ARmadgeddon predicted accurately a while back a concentration of the IT analyst research firms market was to happen.
In the last 18 months and in random order, Yankee changed hands, Aberdeen is now owned by a marketing company, Ovum went public, acquired RHK and Orbys... and now it they're about to be eaten by another big fish in the name of Datamonitor who themselves acquired Butler.
We can't wait to read former Egghead Duncan's analysis on this, including on how much Chris Dines and co made in the process...
ARmadgeddon's take: this curious Finchley-Hull-Farringdon menage-a-troie might be interesting if they can sucessfully cross-market their research and drive deeper into RAS for users. Datamonitor is strong in banking and consumer, Butler sort of ok in technology but have a successful events business and Ovum is strong in public sector and telecos. All 3 combined can be a reasonable leader in the UK with revenues over £50m and gain significant market share with end-user. However, the Datamonitor needs a stronger US base to be able to successfully target US technology vendors and compete with the Gartner borg.
PS: thanks for all those pinging us the news...
Update: Duncan published a glowing commentary on this acquisition (he's a shareholder too), we received some other comments hinting that an international merger with a firm like IDC might have been much better for Ovum. We still think that a strong end-user base is necessary to gain independence and respect, let alone to compete with Gartner.
Friday, 20 October 2006
ARmadgeddon predicted accurately a while back a concentration of the IT analyst research firms market was to happen.
Thursday, 19 October 2006
Originally published in Business and Technology Consultant, March 1990.
Much has changed in information technology and in the analyst/consultant world since this article by Efrem Mallach first appeared. It reflected an understanding of the world at that time but, like anything written about high-tech then, does not necessarily apply today.
As a consultant, what do you sell? Knowledge.
Where do you get it? Anywhere you can.
Would you like a willing source of free, accurate, up-to-date knowledge about computer and communications products? You bet!
Believe it or not, there is such a source. In fact, there are several. Yet many consultants are unaware of them, don't use them, or don't use them effectively. If you would like knowledge for the asking, read on!
These sources are the vendors themselves. Every computer or communications firm worth its salt knows how vital consultants are to its future. Debra Rabin, until recently responsible for Mitel's relationships with consultants, has the figures: 60% of Mitel's 100- to 500-line PBX sales, and 76% of those over 500 lines, were influenced by consultants. The numbers are similar on the computer side. If a company wants to survive, let alone grow, it must treat consultants right.
Most firms do this by establishing a program to deal with consultants. They may call it consultant relations, consultant liaison or consultant support. They may give it a catchy name, such as telephone company U.S. West's Consultant Connection. By whatever name, it's there to help you. You'll get maximum mileage out of this free service if you know how to deal with it, what to expect from it, and what not to expect.
WHAT A CONSULTANT RELATIONS PROGRAM IS
Most vendors' consultant relations programs provide a range of services to consultants. Common ones include:
- A newsletter, or other periodic mailings, to keep you up to date on what the firm is doing: new products, marketing strategies, plans.
- A telephone "hot line," to give you specific information when you need it for an engagement. You can often obtain marketing and technical literature via this route.
- Consultant meetings and seminars to keep you informed.
- Often, a loose-leaf reference manual about the firm's products.
- A contact when you need to access a firm's resources for your client: for a visit, a demo, or (heaven forbid!) problem-solving. If you are particularly influential - in your own right, or because of your position with a major firm - these people will keep in touch with you, by phone or with personal visits. The rest of us must initiate contact ourselves. In either case this contact point can be invaluable when you need it.
As Nancy Shotwell of Tandem's Marketing Communications group puts it, these services "provide one-stop shopping for consultants. They don't have to call around the company blindly hoping to get the right person."
With the possible exception of the reference manual, the consultant relations program's services are free. Since vendors can't offer them to every curious high-school student who has their phone number, they may impose qualifications on whom they support. These qualifications are seldom arduous, and never get in the way of a genuine consultant with a legitimate need.
