expert advice on

how to properly communicate these changes in SEC filings and annual

reports. So recently, we republished -- we published a pragmatic set of

research, sharing extracts of 10-K disclosures regarding U.S. tax reform for

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multiple companies, like Schlumberger, eBay and United Rentals, Inc., to help

other companies communicate their own disclosures.

Talent, organizational changes, customer behavior, regulation, all of these

things are underpinned by technology. Our CIO, IT leader and technical

professional clients come to Gartner seeking provocative ideas and

approaches to help them adapt to all of these changes, and they also come to

us for pragmatic advice on how to benchmark their maturity levels and costs

against peers so they can continuously improve their speed, agility and

efficiency. And now, we can help CIOs and their teams better engage with

their C-level peers on issues that extend well beyond IT.

In our GxL products, we include relevant technology research for heads of

sales, customer service, finance, marketing and so on. The content needed to

digitalize those functions and select, implement and manage functional tech.

In our symposium keynote just a few months ago, I said that leaders in all

functions apply technology and information in unique and creative ways to

outperform their peers. For instance, the chief sales officer is not only

involved in the selection of the CRM system, they're often the primary driver.

And while 27 percent of finance teams are currently making use of advanced

analytics, that number is expected to triple within 3 years. In marketing,

technology spending has grown incredibly quickly to where it's now the single

largest area of investment for that function, even more than the labor budget.

So how do we know all this? Because we research all of these functions, and

we quantify and benchmark executive performance to help our clients

outperform their peers.

We conduct literally hundreds of thousands of one-on-one conversations

every year, most held remotely over video and content-sharing conference

calls and some held face-to-face during our conferences. And we analyze the

millions of content pieces searched for and accessed on our Web Site.

Every function across the enterprise has enormous pressure to transform, to

respond immediately to internal changes and external shocks and to

continuously improve their teams to benchmark competitors to stay ahead.

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And they turn to Gartner for the singular combination of expert advice, the

confidence to make better decisions continuously and to get those things on

demand just when they need it. We stay abreast of the latest things that are

happening in enterprises, large and small, in the public and private sectors and

all around the world in every industry. And we shape our content and

resources to meet those needs.

So information overload. Talent and organizational changes, shifting

regulations and customer behavior, they all add up to constant change for

every senior executive, which means that every functional leader is in urgent

need of indispensable insights, advice and tools to achieve their mission-

critical priorities and outperform their competition. The one company that is

best able to address that need Gartner.

Now let me show you how Gartner helps clients by sharing with you a year in

the life of a representative HR executive whom we'll call Maria. So it's week

6 on the job for Maria. She's recently been named the new Chief Human

Resources Officer for XYZ Precision Manufacturing, a multibillion-dollar

company that produces precision metal components for the aerospace,

industrial and agricultural industries. So as Head of HR, she's responsible for

recruiting, talent development, performance management, compensation and

benefits and a host of other activities that are essential for running the

business.

She has managers with teams of people underneath them leading each of those

key areas. Now as she's settling in to her new role, she engages with Gartner

on campus recruiting because she needs a lot of new engineering talent to

support the company's growth plans. So Maria goes to our Web Site, finds

several research reports online, including ones detailing the career aspirations

of Generation Z and how-to guide for building on campus recruiting program.

She reads those 2 in detail and has some questions about how she'd apply this

to her particular environment.

So she e-mails Gartner and says she'd like to speak with one of our experts on

the topic. The next day, she's on a video conference call with the expert we've

identified who shares content on how she can best address her issues. But as

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we all know, priorities change rapidly. So what if the Chief Operating Officer

resigns unexpectedly for health reasons. In that situation, Maria suddenly has

a new and more urgent challenge.

In addition to her other responsibilities, she now has to throw herself full tilt

into finding and hiring a new COO. She needs expert advice, and she needs it

right away. So she turns to Gartner, and we provide her with our succession

management playbook. That helps her identify candidates, work with the

Board of Directors in the hiring process and quickly onboard the successful

candidate.

But in parallel, Maria's understaffed recruiting team is still struggling to hire

that engineering talent needed, since as you know in the U.S., there are

currently more open jobs postings than there are candidates who are actively

looking. So Maria has her Head of Recruiting engage with Gartner to access

our Big Data solution for planning and recruiting, TalentNeuron, which

provides her the analytics her recruiting team needs to understand where to

find the hidden talent pools for the experienced hires the company seeks.

It specifies the compensation and benefit levels that are needed to attract that

talent and, therefore, speeds the average time to hire through more targeted

recruiting activity. And throughout the year, Gartner continues to help Maria

with the ongoing critical functions of her HR operation. In fact, Maria and her

leadership team attend the Gartner conference ReimagineHR to hear the latest

thinking on these topics and in ways that HR can drive leadership

development. But then, what if XYZ Precision Manufacturing announces an

acquisition?

The company now needs to be completely reorganized to integrate teams,

brands and infrastructure to realize anticipated cost synergies. And clearly,

that's not just up to HR. That requires intense coordination with other

functional leaders, such as the CMO and the CIO. Maria still needs advice on

new operating models and how to blend 2 very different cultures. She has to

assess how long to keep the acquired company's brand, how best to transfer

the equity to the newly combined entity and what the new combined corporate

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brand ultimately should be. The CMO also is deeply involved in the

integration.

Now he needs a master data management strategy to manage customer data

sets from both companies because he wants to avoid sending competing

pricing for overlapping products to a single customer and also look for cross-

sell and upsell campaign opportunities. So he brings in the CIO to the

conversation to discuss a master data management strategy. Well, meanwhile,

the CIO also needs to figure out how to consolidate 2 payroll and accounting

systems. Each of these leaders calls on Gartner for help, not just for

themselves but for members of their teams who haven't gone through a major

acquisition before.

By watching prerecorded webinars, reading published content and having one-

on-one conversations with Gartner experts, team members entitled to our

research and advice rapidly accelerate their M&A knowledge base. They can

also better coordinate with other functions all across the company. Now I

could go on, but you get the idea. Functional leaders today have a wide array

of critical operational issues that they have to deal with every day to keep the

business running.

And at the same time, there are multiyear priorities to be managed and

numerous events that crop up unexpectedly that they have to solve very

quickly, either with their own teams or in collaboration with other C-level

leaders in the enterprise. Gartner is there to support them in every case with

provocative, innovative ways to transform their business and solve their most

pressing challenges as well as with pragmatic and practical tools and advice to

help them execute. All delivered on demand through our subscription

services.

So how do we do it? How does Gartner generate the insights and advice for

15,000 enterprises day in and day out for Maria and every other client? Well,

let me first explain how we structure our products such as Gartner for IT

Leaders, Gartner for Sales Leaders or Gartner for Marketing Leaders. We

identify the target client roles including the C-level functional leader and their

leadership teams. So for sales, that would mean the Chief Sales officer, sales

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operations, territory planning, strategy and division heads. Then using extra

market research and the years of knowledge accumulated by researching each

of these roles, we prioritize the content that we produce on the topics that are

most critical for our clients and prospects.

In our recently launched GxL products, we've made several enhancements to

legacy offerings. We brought together all relevant research for each

functional leader, combining content from several leadership councils to

provide the integrated insight the leader and their teams need to execute on

their priorities. We then enrich the products further with technology content

that's relevant for each function such as a CRM for sales and marketing

leaders, for example. And then we've added new additional research to help

drive cross-function priorities such as digital transformation, cost optimization

and talent. And all of this is targeted to individual seat holders with more

service and greater value.

And for every topic that we cover within each product, be it talent assessment

or digital transformation, we ensure that our content is provocative, helping

the client see something differently and take action, such as envisioning a

major digital transformation. And pragmatic, helping clients with practical

guides for how to execute like a job description for a new data science talent

needed to drive that digital transformation. We share content methodologies

across functions for scale and consistency. For example, we've developed

maturity assessments for every function. These help functional leaders and

their teams benchmark how advanced or immature their operations are, and

then identify the specific steps needed to progress, say, from a level 3 to a

level 4. We recently worked with a utility company to benchmark its

operations and figure out how to cut costs by 10 percent company-wide over

the next 3 years. Now because of our benchmarking and proprietary database

of more than 1,000 cost-saving strategies, the company is now on track to hit

its savings targets.

Our clients really value our proprietary benchmarks, like our annual audit fee

benchmark or our methodology to benchmark digital brand performance

called Digital IQ.

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Let's take a look.

(Video Begins)

Female: L2's Digital IQ Index is a tool for brands looking to benchmark their digital

performance relative to peers. The Digital IQ measures brands across 1,250

data points across four dimensions -- site and ecommerce, digital marketing,

social media, and mobile. Brand scores are indexed to an average of 100 and

assigned into one of five classes -- genius, gifted, average, challenged, and

feeble.

Our published research reports provide a robust overview of online

investments across a sector, including best practices in case studies. In the

customized deep dive, our client strategy team delivers brand specific insights

to your organization's leadership team. In the two- to three-hour presentation,

we go a layer deeper into the data, looking at where your brand is strong and

weak and make both strategic and tactical recommendations that feed directly

into your annual roadmap.

The Digital IQ offers brands a way to hold their team and vendors accountable

and provides a framework to shape capital allocation decisions.

(Video Ends)

Michael Harris: I heard a few of you chuckle at the idea of rating a client feeble in the -- on the

IQ scale. And it's a true, that gets client's attention, but it is a fantastic way to

focus our engagement on those areas in greatest need of improvement. There

are other methodologies as well. Consider our best practice methodology.

