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Tech Providers: Why you should become a “Cool Vendor”

by Jim Hare  |  October 4, 2015  |  Submit a Comment

January will be here before we know it and Gartner will begin the nomination process for our 2016 Cool Vendor research. If you aren’t familiar with our Cool Vendor special reports, each year Gartner publishes research across almost 100 different areas highlighting lesser-known, emerging vendors that are often unknown due to their small size and relative immaturity.

Gartner’s definition of a Cool Vendor is a small company offering a technology or service that is:

  • Innovative — enables users to do things they couldn’t do before.
  • Impactful — has or will have a business impact, not just technology for its own sake.
  • Intriguing — has caught Gartner’s interest during the past six months.

Our Cool Vendors reports reflects IT products and services that we find interesting and innovative.  Because of the breadth and depth of knowledge and expertise in technology and business, Gartner is in a unique position to identify and evaluate up and coming vendors across markets, topics, and industries.

What makes a vendor cool?

You can organize past Cool Vendors into two main groups. Ones that offered a new technology or approach to better solve existing problems and others that offered innovative solutions to solve new problems. But vendors are not selected as Cool Vendors simply because they have interesting technology. It is mostly because of the growth and success of their company in using technology differently to solve customer problems resulting in tremendous traction.  And innovations can go beyond technology and include new business models such as the “freemium” model which was a Cool Vendor innovation.

What’s the value of becoming a cool vendor?

Since 2004, the Gartner Cool Vendors process has benefited many startup vendors by increasing awareness and getting them on the radar of:

1.    Enterprise customers looking for vendors with unique offerings to help solve their problems
2.    Larger vendors looking for acquisition targets
3.    Investors seeking a new investment opportunity and
4.    Analysts and journalists looking for the next big story in the marketplace

Take a look at the impact that Cool Vendor status can have on the bottom line. According to a third party survey* of 200 execs, 65% said being a Cool Vendor had a noticeable impact on the company’s revenue growth and the ability to close business faster.  Specifically, 1/3rd of the surveyed companies said they attributed 5-15% of their business growth as the direct result of being selected as a Cool Vendor. These are numbers you can’t ignore.

And, if your strategy includes getting acquired, take a look at what has happened to past Cool Vendors. Since 2009, around 15% of them have been acquired including high profile vendors like as Instagram, Yammer and Nest. Most of the active acquirers are the big tech giants who often snap up multiple Cool Vendors each year and offer a premium to own the fastest growing innovators.

As you can see, Cool Vendor status can supercharge your revenue growth and company valuation. If your company hasn’t yet been selected as a Cool Vendor, you need to up your game. In my next blog, I’ll share some tips to help you to build awareness that can increase your chances of Cool Vendor nomination.


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Category: cool-vendors  

Jim Hare
Distinguished VP Analyst
5 years at Gartner
23 years IT Industry

Jim Hare is a Distinguished VP Analyst in Gartner's Technology & Service Provider group with primary focus on Data Science and Machine Learning. Read Full Bio

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