If vendors didn't provide this central service, getting information would be a chancy proposition. Many consultants call local sales offices. Fine - if you have a specific client whom you can identify, have convinced a salesperson that your client is a qualified prospect, don't mind dealing with a different salesperson for each client, like having your requests drop off the priority list when a hot prospect calls, and don't want to be updated on an ongoing basis. In short: dealing with local salespeople, unless one of them is your significant other, is frustrating. A central team, whose only aim is helping you, is usually more accommodating.
Nobody sets up a program such as this out of the goodness of their heart. Charity is nice, but doesn't translate into operating budgets. Vendors expect something for their efforts. In this case their wishes are simple: more sales. If you, the consultant, trust a vendor to deliver quality products which will keep your client happy, you will tend to recommend that vendor. If you don't, you won't. By giving you information, vendors hope you will grow to trust them. By giving you good service, they hope the "halo effect" will make you feel your client will get equally good service.
Tandem's Shotwell describes the reasons simply: "Our sales force can only reach so many prospects. Consultants who are knowledgeable about Tandem can expand that prospect base."
3Com consultant relations program staffer Lorraine Valenti gives many examples of how this works in practice. One example involves market research firm A. C. Nielsen of Chicago. Nielsen engaged Director of Management Consulting Gary Moucha of Office of the Future, Inc. Moucha went through an extensive evaluation working closely with Lorraine and her colleagues. Result: a 3Com installation worth about half a million dollars at the end of 1989, with considerable growth potential in the future. "All of that would not have happened without Lorraine's and her boss's help," stresses Moucha.
Not surprisingly, this self-interest means that vendors will send you information that puts them, and their products, in the best possible light. That doesn't mean the information is wrong. On the contrary: it is scrupulously accurate, often more so than information from other sources. Vendors know that consultants are savvy and see through hype. "We give them facts, no hard sell or fluff, so they can reach their own conclusions" says Valenti. She continues: "If they decide something on their own, they will stand by it."
Most vendors will not send you information that puts down their competition. They know that competitive knock-offs are often inaccurate, get out of date quickly, and leave a bad taste in consultants' mouths even when correct. Besides, when sent to a consultant, mud-slinging usually generates a call to the competitor for a response. This lets the competitor get in the last word. Vendors will present their own strong points and let competitors fend for themselves. You may get a feature comparison chart, but you'll have to do your own comparative evaluations.
WHEN TO CONTACT THE CONSULTANT RELATIONS PROGRAM
There are two times to contact a vendor consultant relations program: before you need them and when you need them.
Contact a firm before a specific need if you think that you, or a client, may be interested in its products at some point in the future. It never hurts to get on their program's mailing list, establish personal contact with its staff, and become familiar with the way it operates. By reading their newsletter, you'll keep up to date on the firm with a minimum of effort. When you have a need, you'll know who to call, you'll ask informed questions, and your request will get priority treatment. 3Com's Valenti says "I want to get to know them and to build a relationship where they trust us and we trust them." For this to happen, lead time before a specific need is vital.
If you haven't contacted a firm in advance, get in touch with it when you need specific information for a client engagement. Explain who you are, what you do, and what you need. Even if they never heard of you until that moment, you should get prompt and courteous results.
HOW TO FIND CONSULTANT RELATIONS PROGRAMS
Call. Most corporate switchboards have lists of departments as well as lists of people. If the switchboard hasn't a clue, ask them for the PR group. PR and CR often work together, so PR will know where to route you.
Alternatively, if you have had contact with the local sales force, ask them. Most consultant relations groups make it a point to keep their sales force aware of the consultant's role in the selling process, and of their own support programs for consultants. Salespeople are delighted to get you out of their hair and into the hands of professionals.