When people use the phrase, best practice, often what they're really talking

about is common practice, the approach that most organization views for a

function or process. In our approach, we focus on what is truly best practice.

That is what the top 10 percent of organizations do differently to achieve

exceptional results. Methodology involves extensive quantitative analysis of

business results and correlation to specific practices. We then break down

those truly best practices into modular steps that other companies can follow,

which is perfect for disrupting established practices with new insight.

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We're also applying the Magic Quadrant methodology for vendor selection

into areas beyond IT. One of our more popular examples is where we help

supply chain leaders choose third-party logistics providers. And using all of

these models in each of our practices through modular and repeatable methods

affords us operational scale, and more importantly, a consistent platform for

C-level executives and the teams to continuously improve their functions and

continuously adapt to whatever comes next. We built a similarly scalable

platform for service delivery. And as I mentioned earlier, we have hundreds

of thousands of one-on-one conversations with clients every year, and those

clients have access across our areas of expertise.

We use machine learning algorithms to identify the right expert to take a

client's call. The algorithm takes into account an analyst profile, along with

data on all prior advisory sessions that they've had. So we identify the best

available resource for every client question, and then we feed back into the

algorithm the topics that were covered on that call as well as the client's

satisfaction level to direct more calls of a similar nature to the best-equipped

Gartner experts.

And when the decision is complete, we guide the client on what they should

do next. We provide links to relevant research that delve deeper into the

discussion topic or are we direct them to another expert in a related area to

continue the discussion. We do this on common platforms for all functional

areas, enabling a 360-degree view of all the functions in an enterprise. No one

else is able to have this kind of scalable content and advisory service for any

role in the enterprise. And yet, we're doing it across the entire C-suite.

And we're delivering significant results. We literally have thousands of

testimonials from satisfied clients, the clients often noting time saved and

money saved. For example, "Gartner paid for itself in 15 days, saving $2.1

million in inventory alone." Project acceleration is often cited as a key benefit

as this client reported, "The value that Gartner delivered to us was speed,

focus and access to best practices." And I like what this Chief Supply Chain

Officer said and how they succinctly summed up the value that we delivered

by saying, "Gartner offers the total one-stop shop.

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Frankly, we are better because of Gartner." Every team, in every function, in

every enterprise faces dynamic challenges every day. Continuously

improving functional performance is an ever-present need. Layer onto that

disruptive events and transformations and you see why Gartner is such a

valued resource for insight and advice on how to provocatively approach a

challenge in a new and different way or how to pragmatically accomplish

critical activities to save time, money and to speed up the operating tempo of

the organization.

And we continue to build our platform. The content methodologies for

maturity, digital performance and vendor selection, the service technology to

rapidly route client queries to the best available expert and the indispensable

insight to provide unrivaled capability to help all functional leaders and their

teams anticipate, adapt and act.

Now let me turn it back to Gene to introduce our sales leaders. Thank you.

Eugene Hall: Well, thanks, Mike. So you just heard how our research team provides senior

leaders in all major functions across the enterprise with indispensable insights,

advice and tools. These indispensable insights are at the core of the Gartner

formula for driving long-term sustained double-digit growth.

Now I'll introduce Joe Beck, who runs our Global Technology Sales

organization. Joe came to Gartner through an acquisition back in 1997. In the

20-plus years since then, he's held various roles of increasing responsibility

within sales. He's been instrumental in creating and evolving the Gartner

formula. Joe's going to give you a vivid picture of how we're using the Sales

Excellence Playbook to drive long-term sustained double-digit growth. Joe?

Joe Beck: Thank you, Gene. Thank you, Gene, and good morning, everyone. In my role

as Executive Vice President of Global Technology Sales, or GTS for short, I

have the privilege of leading a strong and passionate and best-in-class sales

organization that knows how to leverage our proven practices to drive growth.

Today, I'll talk about why we have just delivered the best year ever for global

technology leaders and how we will continue to deliver strong sales

productivity while growing at double digits.

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First, a brief summary of our Global Technology Sales organization. GTS has

$2.5 billion in contract value, 80 percent of Gartner's total CV, and is

comprised of roughly 3,000 sales professionals, who sell our indispensable

research into nearly 13,000 enterprises in more than 100 countries around the

world. Our strategy continues to be to sell to and serve every level of the IT

organization, from the CIO down to the tech professional. We understand the

business priorities of the team and how they translate into initiatives for every

individual on that team.

Starting with the CIO. Our salespeople work diligently to align our IT

expertise to their specific business objectives. We then expand to the

members of the CIO's direct team, and then broadly into the organization to

help them execute. This proven strategy enables us to deliver incredible value

to unique individuals and then their team members, effectively expanding our

overall opportunity within an account. All of this is substantiated by the fact

that most, a full two-thirds, of our new business comes from existing

accounts. While the results show that this account expansion strategy works,

we have only just scratched the surface.

On average, GTS clients have only 5 or 6 seat holders in their IT organization,

yet there are 7 clearly defined departments in IT with leaders in charge of

each, like the head of data and analytics or the head of security. And in many

of the IT organizations we sell into, there are hundreds of people under each

of those leaders. Even our midsized clients have full teams under those roles.

The opportunity is there on org charts with names and boxes and that's just

with our 13,000 enterprises that are clients today.

We have identified over 138,000 enterprises that can and should be our

clients. If we count enterprises with even just one seat holder, we're only

working in 9 percent of the available enterprises. We know the organizations

to target. We have a winning strategy for selling to them and we can

confidently position our value proposition to every level of the IT

organization. This is why GTS can and will continue to grow at double-digit

rates.

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Every year, we get better, stronger and faster in capturing this opportunity and

our outlook for the future is very strong because the GTS team knows that

Gartner formula inside and out. We have reaped the benefits of this formula

for years and are completely committed to the relentless execution of the

sales-focused plays, specifically indispensable insight, exceptional talent and

sales excellence. Of course, this is all built upon research and advisories' long

track record of continuously meeting the needs of CIOs around the world.

The products we sell target Gartner's provocative and pragmatic insight that

Mike just mentioned to improve the outcomes of any IT organization's

initiatives. And in lockstep with our sales strategy, these products are tailored

to specific roles. Whether a global CIO who's billion-dollar IT transformation

will dictate the future health of their business or the IT leader establishing a

cybersecurity plan for a government in thriving emerging markets or the

working team, managing an ever-expanding cache of business data.

Regardless of their role or their initiatives, when IT leaders face tough

challenges, Gartner has a proven product designed for their role to support

their unique needs. Absolutely no one else provides our level of insight and

advice, no one.

Like our indispensable insights, hiring exceptional talent is a critical element

of how sales leaders execute on the Gartner formula. As you know, this is one

of our largest investments, and we are incredibly selective in our hiring

process. For every 100 sales applicants, we hire fewer than 3 people. And

over the past 10 years, we have increased sales capacity by 13 percent, which

is directly in line with our 10-year CV growth rate. In 2018 alone, we grew

GTS headcount by 15 percent.

GTS is a diverse group with a balanced global footprint. We call on all

industries in every region of the globe in every sized enterprise. Gartner as a

highly collaborative culture, using leading-edge tools and best practices. Our

growth translates to unparalleled upward mobility opportunities for our

people. We offer a truly special kind of sales opportunity that talented and

successful people crave -- a performance-driven compensation plan, the

ability to strategize with C-level executives and work alongside some of the

brightest minds in technology.

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It's not surprising that Gartner is regularly recognized as a best place to work

and that associate referrals lead to an amazing 30 percent of our sales hires.

These are all strategic advantages as we continue to attract top talent for many

years to come.

So we have the indispensable insight. We've got exceptional talent on board.

How do we leverage them to capture that market opportunity? And that's

where the sales excellence part of the Gartner formula comes in. We capture

and continuously improve our best practices over the years, leading to a

dynamic and detailed Sales Excellence Playbook that is designed to ensure we

execute the best practices consistently across the globe.

And when I say Sales Excellence Playbook, I don't mean just any playbook.

Let me draw an analogy. And since I played college football, the analogy I'll

use is an NFL coach's playbook, but not just any coach. Imagine joining a

team and being handed Bill Belichick's Patriots playbook, the one that year

after year leads to playoff and Super Bowl wins. Sure, it's going to take time

to read, learn and master, but you know that everything you need to win the

Super Bowl is in that playbook. That's what the Gartner Sales Excellence

Playbook means to our people.

In fact, let's hear from some of our GTS salespeople on what makes our

proven approach so impactful.

(Video Begins)

Male: (Ray) has a 10-year plan in a spreadsheet that lists how we are going to double

(NCVI) every year and meet the goals long-term for this team. We don't

question whether we're going to meet the plan; we figure out how we're going

to meet it. Get (an org) chart, be a power, confirm value in the client's voice,

use engagement plans, create urgency, and close the business.

Female: The conversations that are required to accomplish that will give you the

insight that you need to understand not only the organizational goals but also

the tactical struggles on the front line. That depth of insight is what you need

to justify a larger investment in Gartner.

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Male: We know what our goal and vision is two years out so we make the territory

plan and design headcount growth to achieve those goals well in advance. We

get a lot of value out of our new AEs because we invest a lot of time up front

with them to help them use the tools that they've developed at Academy and

apply value to each of their clients in the field.

Male: It's clear from day one what the expectations are and the actions that will

deliver results.

Male: This is the greatest place in the world, it's got a great culture, and I love what I

do.

Male: We know there will be bumps in the road but we also know what the right

things are to do to keep getting these results. We tell our new hires, we tell

our team, there's room for growth. There's room to raise the bar and take

things to the next level.

Keep doing those right things and the results will follow.

