IDC has just put out this press release:
IDC's Expansion Efforts Validated in New Report from Outsell, Inc.
It is quite interesting that they are seeking third party validation themselves, a trick vendors often use IDC for. The release gives some facts (like they now have 950 analysts) but not IDC's actual revenue and is highlights their Insights businesses. We've been hinting before that Insights cannibalises their current business and does not sell too well to users. Indeed, this line does little to reassure us: "IDC now has the fastest growing end-user advisory business among the large market intelligence companies." As every analyst knows, "fastest-growing" always means smallest.
They know about segmentation though...
Friday, 30 November 2007
IDC has just put out this press release:
Monday, 19 November 2007
In layman’s terms, this is quite a simple equation. A Tragic Quadrant vendor review can consume as much as 3 FTE over 2 weeks. However, the risks of not providing a structured response on that same Gartner Magic Quadrant can waste months of efforts and much goodwill in the marketplace. We can despise Gartner’s pricing, but a bad MQ can still be career-limiting for an AR professional. It can also lead to lost sales and depressed share values.
That means that the two options for reaching out to a wider community are:
- to increase the resources available for AR, especially headcount and budgets and/or
- to adopt tactics similar to consumer marketing or PR: newsletters, multi-firms briefings, etc…
ARmadgeddon’s take for AR Managers:
Analysts influence unfolds in different markets through many different channels and it is important to segment this audience more finely than just in 3 tiers. AR managers should, more than ever, align their goals with their stakeholders' business plans and use carefully chosen goals to impact carefully selected analysts. For instance, in the software world some analysts influence the developer community and it might be right for a start-up to target those analysts rather than those who influence CIOs, others might influence a key region or industry and should be focussed on if, and only if, that specific region or industry is a business priority.
It nevertheless remains true that filtering insight from noise is increasingly difficult: AR managers should explore Rebels -- but do not ignore the Dinosaurs. We should be, however, careful on how they engage with a fast-flowing and dynamic community: bloglysts tend to be very reactive and it is not enough to deal with them in a one-way mode as PR is often accustomed to.
AR managers should also be wary of preserving reputations and not waste analysts’ brands and community goodwill by being over-aggressive: in the best case the output of pressured analysts will be bland and irrelevant, in the worst they will be stifled publicly. Do read Dale on the patronage model for more.
Bloglysts need to figure out what new business models are coming out of the Web 2.0 age and how to provide value to the IT buyers community or face being commoditised.
Independent analysts need to find a way to put aside their egos and work as a community to effectively compete for their fair share of the IT analysis industry. They also need to provide more proof-points for their influence than just simply citing names of clients they work with.
Traditional IT Analysts need to embrace communities and Web 2.0 tools and move up the value chain by offering contract negotiation and other high-value services.
Friday, 16 November 2007
On top of those staple offerings, analysts firms sell consulting days (SAS or Strategic Advisory Service in Borg speak) that vendors use for speaking engagements and pre-launch product messaging sessions. Users use consulting services from analysts for contract review, vendor selection and generally speaking to cover their backside when they’re making a politically charged decision. In the industry it is sometimes referred as to the BACS –Borg Ass Covering Service. Some firms also make good money from their events business (although this is more cyclical).
The clients for the services described above are both IT vendors and IT users, in variable proportion. Examples of IT analyst firms operating on a RAS model include Gartner Inc. (IT), Forrester Research, Inc. (FORR), AMR, NelsonHall, Ovum, Yankee Group Research, etc…
Those firms and some others have also sussed out that by speaking to all vendors, they could reverse-engineer their business model and work-out their market shares: this is what spreadsheet jockeys at IDC and GartnerDataquest do for a living. Note that since most journos have no clue whatsoever on the market, IDC and DQ enjoy a high SOV with their numbers being quoted by IT and business press day in and day out.
The clients for number crunchers are IT vendors (market shares tend to be quite useful for those strategic planning exercises at the end of every fiscal, and sometimes also for setting performance goals, at which point it usually goes pear shaped when a product manager calls up on AR to know why is product’s share is not doing great).
This is nice and simple, even if you add quite a large numbers of independent analysts, trying to make a living of selling white papers, consulting and speaking engagements to vendors.