HOW TO DEAL WITH THE CONSULTANT RELATIONS GROUP
A few hints to improve the return on your time investment:
Tell the consultant relations group as much as you can about your client. You should be able to say something about the company (size, industry, approximate location) and the application they have in mind. If you can identify your client, do so; it helps credibility. If you can't, you won't be the first. Explain why you can't, don't play games, and say what you can. The more they know, the better they can tailor what they do to what you need. Remember, these folks don't always have the information you need themselves. They may have to ask others for it. These others, in Product Marketing, R&D, or elsewhere, may need to know more than just "tell me about your widgets."
Do your homework. "I've checked Datapro Reports and couldn't find ..." will go over better than "Can you tell me ...," even if the requests are identical.
Limit your request to what you need. You will get a faster answer to "What are the maximum baud rate and line count of a Model 602?" than to "I need specs for all your digital elbats." If you do need everything, you can get it - but explain why.
Finally, give them all the time you can. Emergencies come up. Consultant support people have dealt with emergencies before and will again. But for each real emergency, they also see ten consultants claiming to have an emergency - usually because they, the consultants, procrastinated.
IF THEY WON'T TELL YOU SOMETHING YOU NEED TO KNOW
This rarely happens. When it does, there are a few things you can do:
- Explain, precisely, why the information is necessary for your client decision and what will happen if you can't get it. By itself this probably won't change things, but it is an important preliminary for the next steps.
- "Can I sign a non-disclosure agreement?" (Your client may have to sign too.) If you sign one, take it seriously. Slip and you won't be trusted again - and not just by this vendor. The consultant relations community is small and close-knit. They talk to each other. Word gets around.
- "Is there anyone else who can authorize me to get this information?" Sometimes there is.
- A popular ploy is "If you can't tell me, I'll have to assume X and Y." If X and Y are much less favorable than the facts, you may get somewhere. Then again, you may not - especially with pros. They know the rules. Their primary loyalty is to their employers, not to you. Even if this scheme gets you an answer, you may be resented for having used it.
One gambit that will not work, by the way, is to call several people at the same consultant relations program, if it's large enough to have more than one staff member. They update each other on who calls whom for what. (Some log contacts in a shared database.) If you strike out with one, that's it. You can still call your cousin in sales or your friend in R&D. That's your business. Just don't try another consultant liaison.
IF THE COMPANY HAS NO CR PROGRAM
Sad to say in this day of niche marketing and infrastructure consciousness, not every computer and communications firm has a formal consultant program. Sometimes you'll call a switchboard, ask for Consultant Relations, and hear "Huh? Was that employee relations or public relations?" I have personally been bounced through six different departments (at a billion-dollar computer firm that ought to know better) before giving up in disgust.
After a good primal scream, there are some things you can do. First, of course, is to get the information you need. Best bets are the PR department, the marketing communications folks, and the local sales office.
Having gotten what you need - at three times the effort it should have taken - don't stop. By then you'll be on first-name terms with at least a few people at the firm. Tell them what you had to go through so your client could buy their product. Ask them to multiply that effort, that frustration, by the number of sales campaigns they mount each year. Ask them if they think frustrated consultants help their cause. Tell them that the profit on one solid sale will pay for a consultant relations program for years. (It will.) Make sure they know that their competitors are wooing consultants for all they're worth. (They are.) If enough of us pound away at this message, it will eventually get through.
AFTER THEY HELP YOU
Most support groups, for consultants or anyone else, labor under great pressure and with little appreciation. A sincere thank-you by phone is always in order. Beyond that, you may be surprised to realize how much good will a brief thank-you note will generate. If the consultant relations group has more than one person, and you dealt with someone other than its head, send the note (or a copy) to the boss. If you recommended their firm and your client placed an order, tell them that too.
If you didn't recommend a firm that helped you, it's not a disaster. Consultant relations people want their firm to win, but they're not on commission and don't feel each loss in their wallets. Says 3Com's Valenti: "If I can help someone I'm going to do it, whether it's a $2 million or a $25 sale." They see more campaigns in a year than a sales rep does, so they can accept the law of averages more readily. They know that a consultant who is in a position to evaluate their firm once will be in the same position again. They'll continue to support you as long as they feel you gave their firm a fair shake, didn't use them just to improve your bargaining position with a preselected supplier, and may recommend them at some point in the future.