(Video Ends)

Joe Beck: This level of execution across GTS is why we have achieved meaningful

increases in our sales productivity and double-digit growth year after year.

Our teams know what exactly what to do when it comes to recruiting, training,

using tools and applying best practices. This is GTS' proven approach to

future success. We start by recruiting top talent into territories optimized for

success. And in 2018, our investments in recruiting and territory planning

paid off. Accelerating headcount required significant investments in

recruiters, with systems and training to ensure sales maximize the benefit of

these great resources.

As I mentioned earlier, in 2018, we grew over sales headcount by 15 percent

and reduced the number of open positions to a record low. Open territories

mean that no one is selling into those accounts. So this is a big deal for 2019

and will lead to increased productivity. Innovating this approach was a

multiyear journey for GTS that will yield better results each year.

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We also invested in a world class territory planning function that identifies

exactly the right places to put additional salespeople. This capability is

systematically prioritizing the enterprises where we can capture the most

opportunity, both within existing accounts as well as those enterprises that

don't do businesses with us today. Expanding our sales capacity and

executing on a rigorous recruiting and territory blueprint means better

coverage on our clients and more people engaging with future clients. And to

ensure we nurture and develop our exceptional sales talent, we offer best-in-

class training programs with proven team of tenured trainers across the globe.

In GTS, we know it takes most salespeople 3 years to get to full productivity.

This 3-year ramp, peppered with various training experiences, has been

consistent over time. In the first year, our new hires need to be taught the

playbook. They begin to learn but are not fully productive. In the second

year, they improve their skills along with their confidence and conviction and

sell more. By the third year, they have mastered the playbook and are

producing like a veteran player.

The ramp-up begins with a 6-week sales academy, which is focused on the

best practices for driving retention and growth. This investment in getting

new hires off to a good start is important and has resulted in material

improvements in new hire productivity. And every year, we're piloting

innovative approaches to getting new hires up the learning curve more

quickly. By the time our new salespeople take on a quota-bearing role, they

are set on a path to fully understand the economics of our business and how to

execute sales -- the Sales Excellence Playbook.

We have also committed significantly in sales training throughout their tenure

to ensure the latest best practices are consistently executed throughout the

world. We also know that having the right set of tools is instrumental to

driving productivity and improving that ramp-up Gene talked about. Our

enabling infrastructure allows our sales teams to have access to a robust set of

proprietary sales tools that are specifically architected around our best

practices. In our sales excellence playbook, it is crystal clear about when and

how to use those tools to maximum effect. Used daily, these tools guide new

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and tenured salespeople to the most productive activities for each sales cycle.

The incremental investments we made in tools during 2018 are already

helping us to prioritize and engage with new prospects.

With 36 quarters of double-digit CV growth for Gartner under our belt, our

sales force knows what to do to be successful. Our best practices are

ingrained in every touch point with sales. And with our focus on continual

improvement innovation, we are always updating and evolving our playbook.

This has become a massive advantage for GTS and for Gartner and our

opportunity is to continue to improve execution on what we know works.

All of these chapters in the sales excellence playbook allow us to disseminate

the known best practices across all of our sales teams. We only recruit people

who can deliver on what we know works. We train them on the right things,

and we build tools to make the pathway to success as easy as possible.

Moving into 2019. We have a series of strong advantages, unrivaled solutions

for every environment and every role of an IT organization, from the CIO and

their direct reports down into the organization; strong trust-based relationships

with our existing 13,000 enterprises; we have a tremendous market

opportunity; a proven strategy for growth; and hundreds more salespeople

attacking that opportunity. All of this will enable GTS to grow double-digit

rates in 2019 and beyond. Thank you.

Eugene Hall: So thanks, Joe. Joe just described how we built the strong sales capabilities

that are fundamental to the Gartner formula, and our execution of these

capabilities is going to continue to drive long-term sustained double-digit

growth.

I'll now introduce Chris Thomas, who leads our Global Business Sales team. I

mentioned earlier this team works with the enterprise functions that are

beyond IT. Chris has been a member of our executive team since 2013, and

he's led GBS since it was formed in 2017. He also has a long history with

Gartner. He's been with us for 19 years. Throughout his tenure, Chris has had

various roles of increasing responsibility in our sales and in our service

delivery teams. Chris helped write the Gartner Sales Excellence Playbook.

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And using that playbook, he's led technology, supply chain and marketing

teams to long-term sustained double-digit growth. And Chris is going to share

how his team leveraged the Gartner formula in 2018 to build the foundation

for double-digit growth in GBS in 2019 and beyond. So Chris?

Chris Thomas: Thank you, Gene, and good morning, everyone. Today, I'll share more detail

on our GBS journey, the significant progress we made in 2018, building the

foundation for acceleration and how that progress now allows us to deliver on

our promise of long-term sustained double-digit growth. We know the right

things to do. You just heard about many of them as they're driving GTS'

consistent double-digit growth. They're the same right things that are behind

the success of heritage Gartner supply chain and our marketing teams, both of

which are now part of team GBS.

The Gartner formula works. During 2018, we applied this proven formula

across the entirety of GBS to accelerate our CV growth and it's paying off as

I'll share over the next few minutes.

First, a brief summary of our Global Business Sales organization. With $600

million in contract value, GBS represents 20 percent of Gartner's total CV.

We now have a team of roughly 800 quota-bearing salespeople with 5,400

client enterprises. GBS sells into all functions across the enterprise beyond

IT. And our strategy is to target the C-level across the function we serve and

then expand into their teams. Our 5,400 GBS client enterprises represent only

4 percent of the 138,000 addressable enterprises.

Our market opportunity is untapped across all functions, roles, geographies

and industries, giving GBS a long runway for rapid and sustained growth

ahead. HR, finance, sales, marketing and supply chain, each have the

potential to have contract value well in excess of $1 billion.

The Gartner formula is the foundation of our double-digit CV acceleration.

That's why, in 2018, we moved rapidly across GBS to put the various

elements of the formula in place. We leveraged the many strategic

investments in enabling infrastructure, and then we put a special emphasis on

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implementing 3 key areas of the formula -- indispensable insight, exceptional

talent, and sales excellence.

So let me talk a little more about each in turn. Gene and Mike both shared the

compelling and immediate need across all roles and functions for Gartner

support and insight in their decision-making. In the first half of 2018, we

launched GxL products across the largest GBS functions including HR,

finance, sales, legal and service to better address these needs. These added to

our already existing GxL products in supply chain and marketing. And over

time, we'll add more GxL products for other roles that we serve.

As Mike shared, these products provide significantly greater value to clients

with a powerful combination of practice-specific, research, technology and

cross-functional content as well as insight and advice tailored to the individual

needs of business leaders and their teams.

The reaction from our clients to these new GxL solutions has been

phenomenal. So I wanted to share the feedback from 2 of our clients, 1 from

sales and 1 from HR, as they talk about their experience.

(Video Begins)

Male: The big difference between the (seat) based and the leadership council

activities is actually the value we get. The tailored experience that we have in

the new engagement is significantly improved. I would say that it's probably

saving me in labor terms alone, about 1.5 FTEs in whole research, best

practice finding, designing new (things) -- all of those things added together.

We're quicker to a better starting point. It's hard to put a real number on it but

I would say it's probably five to seven times as much as the actual cost of the

license. That's one of the big differences I see between what we had before

and where we are today, is that the return on that investment, I'm paying more

today for the membership but I'm getting more return, faster.

Female: Our partnership with the staff here at Gartner really helped us hone in on what

were the areas of what we didn't even know yet. Things are constantly

evolving and changing and so what happened was I came out and said, we are

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really leaning into these areas, particularly around HR analytics, as well as HR

technologies. And this entire new world of additional research that I didn't

even know that was happening was presented to us and in a very timely

fashion, and it actually resulted in a deepening of our partnerships and an

expansion of (seats).

Today, we have three primary (seats) or points of contact that interact with the

company, but as a result of our recent dialogues, we're actually expanding that

to more of -- five primary (seat) model, and that would include both myself as

well as our head of learning, our head of talent acquisition, and then most

recently our head of analytics and HR systems.

It's a match made in heaven.

(Video Ends)

Chris Thomas: This feedback is consistent with what clients across all GBS functions are

telling us. And I hear the same feedback from finance leaders, legal counsels,

heads of diversity and inclusion and recruiting, customer service leaders and

more. These GxL products allow us to deliver significantly more value, in

turn driving much stronger retention. But the opportunity isn't just from

retention improvement. These GxL products allow us to provide more growth

opportunity as well because we can sell these high-value products throughout

our client's organizations and grow our CV in each account year after year.

We've seen this retention and growth uplift in supply chain, marketing and

GTS for many years, and we're announcing the same thing across the rest of

GBS, where we now have the GxL products.

Through the first half of last year, we then trained our entire sales organization

on how to sell these new offerings, while also putting in place our proven

retention programs and support. This transition was significant. Even our

tenured associates essentially became experienced new hires to Gartner as

they needed to learn an entirely new sales process and product set. Like all of

our experienced new hires across sales, they needed to learn the Gartner best

practices and it takes time for them to become fully proficient. With strong

training support, the team is moving rapidly up that learning curve with $100

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million of GxL new business sold in 2018 and a steep acceleration in the

second half across each of the new products.