However, two trends are changing the face of the IT Analysis industry: Open Source Research and Web 2.0. We’ve discussed open source research in this post and there have been great discussions on Jonny’s praise of open source analysis. Not to start over the conversation again, but we’d agree with Duncan that free at the point of delivery is not the result of a collaborative and transparent process where producers and consumers are the same. The lack of wikis (check also here) does not mean that James’ thoughts are not shaped by his interactions with the community nor than there’s not a vibrant community of independent analysts working loosely together –see The Enterprise Irregulars and the BritsGang for instance.
However, free does not mean valuable, rather plentiful and it makes sifting through bloggers and wannabe-analysts difficult for the AR professional trying to figure out who’s influential and who’s not. In that sense, the Rebels contribute to aggravate the “internet clutter” as expressed by Joseph Martin. Noise doesn’t equate with influence and this is why IT buyers like “reference libraries” –repositories of a single version of the truth. Gartner provides this and it partially explains their success.
Librairies are fine but someone to show you around is even better. Richard puts elegantly (or not?) here that the value of analysts is in the conversations more than anything else, that reports are only an entry ticket to the "inner sanctum". Egoes aside, a conversation with a good analyst is always the best way to cut through that clutter.... James would surely agree with this point on conversations but gives the research away -at no cost.
Redmoonk seems to be doing fine even though we see no Porsche in front of their offices, so one can wonder why doesn't everyone switch to open source research? The software and web markets are full of successful examples like at Linux, Wikipedia, surely the analysts can make a living from support (consulting) revenues just like Jboss, Red Hat, etc…?
There are two fundamental issues limiting the options for new entrants:
1. There’s a big difference between direct analysis (commentary) and in depth reports requiring primary research. At one end, there can only be so many James (thank God!): there’s intense competition, low barrier to entries but a given community has a finite attention span and number of relationships that can be established. On the other hand, primary research is expensive and needs to be syndicated –except if one relies on self-selecting samples and e-polls (see this honest comment from Dale here.
Few can comment eloquently on the issue of how different are sponsored research and open-source research. Dale, take this as an invitation: we’d love to hear your views on this very fine line…
2. Skip makes a really good comment when he says that monetizing new media is something we all are struggling with. Tough question, but the ones that will figure it out will make some serious dough and probably also crack the black hole of industry analysts… SMB. Ahem.
Bottom line: The industry is changing fast on the surface, yet IT analysts still have to figure out which business model will allow them to deliver something close to a collaborative “reference library”, containing one version of the truth rather than many in-compatible open-source distributions. Other factors limiting the adoption of open-source research are the delivery mechanisms (frankly, sifting through blogs to gather intelligence is as tedious as resolving Linux driver issues). On the other hand, the enthusiasm of the Rebels and their innovative use of Web 2.0 tools generate a huge deal of goodwill in some communities and some are already making a living of the brand they’ve built.
Stay tuned for the final post in the series: Rebels vs. Dinosaurs: So What Does it Mean for AR?
Will the Borg be dis-intermediated?
The Governor, ancient Iraq and Gartner
Open source analyst business model?
Thursday, 15 November 2007
In this post, we’re coming back on the numerous conversations about the changing nature of influence and its impact on industry analysts.
Fred from V3 started the debate a while back even though his paper wasn’t picked up by many: New Opportunities for IT Industry Analysts. Maybe it is because bloggers have a short attention span and find reading short posts easier? It nevertheless contains a few interesting points about influence in today’s world. In particular, Fred advocates that Web 2.0 allows analysts to reach out to a much wider audience than before, especially in today’s world where awareness of IT issues has become widespread in business.
Stephen has a good point though in his Burning The Influence Straw Man post: influence is exerted at multiple touch points in any given customer by various influencers. He claims to influence bottom-up adoption (those geeks installing Apache on Linux in a Mainframe under their desk). He implies that because established firms are conservative, geeks listen more to the blogs and it drives innovation.
O'Grady is probably right about the influence on those buying technical issues, but what about the top of the food-chain, the suits types with thick wallets? Who influences them?
Many have said that Cxx are probably not swayed by bloggers, so who do they trust?