A few firms may ask for the reasons behind a negative recommendation so they can improve their products and services. (More should.) If that happens, ten minutes of your time is bread cast upon the waters: it will return manyfold.
Thursday, 12 October 2006
This column by Efrem Mallach originally appeared in Computerworld, November 25, 1991. A few details - a date, some microprocessor names, the speed of a modem considered "fast" - were updated later that decade, but it is otherwise unchanged.
Much has changed in information technology and in the analyst/consultant world since this column appeared. It reflected an understanding of the world at that time but, like anything written about high-tech then, does not necessarily apply today.
According to esteemed expert Oscar Porkchop, the market for X (fill in the X of your choice) will grow by Y percent (not less than 25) until the year Z (two to five years from now). You can sample Oscar's wisdom for a few dollars in this paper, for a few hundred dollars in a research house report, or for tens of thousands by subscribing to an industry analysis service. The message is the same for all three sources.
Now try an experiment. Pull any five-year-old issue of Computerworld out of your dusty archives. See what Oscar and his ilk said then. Compare their forecast with what happened. How good was their crystal ball? Chances are, it wasn't wonderful.
That by itself is not a reason to criticize the Oscars of this world. Weather forecasters make mistakes, but we still wear galoshes when they say it will rain. The difference is that computer industry gurus are consistently wrong in the same direction: they overestimate the speed with which new developments will displace the tried and true. What's more, they do so for specific reasons that we can analyze, understand, and take into account the next time we read a computer industry forecast. The result: our forecast, based on the analyst's opinion but aided by our understanding, can be better than the analyst's was.
The three factors that make analysts anticipate change faster than it will really occur are analyst bias, survey subject bias, and misleading comparisons.
- Analyst bias arises because industry analysts have an economic ax to grind. Consider the publisher of a report on UNIX. The more important UNIX will be in the computer industry picture, the more people will buy the report. The more people who buy the report, the more money the analyst's firm makes, the more raises/promotions/etc. the analyst gets. The analyst's economic self-interest motivates him or her to inflate the UNIX market. Most analysts do not consciously fudge their numbers. They do, however, give them the most favorable interpretation - usually without realizing what they are doing. The publishers of generic reports, that discuss overall industry trends without focusing on a specific product area, are subject to the same pressure. People need their services more in times of rapid change, less when change is slower. Who will pay $40,000 to hear "next year will be like last year and this year?" It is in their economic self-interest to predict rapid changes. They, albeit subconsciously, react as predictably as Pavlov's dogs.
- Survey subject bias influences the numbers analysts use. Many market forecasts come from asking MIS managers "When will you start using hula hoop storage?" or "What fraction of the PCs you buy next year will use the 786 chip?" MIS managers are human too. They want to be seen as being with it, at the state of the art, using the most modern equipment and the latest technologies. Are 786-based PCs hot? By golly, that's what we'll buy! Put down 100% for me on that one, Oscar! Even in anonymous surveys these folks want to see themselves as current. They can't admit - even to themselves in the most private of whispers - that their shop might be falling behind. The facts of the matter, of course, are quite different. A lot of 486-based machines are still doing useful work, the Pentium is mainstream technology, most people still find a 250MHz Pentium II "fast." Dreams of 786s next year fall victim to harsh realities of budget justification, lack of software, and other mundane issues. The MIS manager who says "Oh, yes, we'll be using UNIX next year" often means "we'll get a server" or "one of our engineers will have a Sun workstation," while the corporate IS shop sticks to MVS. A respondent's "We're using multimedia" must be translated into English as "we've learned how to put clip art on our overheads."