Gene shared this slide, which shows the acceleration across the new GxL

products. Following the product launches and training throughout the first

half of last year, the learning curve was evident. From essentially a standing

start, we ended 2018 with over 90 percent of our prospect-focused sales

associates selling one or more GxL deals. Now even more encouraging, the

fastest acceleration we see is within the group selling multiple GxL deals in

2018. Demonstrating that once they sell one deal, they get it and now have

the confidence and capability to rapidly close additional deals. These results

and the trajectory into 2019 are proof that we've only just begun to scratch the

surface of the enormous market opportunity that we have across GBS with

these new products. But products are not the only place we're investing.

We're also adding exceptional sales talent to GBS, growing our sales force by

42 percent since the start of 2017.

This territory growth continues into 2019, while simultaneously accelerating

the learning curve of all of our growth hires to date as they now enter years 2

and 3 of their tenure. Our coverage model is based on that of GTS, but

customized for the unique needs of Global Business Sales. We

methodologically design territories and recruit the best sales people aligned to

the areas of greatest opportunity.

Sales professionals looking for great opportunity to succeed and build a long-

term career, they are attracted to Gartner and they are attracted to GBS.

Here's why -- a high-performance and highly collaborative culture; a vast and

untapped market opportunity; unmatched career development opportunities;

the ability to interact to the C-level and across the entire C-suite. All

combined with the power of the Gartner plan. These are all significant and

compelling advantages as we continue to attract and recruit top talent and

grow our team.

Now beyond these product and people investments in 2018, we also put a

significant emphasis on executing each element of the Sales Excellence

Playbook. As Joe shared, this detailed and ever-evolving playbook has helped

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GTS win the equivalent of multiple Super Bowls, delivering double-digit

growth year after year, and it will do exactly the same for GBS. There are

many chapters within the playbook and it's not easy to implement overnight.

We need to learn, practice and master the plays and adapt and innovate for

GBS wherever needed. GTS has been doing this consistently and it's

delivering results. GBS is now doing the same. We're seeing the impact and

we will reap the rewards in 2019 and beyond.

To support our growth, we've added significant recruiting and territory

planning capacity. The Sales Excellence Playbook is clear on what it takes to

consistently hire great talent, and we are now leveraging all of these recruiting

best practices across every part of GBS. Great talent still needs great training

to be the best they can be and to get them there faster. Throughout 2018,

we've worked to implement best-in-class training programs. And now the

same team that on-boards and trains GTS new hires also trains GBS new

hires. We follow the same 6-week sales academy process focused on the

Sales Excellence Playbook for retention and growth, with additional GBS

function-specific training, ensuring our teams know how to position Gartner

as mission-critical to finance leaders, HR leaders, sales leaders and so on, as

well as the same ongoing training to enhance mastery of their craft. This

combination is helping GBS new hires progress rapidly up the learning curve

and will ensure they deliver a strong productivity ramp.

Beyond implementing, recruiting and training proven practices and

investments, we also introduced a full suite of sales tools across GBS. These

tools are a key component behind improved sales productivity and accelerated

learning, and it was critical for GBS to have access to those same analysis,

coaching and prioritization tools. Again, this was a significant change

throughout 2018 and our salespeople and their leaders are continuing to ramp

their skills, while leveraging those tools to accelerate growth in 2019.

Finally, when it comes to retention and growth, we know what to do to win,

delivering indispensable, unrivaled insight through the right products, adding

and leveraging exceptional talent and consistently executing the Sales

Excellence Playbook.

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Our playbook is proven constantly evolving and highly effective when

executed well. GTS is showing just how powerful it is. We successfully

implemented the same playbook in our supply chain and marketing GBS

functions. We're now executing these plays across the rest of GBS and we're

seeing win after win here as well.

Moving into 2019. GBS has so many advantages compared to where we were

a year ago -- GxL products with expanded content to better address our

client's needs; a significantly larger and now more tenured team to sell and

renew those products; a strong retention outlook, thanks to a richer mix of

GxL in the CV base combined with a year or more of execution on our

retention programs; the GTS-proven recruiting practices, training programs,

productivity tools and best practices, all in place to now accelerate

performance; and that same vast untapped market opportunity in both new and

existing clients.

We know the right things to do. We did those right things in 2018 across

GBS to build the foundation for long-term sustained double-digit growth.

We're seeing really strong traction and a positive trajectory as our GBS teams

accelerate up that learning curve. We will deliver double-digit growth in 2019

and that will only be the start. Thank you.

Eugene Hall: Thanks, Chris. As you heard from Chris, we've been aggressively applying

the Gartner formula in GBS throughout 2018 to provide that foundation for

long-term sustained double-digit growth. We're now going to play a short

video to help you better understand our value proposition. Now the first part

of the video shows how clients actually access our insights on demand. And

the second half gives you a view into our peer community, how our clients

can interact with that peer community. Then after the video, we'll take a short

break.

We'll have some lunch for you outside. And then when we turn -- return from

the break, Craig Safian, our CFO, will share how the Gartner formula actually

connects to our business model. And then we'll be happy to take your

questions. So I encourage you to take advantage of the lunch break to connect

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with some our executive leadership team, which I introduced earlier and also

to network with each other.

So here's the video.

(Video Begins)

Male: The world has sped up, you have to stay ahead of change, stay on top of your

mission critical priorities, and you don't have a lot of time. Here's some good

news. You now have a faster way to access the power of Gartner.

Your new Gartner.com experience helps you quickly find the information

most important to achieving your critical priorities every time you log in.

Everything is organized in a scrollable smart news feed that delivers insight

relevant to your current initiatives and mission critical priorities.

Based on your profile, your tracks, and how you use the site, Gartner.com

continuously delivers customized content tailored to what you need now. And

the more you use it, the smarter it gets. As you explore initiatives tied to your

business objectives, the site learns about what content is most timely for you

and posts more of it directly to your feed.

By clicking into an initiative, you can see how it aligns to your priorities. You

can choose the Start This Initiative feature and customize related topics within

the initiative you want to track. After that, your feed will automatically keep

you up to date with the latest posts on your initiative and related topics. On

the right are My Tracked Initiatives. If your subscription includes access to

Talk With a Gartner Expert, you can schedule an inquiry here.

Reality Test With Peers connects you to the Gartner Peer Insights and Peer

Connect communities, where you can share challenges and solutions and learn

from your peers' real world experiences.

In addition to our standalone iOS and Android apps, the new site is built to be

mobile friendly. And remember, keep your profile up to date; it improves our

ability to understand what you care about right now. And as always, the

search function takes you right to the information you need.

GARTNER, INC.

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We hope you find the new Gartner.com experience faster, easier, and more

useful. Get started on your priorities today.

In a world where everyone has a voice, how do you know what's valuable and

what's simply noise? You play a critical part in the transformation journey.

And you're not alone. As part of the Peer Connect journey, you decide what's

important. Experience a new kind of collaboration and tap into an unlimited

network of qualified peers just like you.

You'll gain trusted insights managed by Gartner to ensure high value content

and build your own experience with each connection. We're the world's most

influential network of IT and business leaders and your trust is our top

priority. No hidden agendas, no sales pitch, transform your challenge into

value. When you bring your issue to the digital table, not only will you get

answers, you'll also provide solutions to peers with similar mission critical

priorities. Access our 85,000-plus registered members and browse more than

55,000 member contributions. Expand your network. Multiply your power.

Enhance your capabilities.

The future of leadership lies with Peer Connect. Discover more at

community.gartner.com.

(Video Ends)

Male: Ladies and gentlemen, please welcome back to the stage, Gartner's CEO,

Gene Hall.

Eugene Hall: All right. So welcome back. So I hope, you were able to take advantage of

the lunch break to connect with some of our executive team, and also to

network with each other. So now, our CFO, Craig Safian is going to illustrate

the fundamentals and economics of our business, and how the Gartner formula

actually connects to our business model. Craig's been with Gartner for more

than 16 years. And prior to becoming our CFO, he led Strategic Planning,

Corporate Development, and our corporate and business unit finance

functions. Craig being -- brings a unique combination of strategy, a deep

understanding of our business and its economics and finance and accounting

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leadership. He's uniquely talented from -- both strategically and

operationally, and his contributions to Gartner have continued to expand since

he took over as CFO 4.5 years ago. So Craig?

Craig Safian: Good afternoon, and thanks for joining us today. Earlier, Mike Harris told

you a story about Maria, a global HR leader. And all the interconnected

challenges that Maria has. I can tell you, from my own experience, that the

CFO and his or her team are going to be impacted significantly by those same

challenges. Whether it's the Head of HR, the CFO, the CIO, CMO, they can

all turn to Gartner for the insights and tools to help day-to-day priorities as

well as the unplanned obstacles that come up throughout the year.

Gartner helps by enabling leaders and their teams to make those decisions

with greater confidence and speed to greater outcomes for every enterprise

function. My role this morning is to talk about how we're delivering on that

value proposition through the lens of our financial and business model. I'll

cover how we leverage the Gartner formula and a powerful business model to

drive growth. How the combination of that formula and making smart

investments leads to double-digit top line, bottom line and free cash flow

growth. And how we deploy our cash flow and balance sheet to enhance

shareholder returns.

So as Gene addressed, who we are, what we do and how we succeed? All

stem from what we call the Gartner formula. We address our customers'

mission-critical priorities through indispensable insights. We invest in and

develop exceptional talent. We drive sales excellence in our sales -- we drive

excellence in our sales organizations, and we invest in a robust-enabling

infrastructure to support that sales effort and growth. These are all incredibly

powerful elements of our formula. But what really brings all this to life is our

relentless focus on globally consistent execution and continuously improving

and innovating every single thing we do.