Research by KGC, Omniboss and SageCircle points out that they trust mainly peers, Industry Analysts and Systems Integrators. The latter ones can be worrying for IT vendors: after all Accenture or PWC have probably way less understanding about cooling issues in a datacentre or database licensing than themselves, have a questionable track record after all but clients do trust them because they’re “independent”. It is fair game for AR Professionals to advocate that analysts know better: they have a tight relationship with vendors allowing them to be ahead under the game: they’re briefed under NDA. Those AR pros who are confronted on a daily basis with cynical comments and questioning by analysts know in their inner self they’d trust a good analyst above consultants.
James-the-mammal has also got a point here, but we're not sure which one?
Large customers also know this and anecdotal evidence suggests that analysts are influencing almost all large deals: AR managers often get feedback from those hard-nosed sales colleagues about the infamous Borg analyst advising THEIR customer (at least for IT deals, this is less true in telco’s and services). Note in passing: as someone said last week, they always win a deal thanks to their superior sales abilities, and invariably lose it because Gartner pushed a competitor… Incidentally, it’s always the Borg, we rarely get summoned on deals where The Colony or AMiseRy are involved. Sad and worrying but true. We wrote a while back on why Gartner and Forrester will NOT be Disintermediated: established firms just cut the "Internet Clutter that has turned internet searching into an exercise in frustration" (Joseph Martin). IT managers need someone to aggregate, summarise, simplify and help them with vendor selection, contract negotiation, etc… For instance, we heard Ovum was very successful in picking what business Gartner left on the table when they exited APac.
So, is that it? Gartner influences deals and the bloggers influence geeks? Life would be wonderful and AR would be able to concentrate on a few very influential analysts, give them the VIP treatment and escort the others politely back to their SecondLife world.
Unfortunately, life is more like a bazaar than a cathedral: not everything can be measured or even understood and so is influence. Coming back to Carter, he concludes his post by saying that other established firms should follow Gartner’s lead in Web 2.0 adoption (Note to Carter: interestingly enough, there were no Web 2.0 sponsors at the Orlando and Cannes Symposium and we view Forrester as much more innovative in the use of social media tools –Web 2.0 is more than just blogs).
Where does this leaves us? After an appetizing title, we were waiting for a better main course but Carter stops short of drawing a conclusion on whether the insurgents are (were) influential enough for him to care.
This is where Skip brings another interesting dimension: speed. Traditional analysts will be overtaken by communities and, he implies, lose influence. On the one hand, he’s right: bloggers are quicker on their feed and the good ones have an audience many mainstream media would envy. This is because the fundamental nature of Web 2.0 is that it ripples through communities and so does the influence of bloggers.
Analysts' influence also ripples onto mainstream media: one could think of them as tattoo artists that spot trends early and help shaping thinking of a much wider community. This extended-reach factor can be quantified in the number of press articles containing analysts quotes: way over half of IT trade press cuttings reference analysts. However, community often equates quantity and not quality: the internet chatter has grown to such a point that it is increasingly difficult to separate insight from noise, especially since blogs posts are short and sometimes cumbersome to read. This is probably the most limiting factor on blogs' influence.
We have been saying, way before Duncan Brown, that AR should mute into IfR –Influencer Relations. It seems that some vendors are already doing so: some have appointed Influencers VP’s, running Influencers events, etc… It does not suit every company as it requires a great deal of openness, candour and political capital. But it can be done, sorry for the doomsayers.
Another point is made by good old Jonny: the Borg does not cater for SMB’s. But Dale sure can! Vinnie has also an interesting point in his post on Gulliver's Travels (all those chaps should work for a tabloid –great headlines, just miss the page 3 totty): his revenues come from users and he’s well quoted. Not more scientific than Stephen’s name dropping but nevertheless hard to ignore?
We quite agree with Vinnie than quite a few of those Irregulars and other rebels are smart, some maybe too much for their own good but unfortunately we have been wating too long for those “Lilliputs” to join forces. The Federation never came out of the garage black hole!