- Misleading comparisons result from comparing the R&D promise of a new technology with available commercial products using the old one. Veterans may remember how many years semiconductor memory was "around the corner" as a replacement for core. It did replace core eventually, of course. Nobody has bought core memory for ages. But the switch took far longer than gurus, who compared semiconductor memory lab devices with real-world core memory products, thought it would. They forgot that, during the years that it takes a new product to emerge from the lab, the previous technology will not stand still. By the time Year X semiconductor memory technology reached production levels, it was no longer competing with Year X core, but with Year X+3 core. Since then scads of other products have been in the same boat. Some, like bubble memory, never made it. ISDN is falling victim to the same syndrome, at least in part: many of the benefits that were trumpeted for ISDN when it was conceived years ago can now be had more simply and less expensively via other approaches, such as fractional T1. The reason is the same: older telecommunication techniques didn't stop evolving while ISDN got its act together. When ISDN was conceived everyone "knew" 2400 bps was the theoretical maximum speed of dial-up phone lines. Today they're at 56Kbps and counting. ISDN may still have a future, but it won't be as dramatic and as universal an improvement over the alternatives as it was once. The same is true of any other technology - pen-based computing, object-oriented databases, whatever - that you read about: it may make it to the mainstream, but this blessed event will almost surely occur far later than the analysts are saying.
The next time you read a technology or product growth forecast, ask yourself - or the analyst, if you get the chance - these questions:
- Where did the raw data come from? What is the bias, conscious or subconscious, of that source?
- What is the analyst's, and the firm's, interest in creating a perception of rapid change and/or high growth? (If they say "none," either they are lying, which is unlikely but possible, or they're blissfully unaware of their own inner motivations.)
- Are lab results or pre-alpha software versions being compared with generally available products? How long will it take the new technology to reach real users? How far will the old technology have advanced by then?
If you can answer these questions - often, the act of asking will suggest the answers - you'll be on your way to a better forecast than your guru can sell you.
Wednesday, 11 October 2006
Tekrati reports today that IDC is using its successful Insights Services to target IT users:
IDC Launches Insights Advisory Service for IT Executives Tekrati Analyst Firm News
By the look of it (see the un-edited press release here), they seem en route to eating some of the IT user RAS pie enjoyed by Gartner, Forrester, Ovum, AMR and the local boutiques.
ARmadgeddon's take: although their analyst line-up currently only covers North-America, it is an interesting move. All three analysts listed have experience with RAS firms: Melinda Carol-Ballou at META, Stephen Elliot at Forrester+Hurwitz and Joseph Pucciarelli at Gartner. Although today it almost exclusively serves IT vendors, IDC enjoys a great brand recognition and global footprint with offices almost everywhere noteworthy. However, its management is conservative and they have been very slow to move out of their comfort zone. If they can successfully leverage those assets to target the IT buyers they might well become a credible alternative to Gartner in the long run. We would suggest them to stick to those vertical markets they cover well through their Insights programme and focus on emerging countries where the Gartner Borg Empire is not an oppressing force.
Update: Tekrati also posted this release about 3 more analysts joining IDC:
IDC Fortifies Software Research and Advisory Capabilities in EMEA Tekrati Analyst Firm News
- Alys Woodward, ex-Ovum, for Business Intelligence and Analytics research in Europe
- Jonathan Share, ex-Citiwire, in the consulting group (really?)
- Eric Domage, now head of security solutions research in Europe for IDC
- Erik Bruin, changing focus from IT services solutions to enterprise applications
Finally, there are recent comments from Han Honimous below and on this other post... someone out there must not like IDC very much. We thought of them they as genteel and harmless...
Monday, 9 October 2006
Looks like the AR jobs market is in full swing. There's been a lot of movement recently in EMEA, including at CA, Avaya, IBM, CSC, Marconi, Oracle, Unisys, etc...