So if our growth formula embodies who we are and what we deliver across

every line of business, it's our business model that generates the free cash flow

that allows us to reinvest in our business, return capital to our shareholders

and execute strategic value-enhancing M&A. It's a simple, yet highly

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effective financial model. And Research sits at the heart of it, as it accounts

for 80 percent of Gartner's revenue. This is a recurring revenue business with

very high renewal rates. We write a piece of research once, and we sell it over

and over, leading to high contribution margins.

In Research, we bill and collect ahead of recognizing revenue and delivering

services, and the business inherently has low capital requirements. And as

Gene pointed out, we also have our world-class conferences and consulting

businesses that directly complement and fuel our Research business. That's

how we're set up for long-term sustained growth. This powerful combination

of the Gartner formula and business model enables us to drive double-digit

percentage growth in contract value, revenue, earnings and free cash flow.

So with that framework in mind, what I'd like to do is take a closer look at

exactly how Gartner approaches growth and investments in our business. Our

growth potential starts with our market opportunity. As Gene showed you

earlier, we operate in a vast untapped market of close to $200 billion spread

across the enterprise functions we serve. We have a huge, huge runway in

each and every one of these functions, including IT. To illustrate, if you were

to take our current total contract value of $3 billion and grow it at a 15 percent

compound annual rate for 20 years, we'd have only captured 25 percent of

today's addressable market. And as we've shown, we've consistently

expanded our market opportunity through organic launches and M&A.

Here's how we think about driving growth and capturing that market

opportunity. Sustained growth in Research comes down to 2 primary levers --

growing our sales headcount and driving improvements to net sales

productivity. Levers, we know result in growth, which might sound simple

enough, but we've developed, iterated and honed numerous programs and

initiatives around each. With headcount growth, we're focused on recruiting

the best talent. Talent that has the best opportunity to be successful at

Gartner. We're investing in and building recruiting capacity and capability to

find that talent as well as innovating our training programs, so salespeople can

be more productive faster. We're planning and designing our territories, so

our teams are aligned to the greatest opportunity and plenty more.

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The other lever we have is sales productivity. We measure sales productivity

as the net contract value increase, or NCVI, per individual salesperson. We

calculate it for both GTS and GBS on a rolling 4-quarter basis, where the net

increasing contract value is the numerator and the number of salespeople at

the beginning of the period are the denominator. There are several ways we

improve sales productivity.

Joe and Chris went through all the details of our Sales Excellence Playbook.

It was created with the express purpose of driving sales productivity. That's

what drives Research growth. A combination of growing our sales force and

improving productivity, and we've successfully taken this approach with GTS

for a long time. Gene and Joe showed you how we've been growing our sales

force at a consistent 13 percent for the past decade. At the same time, we've

driven improvements to sales productivity.

Over the last 3 years, we've achieved consistent improvements to sales

productivity and as a result, contract value growth has accelerated from 12

percent to 13 percent to 14 percent. And as Joe highlighted, we're set up to

continue our CV growth. We've consistently grown this business at double-

digit rates and by continuing to leverage all the elements of our Sales

Excellence Playbook, we will continue to grow this business at double-digit

rates into the future. At the same time, we'll continuously improve and

innovate and ensure we make the appropriate investments to sustain that

growth.

And we're running the exact same plays for GBS. In GBS, we're growing

headcount. We're applying the Sales Excellence Playbook, which has built

the foundation for productivity improvements in 2019, and we're seeing GxL

contract value accelerate. 2016 and 2017 are obviously dominated by our

supply chain and marketing GxL contract value. But in 2018, we really

started to see the impact of our new GxL products. Growth in GxL is what

will drive us to double-digit overall CV growth in 2019, and even faster in

2020 and beyond.

We're confident in our ability to get GBS to double-digit growth for a number

of reasons. Notably, we have GxL and the growth rate has been accelerating.

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We have a larger sales force with 16 percent growth in 2017 and 23 percent in

2018, and they are all significantly moving up the learning curve. The richer

mix of GxL and a full year of our retention programs will drive higher

retention. We're leveraging the Sales Excellence Playbook, and we have a

vast addressable market opportunity.

With those advantages, we enter 2019 in a position of strength. Last week, on

our earnings call, we highlighted this sensitivity table to illustrate our path to

accelerated GBS growth in 2019, and I thought it would be helpful to briefly

touch on it again here. Let me show you one of the paths to 10 percent

growth. We enter 2019 with $594 million worth of GBS contract value at

2019 FX rates. A 2-point improvement in attrition, means roughly $149

million attrits in 2019. A 1 percent improvement in new business productivity

across our 790 salespeople equates to $209 million of 2019 new business.

That combination of attrition improvement and modest new business

improvement would yield 10 percent contract value growth for 2019. That's

just one of the paths to double-digit growth for GBS.

Again, Gartner is a growth company. We've been consistently delivering

double-digit top line growth, primarily by growing our sales force and

focusing on productivity. Our 2019 guidance and medium-term objectives

continue to reflect that. These are the same medium-term objectives we

shared with you last year. To sustain that double-digit growth, we know we

have to continue to make smart investments each and every year. We're

always pushing the business to innovate and improve in everything we do, so

we have more money to put back into the business to support and drive that

kind of growth for the long term. The largest investments we make are in

sales, but we're investing in all other areas of the business as well.

Let's just take a closer look at sales investment. We have a very successful

sales model, but there are 2 economic lags that impact the profitability of our

business. The first, which Gene, Chris and Joe covered is our sales

productivity ramp. We hire salespeople, they go through training, it takes 3 to

6 months for their first sale, 3 years until they're fully ramped up. So from

first hire to contract value, there is a productivity lag. As we sell the contract

value, we collect the cash shortly thereafter. That takes us to our second lag,

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which pertains to how we account for revenue and profit. While we get paid

shortly after the contract value is recorded, the revenue and profits get

accounted for over the next 12 months. That means there's a big lag between

contract value and profits. As the productivity ramps, CV, cash, revenue and

profits scale, everything scales except the cost of the salesperson, which

modestly grows as compensation increases.

In GTS, because we've been doing this for over a decade, we're primarily

impacted by the productivity lag. In GBS, we're impacted by both the

productivity and P&L lag. So we've hired the salespeople in GBS. We're on

the path to realizing the contract value and the revenue and profits will follow.

To understand how we garner returns from our investments, it's important to

understand all the inputs into our profitability. It starts with our revenue mix.

In 2018, Research made up 80 percent of total revenues. The remainder of

our revenues are split between our Conferences and Consulting segments,

which support and amplify our Research business. All of our businesses

generate strong contribution margins, but Research at 69 percent, is by far our

most profitable segment. Research is our largest business. It has the highest

contribution margin of our 3 segments, and it delivers consistent double-digit

growth with continued amazing growth potential for the future. That

combination drives our overall margin contribution of 63 percent.

Moving down the profit statement, we have our selling and G&A expenses.

We wanted to take the opportunity to provide greater visibility to the

components of our SG&A and help you better understand, how we think

about investing in these areas. Our SG&A splits roughly two-thirds of selling

with the balance being G&A. Taking it one level deeper, we have 3 distinct

sales teams within the sales expense line. GTS, GBS and the sales teams that

support our Conferences business what we call, GCS or Global Conference

Sales. As you'd imagine, GTS is by far the largest expense within sales,

making up close to 70 percent of our total selling expense. GBS makes up

just under 20 percent of the total with GCS approximately 5 percent of the

total and the balance in marketing and sales operations.

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Our G&A expense represents about 1/3 of our SG&A or about 16 percent of

revenue. The largest components of G&A for us are technology and real

estate, followed by HR and finance. We have been consistently driving

significant productivity out of our G&A functions to allow us to invest in the

enabling infrastructure we need to support our growth, most notably in

recruiting expense and facilities. In the future, we continue to expect to grow

G&A expenses at a slightly slower rate than revenues, providing ongoing

operating leverage that we can reinvest back into the business.

Let's walk through an example of all of that for our 2018 P&L. In 2018, our

contribution margins improved by around 60 basis points. This improvement

stem from a combination of improvements in margins to both Conferences

and Consulting and a continued shift in mix towards Research. I'd note that

we continue to drive investments within our cost of services. For example, we

launched a half dozen new GxL products. We're growing our analyst and

advisor capacity, and we're always improving the client experience. But we're

also always focused on continuous improvement and innovation, freeing up

expenses so that we can make the right investments to support growth.

When we break apart selling from G&A, you can see 2 different trends. First

that our continued investments in GTS, GBS and GCS negatively impacted

margins by about 140 basis points. Meaning these expenses grew faster than

revenues. While G&A positively impacted margins by about 30 basis points.

Meaning these expenses grew slower than revenues. The net was a roughly

50 basis point decline in adjusted EBITDA margins. All because of

thoughtful strategic investments in sales and the productivity and P&L lags

that we talked about earlier.

In 2018, we made lots of investments across the business. The largest

investment we made in dollar terms was in support of GTS. We grew GTS

headcount by 15 percent in 2018, with GTS expense growing about 2 points

more than that. That significantly lowered the number of open territories we

have. Additionally, through efficiency improvements, we were able to invest

in numerous other initiatives around hiring and training programs, new

business and retention initiatives and a host of others. And we started seeing

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the payback in 2018 with the accelerating contract value growth that we

showed you earlier.

We took the same investment approach with our conference sales teams,

investing for both immediate and long-term growth. In 2018, we grew the

sales force and reduced open territories, in addition to further adopting the

relevant pieces of our Sales Excellence Playbook and the growth rate of our

Conferences business accelerated dramatically. And we've taken that same

approach with GBS, investing in products and services, rapidly growing the

sales force, adopting the Sales Excellence Playbook and investing in all the

enabling infrastructure, we know supports growth. All of which builds the

foundation to drive sustained long-term double-digit growth.

