In anticipation of the Fall 2019 report releases, G2 is launching updates to our Market Presence algorithm on August 28, 2019.
The Market Presence algorithm combines user reviews, publicly available data, and third-party metrics to score products — 16 data points in total. The Market Presence score controls the vertical placement of products within our Grid® and Segmented Grids® and is meant to measure product and vendor impact and influence within a category.
Why are we making changes?
When companies merge with and acquire other businesses, there are important updates to factors such as company size, organizational structure, and market share of the two companies that are now one. As a company that’s gone through a couple of acquisitions ourselves (see here and here), we’ve experienced those changes first hand. We’re not the only ones, though. According to our data, there have been approximately ~1,400 M&As per year over the last six years!
While mergers and acquisitions are exciting and make a big splash, the impact on the business and/or product that was acquired isn’t often immediate. In reality, it takes time for business to integrate: their teams, their products (whether to keep them alive, merge or integrate into another solution, etc.), and even their financial resources. Until those aspects are aligned, the acquired product cannot receive the full influence and impact of its parent company. With our current algorithm, it’s all or nothing when it comes to M&As, either over-or under-weighing the impact of an acquisition on a product's Market Presence score — which isn't helpful to prospective buyers.
What’s changing?
The Fall 2019 update to the Market Presence algorithm focuses on improving our ability to measure market share and company size accurately following mergers and acquisitions. The algorithm accomplishes this by leveraging data from Crunchbase. By identifying M&As as they occur and gradually applying the impact to all affected products over an 18-month period, the updated algorithm and Market Presence scores provide buyers with a more realistic view of the impact these events have on the products and companies involved.
This update to the Market Presence algorithm will be reflected in G2’s Fall 2019 reports releasing on September 30, 2019.
If you have any questions about this release, email us at research@g2.com.
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