And looking at the links on the left hand sidebar, there are a few positions advertised at major vendors:
Sr. Manager, Analyst Relations - US LeadMclean, VA - BearingPoint
Analyst Relations ManagerRedmond, WA - Microsoft
Vice President, Analyst Relations &San Jose, CA - BEA Systems
Vendor Relations SpecialistUS - Gartner
And also one to join the Gartner vendor relations:
Director, Marketing Communications andSan Francisco, CA
This Borg vendor police job description makes an interesting read:
This position will be responsible for ensuring the Gartner brand is protected in the marketplace and is presented to reflect independence and objectivity at all times. This is achieved by receiving; reviewing and approving all formats (press releases, presentations, brochures, etc) by which vendors will attempt use Gartner research externally.
Thursday, 5 October 2006
In April we wrote about whether AR should cater for wider audiences: Step up a geAR or disappeAR!
Two related posts bring further points.
James McGovern wrote that AR should focus on bloggers, and on analysts independence in this post:
Enterprise Architecture: Thought Leadership: Software Vendors and Analyst Relations...
"Analysts’ claims of impartiality are being eroded in our minds on an almost daily basis. The bigger analyst firms stand accused of engaging only with organisations that buy their services, such as not showing open-source projects next to commercial closed-source offerings in terms of ESB, BPM and Portals thus eroding the perception of even-handedness. Meanwhile, “Analysts-For-Hire” can be commissioned to write collateral on behalf of vendor clients.
In this other comment of his here, one might read a hint of envy?
In the meantime, Duncan Chapple from Lighthouse posted a robust response to Influencers50 on their paper indeed dramatically titled "Analyst influence is diminishing": Is the headline mightier than the humdrum?
We planned to respond but Duncan got there before us. We can't either support Influencers50 research methodology or conclusions. What's more, Influencers50 seem to ignore (deliberately?) the "ripple effect": IT analysts are super-influencers: they are a small target audience (less than a few thousands for a given vendor, from which 50-100 are top tier) who influences other influencers such as media, bloggers, consultants, system integrators, financial analysts, etc... Bearing this in mind, it does seems that maintaining close relationships with top-tier IT analysts might be a good idea. This should probably include other top-tier influencers such as super-bloggers. Second and third tier should be dealt by one:many tactics, maybe such as this one?
Bottom line: tiering the audience is AR best practice. In those diminishinging budgets and need for increased accountability it is a logical choice to concentrate on analysts directly impacting the sales cycle. In addition, firms such as Gartner, IDC and others do in turn influence other key influencers. AR leaders should nevertheless look at ways to scale their programs in a one:many fashion to include other super-influencers, on a case-by case basis.
After harvesting those "low hanging fruits", they should establish a strategy to transform AR into IfR.
UPDATE: a great conversation on IfR or Influencer 2.0 started in the comments threads of this post (see below) and on James'. Our position is that people influence to people. Consulting, advising, blogs, research reports, press articles, speeches, web sites, etc... are different medium with specific attributes. One has to revert to communication studies to frame it ; in the end, only a few things matter:
- trust & reputability
- medium and its characteristics (synchronicity, etc...)
What about bloggers then? Does the read-write web change everything? Can boutiques be heard over Borgs? We're sorry to disagree with Jon, but we don't think he gets the point. It's all about who has to say what. Some bloggers are super-influencers and we also know of dull analysts.
Are there pragmatic guidelines for AR Managers then? Yes, focus on the person, on the research agenda, on the real, original content and first and foremost on one's real influence, to tier your audience, not on the medium. Make sure you end up with a manageable number of Tier 1's which whom you want to have deep and regular conversations, regardless of whether they are bloggers or analysts.
- Step up a geAR or disappeAR!
- Should AR run Influencer Relations? [Analyst Equity]
- ARmadgeddon to AR pros: Get up off your ass [Helzerman]
- Its time for analyst relations to step into the 21st Century... [Monkchips]
- The Changing Influence Game [Deal Architect]
- Analysts determine opinions industry-wide [Analyst Equity]
- The influence of blogs [Infuse by Influencer50]