The impact of all of that on our 2019 projected margin is shown here, and

we're using the midpoint of our guidance to do the math. The story is roughly

consistent with prior years. At the contribution margin level, we are dealing

with a roughly 50 basis point drag from retired, nonsubscription products in

the GBS space. We've retired these products because they're noncore. And

we believe, it will drive greater focus and ultimately, productivity in GBS.

Within the selling line, there is margin investment in 2019. This is almost

entirely for GBS, as GTS and GCS expense growth is roughly in line with the

corresponding top line growth. And as is our normal practice, we are seeing

operating leverage in G&A. The midpoint of our 2019 guidance calls for an

approximately 30 basis point contraction in EBITDA margins. Or said

another way, margins would have been approximately flat without the drag

from retired products. Looking forward, consistent with our medium-term

outlook, we expect EBITDA and free cash flow to grow roughly in line with

revenue.

We talked earlier about the power of the Gartner Business Model. We've

architected our business to take advantage of all its positive elements. As we

accelerate the growth of GBS, the benefits of the model start to compound.

That's because of the upfront billing. We'll continue to collect cash in

advance of delivering the revenues. Our 2019 guidance for free cash flow

growth is strong. And as we move out into 2020 and beyond, the combination

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of our growth and our business model will continue to deliver significant free

cash flow well in excess of net income.

In 2018, we primarily deployed our capital to delever. Through a combination

of utilizing proceeds from divestitures and our free cash flow, we reduced our

debt balance by $1 billion in 2018. That reduced our leverage ratios down to

around 3.4x gross debt to adjusted EBITDA at December 31, 2018, which

means we are now in the position to return to our long-standing capital

allocation strategy.

Over the last decade, we deployed $1.9 billion on buybacks at a weighted

average price of just over $61 per share. In 2018, we resumed our share

repurchase activity buying back $260 million of our shares, and we've

deployed an additional $4 billion on M&A. The CEB acquisition was

obviously the largest deal, but we've also done a series of small- and medium-

sized tuck-in acquisitions as well.

Going forward, our top priority is to reinvest back in the business for organic

growth. There are 2 other ways that we use our free cash flow, stock

buybacks and M&A. We have over $850 million available on our buyback

authorization. We'll continue to be price-sensitive and opportunistic when

buying back our shares. Now in terms of M&A, we are an organic growth

company, so we don't need to do M&A. We can be very disciplined. When

we do M&A, we look to enhance our core business. We prioritize Research,

and we seek differentiated content and data. As we have proven in the past,

we'll remain focused on ensuring that we deploy our free cash flow and

balance sheet flexibility on shareholder value-enhancing initiatives.

This is a very exciting time for Gartner. You heard Gene talk about how

rapidly the world is changing and how leaders across every enterprise function

turn to Gartner to help them accomplish their mission-critical priorities. Mike

Harris, our Head of Research and Advisory, illustrated the pressures and

dynamism across those functions as leaders face challenging circumstances

every day and how our research helps them with make-or-break decisions at a

low cost. And our GTS and GBS sales leaders, Joe Beck and Chris Thomas,

shared how they're leveraging the Gartner Sales Excellence Playbook to

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accelerate the growth of our business. Every enterprise function we serve from

IT to HR, to supply chain, to finance, is rapidly changing.

And our value proposition in all of these functions is indispensable and

unrivaled. We take that value proposition and leverage all of the elements of

the Gartner formula where all of our business contribute, Research,

Conference and Consulting. And we have an amazing business model.

Gartner remains committed to delivering sustained double-digit growth to

revenues, profit and free cash flow.

Thank you again for your time today, now Gene and I would be happy to take

your questions.

Gene, if you would join me on stage please.

David Cohen will be facilitating so he is going to join us as well and so just

wait for David to call on you and -- go ahead.

David Cohen: So if you have questions, please raise your hand, we'll bring over a

microphone. You have to wait until you have the mic to ask your question so

everyone can hear.

Jeff? The mic is going to come around.

Jeff Meuler: So a two-parter. The first -- and they're related, but the first, can you just help

size up how much the reset was from going from tenured sales associate level

productivity to experienced new hire on the people that were retrained plus the

promotions to kind of offset the GxL new sales ramp, that looks great?

And then the related question, everything you're saying makes a lot of sense,

the new data you're giving looks good. But the Q4, something about the GBS

metrics didn't really look very good and I guess I'm struggling to understand,

are there new things that you're still doing that are incrementally disruptive? I

think there was a tough wallet retention comp in Q4. I think CEB renewed a

lot of business in Q4. Can you just kind of help square the Q4 GBS metrics

with the progress you're seeing?

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Craig Safian: I'll take that 1 first and thanks for the question, Jeff. So in terms of what we

are seeing from -- over the course of 2018, Q1 to Q2 to Q3 to Q4, '18, was as

Chris highlighted and Gene highlighted we made a lot of changes but they

were thoughtful changes, and again all about laying the foundation for us to be

able to accelerate the growth rate of GBS in 2019 and accelerate it further

beyond that. I think the key thing to remember is, we only fully trained the

last people in Chris' GBS organization on the GxL products in roughly the

June timeframe and so we really only had 2 full quarters of the GBS team, the

full GBS team, really fully trained and able to sell the GxL products and

again, as we've talked about, there is a ramp that comes with selling that exact

precise type of value proposition in the market.

As Gene showed, and I think as Chris showed as well, under the covers when

you look at the GxL CV, the slope of the curve definitely accelerated in the

second half of the year as people got more comfortable. And as Chris's chart

showed, people were getting much more comfortable, and again if you get one

at bat and get a hit, you have that much more confidence the next time you

come up. And I know I'm mixing metaphors with what Joe did earlier on

football, but you gain confidence and you gain the skill set required.

And I think Chris's data reflected that. Specifically around Q4, it's really the

combination of the phasing out of legacy leadership council new business, and

replacing it as we come up the curve with the new GxL, new business. And

the ramp, while very, very impressive, wasn't enough to offset that known

decline that we had planned for. But as we continue to ramp up, we expect

that GxL new business and GxL contract value to significantly accelerate over

the course of 2019.

Jeff Meuler: So the sequential trend in CV and GBS from Q3 to Q4, is it just that there's

more business to renew on the legacy council -- leadership council business,

or just -- because it took a step back and everything you're saying was that

most things were done by June.

Craig Safian: You're precisely right. So one of the great things in our GTS business that Joe

and his team have been really focused on is the expiration skew of our

contract value is roughly even over the four quarters. So you will note that we

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generate more new business in Q4 than we do in Q3, which is more than we

do in Q2 and so on. And so that even skew really helps us grow contract

value dollars in the second half of the year. On the GBS side there's a heavy

weighting towards Q4, particularly December expirations and we just had a

large volume because of the amount of CV, think in the 45-ish percent range

of the contract value, came up for renewal in the fourth quarter. Actually,

more accurately, in December. And so we have programs in place to make,

try and even that out a little bit more over time and then again, our goal is to

really make GBS look like GTS on all the elements of the playbooks we

talked about, but also in the timing and phasing of the business.

David Cohen: At the back?

Tim McHugh: Just asked about GTS on your last call and (inaudible) reduction in the

number of open sales territories was mentioned quite a bit, so can you

elaborate how big of a change, what was that? And are you -- I guess there's

always going to be some open territory, so is there any risk you're below

normal, right, you're overperforming I guess relative to what you would

expect long-term in that metric?

Eugene Hall: Yes, Tim, so it has been an objective of ours for years to reduce the number of

open sales territories. The reason for that is we sell less in a territory without

a salesperson than we do with a salesperson. We had that brilliant insight and

so we want to minimize the number of open sales territories. The problem as

you pointed out is that we'll promote somebody to be a manager, for example,

and that gives us an open sales territory. The way we used to do it is, you'd

start recruiting after you promoted someone and then it takes, it might take 6

months or even longer, depending on what country you're in, to get that filled.

So over time we've been innovating to look at ways to, how can we reduce the

number of open territories over time. We've done that over a period of several

years and last year in 2018 I'll say we overachieved our expectations, we

reduced the number of sales territories substantially more than we had

expected to. We had operational -- and it's not random, we had operational

programs and those operational programs worked even better than we had

expected them to, and so that made a material difference in the overall number

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of sales people we had, the growth rate of the number of sales people we had,

because we have so many fewer open territories.

This is all great as Joe said, going into 2019 with a record low number of open

sales territories is just terrific for us because those salespeople then have all

year to sell. And again, I don't expect -- I expect that we will continue to

drive down the number of open sales territories over time. You asked if that's

kind of a one-time high and it's going to get worse. I'd say quite the opposite

actually, that it's not 0 and so we're going to keep driving that down. So I

expect that we will end this year with even fewer open sales territories than

we ended last year with.

Tim McHugh: One follow-up, just -- you also showed a presentation with the new

Gartner.com and some of the search functionality, essentially. Where are you

at in terms of actually successfully matching, I guess if you can measure drop-

off rates in terms of people doing searches and do they engage with content on

the Web Site. How good are you in -- and I imagine you've tried to

benchmark that, but can you give us any sort of relative performance or sense

of that in terms of how mature that is or good you are at that at this point?

Eugene Hall: So we -- hopefully as you got from the presentation, we want to be on demand

for our clients. When they have a problem, we want to be able to give the

answer to that problem immediately. So -- and one way they do that is they

go and they search out the documents that we have. So we've got those

documents prepared, they go and do that search. Search is very important for

us. Just as I described with open territories, we've been on a mission for years

to improve our search experience.

