Gartner, being one of the few publicly traded industry analyst firms, notified the SEC that it was reducing headcount by 117 this week. This was followed by SageCircle reports of a reduction at AMR Research. Not surprisingly, the double-serving of downsizing news sent murmurs through the analyst relations and analyst watchers communities. Dennis Howlett, an Enterprise Irregulars and ZDNet blogger, posted a thoughtful perspective, well worth reading.

From my ongoing conversations with AR people over the last few months, I know there’s an assumption that the smaller (and thus ostensibly “more agile”) analyst firms will weather the 2009 economy better than the sector behemoths Gartner, Forrester Research and IDC. I don’t quite share that optimism, based on my conversations with analysts. One of the challenges is that there are so many small analyst shops vying for shrinking budgets.

And that drives me crazy.

The high number of small analyst businesses is a direct result of excessive fracturing within the analyst business. Fracturing has become a chronic problem within the analyst business. It’s epic. The entire sector is out of balance.

The fracturing is compounded by too many small firms staying small, not even attempting to grow into mid-sized firms.

If you’ve followed me even casually, you know that I’m supportive of 1-person and small-team analyst businesses in the world today. For the last 9 years, I’ve been one of the go-to people to validate them and raise their market visibility.

Many small analysts produce research and advice on par with Gartner. I just wish their business vision and execution was on a par with Gartner too.