And every year we get better at it. If you looked closely there, you saw things

like what search experts would call type-ahead where if you start typing

things, it guesses as to what you might be searching for based on what your

role is and what other -- if you were a security person you might have -- if you

type the same words in, you might actually want different documents than

someone that is in operations or in application development. And so we have

a quite -- we're quite sophisticated, I'll put it.

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It's a major investment for us -- area for us. We have spent a lot of time

innovating, we have what we think are real great breakthroughs there in terms

of innovating on search and again we can expect it to get better every year, but

even right now I think we are very good. If you watch the video closely -- or

if you go use our Web Site, you'll see that it's very -- it's quite, very

sophisticated.

Gary Bisbee: Gary Bisbee at Bank America Merrill Lynch. Craig, so you've pushed back or

resisted at least the -- sort of the claim or the concept of margins rebounding

at some point in the future from the recent declines because you've talked

about the desire to continue to invest heavily to drive long-term top line

growth. And I think we all get that concept. But I guess I wanted to push

back a little bit on 2 fronts. So given how low the GBS productivity is, and

given a lot of evidence that you provided today that you really believe that's

going to improve, why wouldn't we see that flow through at some point?

And maybe the second way to ask the question, your adjusted EBITDA

margins are down 100 bps or so I think, adjusting for the divestitures since the

CEB acquisition, so maybe the other question is, are what you really saying is

that the CEB deal just is long term dilutive to margins by 100 bps or more?

Craig Safian: Thanks for the question, Gary. Good to have you back as well.

Gary Bisbee: You probably wish I wasn't.

Craig Safian: No, no that was an honest, earnest welcome back. What I think -- what

hopefully we were able to present today, as well as what we talk about on all

of our earnings calls is when we put the money to work from an investment

perspective we get the returns. And I think that we've got proof points of that

with GTS. We talk a lot about the money that we put into conferences and

again, you look at where we went from a growth rate perspective there

essentially almost doubling or doubling the growth rate in our revenues in

2018.

And that doesn't happen by accident, it happens because we made smart

targeted investments in areas that we had a high degree of confidence we'd get

returns on, but it is an upfront investment. I think the way we think about the

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business going forward and the way we think about creating value is -- and

this is going to sound a lot like what we said last year, but we want to

accelerate our top line. And the EBITDA and EPS and free cash flow and all

other metrics should accelerate with that top line as well. And so getting

GBS, which again as we've talked about reflects, represents 20 percent of the

contract value from 1 percent growth to 10 percent growth, that accelerates

everything all other things equal.

And that would accelerate the EBITDA as well. We believe because of the

vast market opportunity and because we've proven that when we've put money

to work, it drives returns. We would go a little bit faster in areas. The market

opportunity is there, it is certainly not a governor on our ability to keep

growing. And so I think as we get productivity in GBS and as the top line

accelerates, the bottom line accelerates as well. But we want to make sure

that we are appropriately reinvesting into the business.

And, again, sustained is kind of the story, right, so I think everyone believes

the double-digit, that's great, we're going to get there, it's really about doing it

over and over and over and over again. And I think we've proven that when

we put the money in the right places, we can make it sustain double-digit

growth.

Gray Bisbee: If I could just ask 1 quick follow-up. So both businesses are at (the)

(inaudible) 16 percent long term. So, like, if you're talking accelerate to offset

some improvement in productivity, would you consider growing GTS sales

above the 12 percent to 16 percent for an extended period, or is that not

realistic?

Eugene Hall: The way we've determined how fast we've grown GTS is we look at the --

each individual sales manager and what their capacity is to take on additional

new sales people and that gives us then a bottoms-up way to think about

exactly how many salespeople we can add and exactly where we can add

them. And so if that number turned out to be higher than the range that we

projected, absolutely; we'd be thrilled to grow higher than that. But it's driven

by operationally what's the ability of our area managers to take on more new

sales associates at a faster rate.

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And by the way, I talked about continuous improvement. We want to do that

so we work really hard to bring new sales people in and shorten that time to

productivity and make it so that it's easier for sales managers to get them up to

speed. So we're not satisfied with where they are. We want to get better on

that metric. But that's what constrains our growth rate is, it's the bandwidth of

our first line sales managers' ability to take on all of these new people we have

every year.

David Cohen: Peter's got a question.

Peter Appert: Thank you. So the 13 percent CAGR in GTS contract value, very impressive

over 10 years. But to the extent that it's correlated with 13 percent growth in

sales force over the same period, it might suggest, or I guess it does suggest,

that there really hasn't been any productivity gains over that period, which

might correlate with the static to declining margins. So what am I missing in

this arithmetic?

Craig Safian: Good afternoon, Peter. Our productivity measure is on the growth generated

by each individual sales person. Not necessarily the amount of contract value

that they're generating. I think the thing that we're really focused on is every

incremental dollar of growth in contract value we sell is worth a heck of a lot

more than a dollar because of our client retention rates and because of our

wallet retention rates. And so the average client stays with us for, let's say on

average 6 years and if you look at our wallet retention it actually grows each

and every year over those 6 years.

And so that's what we -- when we talk about making sure that we're making

the investments to fuel sustained long-term growth, when we hire a new sales

person, as they come up the productivity curve, they are generating

incremental contract value. We get that contract value in that first year but

again there's a much longer life to that, and so the investments we've been

making are what have allowed us to continue to grow at 13 percent, 14

percent, 15 percent on much larger numbers. So we're generating

significantly more growth dollars each and every year and those have a greater

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than 1-year value, think 5-, 6-, 7-year value on average, that's greater than 100

percent.

Peter Appert: And then sort of related to the earlier question on just the margin leverages, as

you see the maturation of the GBS sales force, the investment you've made in

that, why wouldn't it be realistic to think you'd see some pop back in margin

then, in 2020 for example?

Craig Safian: So I think when we went through the detailed margin walk materials earlier

it's important to understand that we are getting productivity everywhere in the

business and we're doing that so that we can reinvest back into the business,

again to support and drive that sustained long-term and hopefully accelerating

double-digit growth. We never stand still on that, we are always driving

productivity, and I think our investment philosophy and approach is that when

we drive the productivity on GBS that will give us an opportunity to make

even more investments to further fuel long-term double-digit growth.

David Cohen: There's a question from Jeff in the back.

Jeff Silber: It's Jeff Silber with BMO Capital Markets. I appreciate you gave us a little bit

more color about GxL than was able to do last week. I think it was said that

the GxL pricing was a little bit higher than the legacy CEB pricing. Could we

get some order of magnitude, I'm just curious how much of that is driving

your expected contract value this year?

Craig Safian: Interestingly, good afternoon Jeff. It's a little bit like apples and oranges. So

a leadership council that was enterprise based, it's hard to compare the pricing

of that to an individual seat or group of seats that we're selling to HR leaders

or finance leaders or what have you. The approach we've taken from a pricing

perspective -- I think one of the -- and Gene hits on this often in earnings calls

and in private sessions with the whole team as well. Simplicity is really

important and so we've modeled the pricing on the GxL products to look just

like what we've done on the IT leader side. And so the pricing there is very

similar and consistent to what we have on the IT side. The heritage leadership

councils could range from average pricing in certain channels of around

$20,000 to $25,000 or they could be in the $40,000 to $45,000 range but

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again, it was an offering for many as opposed to an offering for 1 and so they

are truly not comparable.

Jeff Silber: And just as a follow up and I'm sorry to go back to margins, but just focusing

on the G&A leverage, I think you highlighted you did about 30 basis points in

leverage last year, the midpoint of the guidance is 50 basis points this year. Is

that kind of a good long-term range we can use if we're modeling out over the

next 5 years or so?

Craig Safian: I think we want to make sure that we are making the right investments in areas

that will again support our long-term growth. And so one of the most notable

ones we talked about is obviously our recruiting capacity and capability, we

need to make sure that we are constantly investing there so that we can find

the great talent and drive productivity across all of our sales forces. That said,

we expect to drive net G&A expense growth at a rate slower than revenue

growth. Whether that's 30 bps, 50 bps or 20 bps, it's hard to say. It will be

dependent on the situation or dependent on the needs that we identify to drive

and support growth. But we're committed to ongoing operating leverage in

G&A.

David Cohen: Joe's got a question.

Joe Foresi: Joe Foresi from Cantor. So maybe I'll go back to the football reference. I

want to stay with one sport, plus I like the Patriots, but. You certainly might

have the same playbook but it is possible that maybe the players are different

in GxL? In other words, could it be that the product is maybe not as good as

Gartner's and could it be that the end users operate differently because there

are better and worse Patriot teams?

Eugene Hall: We've taken -- we developed the playbook on the IT side. As we talked

about, we applied it in supply chain and we got the exact same results. We

applied it in marketing and we got the exact same results. We've started

applying it, as you saw, in HR, finance, legal, and sales and the -- if you look

at the uptake, it's exactly what we would expect when we start applying that

sales playbook. In addition to that when we talk to sales people, they tell us

the products are terrific and that they really love selling them and so we're

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getting good feedback from salespeople and from clients on it. And so we're

pretty confident that it's going to be very much the same in the new functions,

HR, finance, legal, sales, et cetera, as it has been in IT, supply chain and

marketing.

Joe Foresi: When you think about the 10 percent growth in GxL you've obviously got a

small sample set because you've just started to sell it and the sales force is

starting to ramp on it. Have you risk-adjusted that sample set for a longer

period of time, so that you can see what the attrition rates would look like? Or

what the pricing would look like? I'm wondering how that's been looked at

when you've given the 10 percent contract value?

Eugene Hall: I'll answer the first half of that, which is we know why it's 10 percent better.

There's operational reasons why it's 10 percent better. It's things like there's

much -- Mike went through this, there's much more and much broader

content. There's a different service delivery model with it. There's different

kinds of client support. And so there's actually underlying reasons why it's

better. So it isn't kind of just, we thought it would be better, or we got a

couple of data points, and so there's underlying reasons why it's better and

again, I'll -- we -- on IT we saw what it is, it's quite good.

Supply chain and marketing have the same kind of deltas as well, they're

getting the range of IT as well. And so we have -- because of the underlying

economics and because everything we see looks that way, even though there's

a small number of renewals yet in HR, finance, legal and sales, again we've

seen very good results in the ones we've had longer, like marketing and supply

chain, and the underlying operational measures are exactly the same as in the

others.

Joe Foresi: On the GxL side, you've changed the product or you've relabeled it. What

areas were you specifically trying to address when you looked at the product

to make it -- were you trying to make it more sticky, were you trying to bring

together a bunch of different functions? I'm just trying to understand the

difference between GxL and you know as far as you would be.

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Eugene Hall: So the main thing we were doing is building a very strong value proposition,

the same very strong value proposition that we have in IT or marketing and

supply chain, and if you compare -- and Mike talked a little bit about this,

which is we -- the content is -- there's a lot more content in the GxL products

than in the legacy leadership council products. Legacy leadership council

products were a much narrower set of content and it varies by group, but you

can think it's whole number multiples more content.

In some cases may be as much as 10x more content in the GxL products, and

the way we get that is first, within the business function itself there's a broader

set of content. So, for example, in finance, if you had audit and risk, you'd

only get audit and risk. Now, in addition to audit and risk you may get

financial planning, et cetera. Because they care about those things so you get

more actual business content first. The second thing is there's IT content that

is relevant that we already had existing, that is relevant for a finance leader.

And so we've taken that IT content, like on financial planning systems or on

analytics, which are a very big deal. In fact it's -- if you look at issues CFOs

care about, half of them are technology-related. So we added the business

content that's much broader, we then took the technology content that we

already had and then tailored it for CFOs. Then in addition to that, there's

some content that is very relevant across many different functions. An

example of that would be developing talent. When you're developing talent,

many of the same principles apply in whether you're developing talent in IT,

in finance, in sales; some of the basics of that apply across the -- across the

business, and so we have this cross functional content.

We add all that together, the amount of content you would get more -- we kind

of -- think about ranging from 5x as much as you had in the leadership council

to 10x as much. So it's a lot more content. And then on top of the content I

mentioned, we've -- I talked about the events that we've added. Events are a

way that people get value, we've added a number of events and made those

events, actually conferences I should say, conferences and made those

conferences also much more robust than even the ones that existed, where

they existed, in the past.

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And then the actual productization itself uses the great search function that we

just talked about, the world-class search function and those other kinds of

capabilities that are built into the Gartner for IT Leaders, marketing leaders,

finance leaders, now they all have the same product-backed support that we've

had in the past just in IT. And so the whole point really is to have that very

strong value proposition and make that value proposition just as strong in all

the other functions as it was in IT, marketing and supply chain.

David Cohen: I think we've got time for 2 more. Ryan?

Ryan Leonard: Thank you. Ryan Leonard from Barclays. You've mentioned the success in

putting the playbook to work in supply chain and marketing, and I guess the

big difference that I see is that you have a book of CV already in place with

the legacy CEB piece, so you're kind of working on maintaining what was

already there in addition to accelerating growth, and presumably the 40

percent (plus) of sales hires are dedicated towards new sales.

Maybe can you walk us through the attrition that you've talked about, what are

your assumptions kind of baked in for '19, how operationally you go about

maintaining levels and what gives you confidence there's not further to go

before we see normalization?

Craig Safian: Yes, it's a good afternoon, Ryan. From an attrition perspective, the way we've

thought about and modeled into 2019, and you can kind of get a sense of it

from the sensitivity table that we walked through, that essentially if you take

the mix of GxL CV which is about 1/3 of the $600 million, and that means

two-thirds is the legacy stuff, and apply the rates we talked about on the

earnings call last week, where it's a roughly 30 percent attrition rate on the

legacy side and a 80 -- 20 percent attrition rate, sorry, on the GxL side you get

a weighted average attrition rate around 27 percent, which is roughly flat to

what we did in 2018.

And so we're not standing still and assuming that oh, wow, we just hope we

get that same attrition rate on the legacy stuff. So Chris alluded to it, Gene

alluded to -- or directly said it, Gene alluded to it, I alluded to it as well, we

have a significant number of retention programs that we have in place

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supporting both the GxL subscribers and the legacy subscribers. And so we're

working very hard to make sure that the attrition actually improves on the

legacy side and on the GxL side.

So we're doing both of those things. But again if you use that sensitivity table

that we walked through, even with a, no improvement in attrition and no

improvement in new business productivity, when you run the math with our

790 AEs we had on board at the beginning of 2019 you get roughly 8 percent

contract value growth.

Ryan Leonard: Got it. And 1 more if I could sneak it in. So obviously the hiring plans for

next year, 14 to 16 percent in GBS, 11 percent in GTS, but if we get to

halfway through the year and GTS is flat to accelerating is it fair to assume

that you would take that as an example of when you would like to reinvest, as

you talked about that gives you a good return?

Eugene Hall: As I said earlier the way that we decide how fast to grow our sales force, now

in both GTS and GBS is looking at the bandwidth of those managers. And so

as we get through the year and we see it looks like the managers have

bandwidth, or we can promote more managers and create more managers,

which we do all the time, then we'd accelerate that growth rate. And

similarly, if we saw that the bandwidth wasn't really working we'd be at the

lower end of the range.

David Cohen: Before we -- before we -- before we take the last question from Toni, please

note you'll have a survey that you will receive via e-mail from the Gartner for

Finance Leaders team. The replies will only be made available to us on an

aggregated basis. We appreciate your taking the time to complete this survey

to help us improve how we communicate with you. After the last question,

Gene will make some closing remarks.

Toni?

Toni Kaplan: Thanks. Toni Kaplan from Morgan Stanley. Gene, I know you don't have

many direct competitors, but if you could just give us a quick update on the

competitive environment?

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And then Craig, if you could talk a little bit about the M&A pipeline, you

haven't been so active since the CEB deal and you've been delevering. And

any sort of specific, just specifics on cash flow -- like return to shareholders

now that you've reached your leverage target?

Thanks.

Eugene Hall: So with regard to competitors we have a very strong value proposition and

when we go and talk to clients and talk to them about our different products,

the GxL products and the other ones that we have, it is very, very infrequent,

think less than 1 percent of the time that there's another -- that there's someone

that would be called competitive in that deal. Usually either we win the deal

or it's no decision and -- as opposed to they went to someone else. And that's

true for all of our products across every single one of the enterprise functional

areas we talked about.

Craig Safian: In terms of capital allocation, Toni, as we went through and as you noted

we're back to our rough leverage targets of where we wanted to be. We

generate a lot of free cash flow and we expect to generate lots of free cash

flow into the future. Tax reform now gives us the ability to actually leverage

almost all of our global cash flow, which we weren't able to do in the past.

And we want to put that to use. We talked about really 3 uses -- obviously

reinvesting into the business, which we'll continue to do; returning to capital --

returning capital to shareholders through our buyback programs; and strategic

value-enhancing M&A.

On the M&A front, the way to think about our pipeline or the way we're

thinking about M&A, we've got a CorpDev team, 2016 and '17 was really

focused on buying CEB and L2. Two-thousand-eighteen was really focused

on divesting a number of small business and I'd argue we did a really fantastic

job both in terms of the speed and the value we got for those deals. And now

the team is back focused and, they were always focused on that but now even

more focused, on M&A opportunities into the future.

I'm not going to get into the specifics of what we're looking for but our

expectation and the bulk of our pipeline as you'd imagine are small- and

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medium-sized tuck-in type deals that we'll be looking at. In absence of that,

and actually because of our free cash flow capability I'd say in addition to that,

we will always be looking at ways we can return capital to shareholders

through our buyback programs.

We did $260 million worth of that in 2018. We've got over $850 million on

our authorization, plus plenty of cash flow and balance sheet flexibility if we

should need it, and we'll treat it the same way that we showed you what we've

done over the last decade, where I think we've done a good job of both

strategic value enhancing M&A and returning capital through our buyback

programs.

Eugene Hall: Great. Well, thanks for your questions.

So here's what you should take away from today's session. We're living in

accelerated times. Enterprises need to constantly evolve to stay ahead of the

competition. Leaders across the enterprise -- HR, finance, IT, legal, sales --

they all need help with their make-or-break initiatives. Gartner is the best

source of that help. We have an indispensable, unrivaled value proposition, a

vast market opportunity, and through consistent execution of the Gartner

formula, we know how to capture that opportunity.

We've applied the Gartner formula in GTS and delivered long-term, sustained

double-digit results. We're applying the Gartner formula in GBS and expect

to achieve long-term sustained, double-digit results beginning in 2019. We

have a culture of continuous improvement and continuous innovation. We get

better, strong, faster year after year and we're in the best position we've ever

been in to provide sustained, double-digit growth across all of our key

financial metrics.

We hope you found this session useful to deepen your understanding of

Gartner and we look forward to updating you on Gartner's progress

throughout the coming year. Thanks for joining us today, and Happy

Valentine's Day.

END