Bottom line: Influence is difficult to define and even more to measure. Because it is far easier to getting budgets and headcounts to focus analysts directly impacting deals, AR has traditionally aligned to those directly impacting deals, the likes of Gartner, Forrester, Ovum, AMR, NelsonHall, etc… This is not necessarily the right model for every vendor.
Other boutique analysts and firms, are also influential and derive their revenues from end-user contracts, either in some countries (like Penteo, Sievers, CXP…) or in certain segments like Gartner alumni Vinnie Mouthful at Deal Architect.
Finally, a third type of influencers are those with a high SOV in the media, like for example IDC, PAC or Quocirca. Others such James Governor of Redmonk with his Monkchips and the other ones picked up by Jonny have a definite impact in the blogosphere.
Stay tuned for the next post in the series: Are new Analyst Business Models That Revolutionary?
Wednesday, 14 November 2007
Was the whole thing planned? Just three weeks before “rather suddenly” leaving the Industry Analysts Circus, Carter launched this missile:Will established analyst firms become dinosaurs to the new media-oriented analysts?
This post has sparked quite a lot of noise on the AR blogs, and many interesting discussions and reactions, but nothing like ARmadgeddon’s usual cynical and one-sided views. Until today.
In his post, the ex-AR guru observes that traditional IT research firms (dubbed as dinosaurs in the post) are slow to adopt Web 2.0 while in the same post asking for proofpoints of the claimed influence of the new “insurgents”. Those proofpoints, he says, are essential for a vendor to commit all too scarce resources to service the needs of those new kids on the block.
The debates extends way beyond the moderns vs. ancients as many other bloggers joined in with points ranging from influence to business model –we’ll deal with these two aspects in a series of posts. Stay tuned for the next post in the series: Rebels vs. Dinosaurs: Influence is Everywhere.
Tuesday, 13 November 2007
Thanks to those who have passed some echoes from the Cannes Gartner Symposium.
Content seemed rather bland: the keynote was poor and lacking a strong theme carried through the event, mega vendors sessions have been replaced by sessions on a given industry (one server, one services, one software, instead of the old IBM, Microsoft, HP, SAP, Oracle sessions). The SAP interview was however more incisive than some of the previous vendor interviews.
The number of analysts on site has been reduced, quite a few did not stay the whole time, restricting the main pull for the event from an AR professional's standpoint: the ability to interact and have one to ones with many analysts in the same week.
The event was a step down from last year: it finished at 11 sharp and most analysts were in functions at some nicer places with vendors anyway.
The AR meeting was another let down from last year: apparently Gene Hall decided this crowd was definitely not worth his presence and dispatched some staff members who did a reasonable job explaining their research methodologies and the Customer Insights: this is an option that can be bolted onto the AR role to provide some insights on inquiry trends. It all sounds good and interesting... until you hear it's between $20 and 40k extra. They also said in passing that they were happy with the uptake of the AR role and had 340 registered users. This is quite surprising as we haven't heard of anyone in Europe subscribing to this role -we would be interested in some feedback here.
Some interesting statistics came from this meeting: Gartner has 47 research communities, take 57,000 inquiries per year.
Finally, someone asked about EXP analysts and consultants and it emerges that the briefings materials never reach those communities... although they advise end-users.
ARmadgeddon's take: Gartner Inc. (NYSE:IT) is under-performing in its events business (down 10%) compared to research (+18%) and consulting (flat) in their latest quarterly results. Symposium is suffering cannibalisation from successful summit events and reduced sponsorships. This might explain the recent tumble of their share price.
Monday, 12 November 2007
Here's a forgotten post, our apologies to Dan Olds from the Gabriel Consulting Group.
It all started on this post from
IBM Sun IBM AR Professional: Helzerman.com: interview with an odd Gabriel. We then started a conversation with Dan about research, and it turns out it's a small firm that still does primary non-syndicated research. So it's not all just fluff and opinion, which is refreshing (Dale and Clive [ouch, managed to put them in the same sentence, that hurts] will certainly agree...).
After this, Dan sent us some background on GCC, which is reproduced verbatim below. Not exactly concise but interesting, candid and straight.
ARmadgeddon's take: independent analysts can bring value to vendors is used appropriately. Do research them and check the links above for examples on how GCC was used by a vendor. For analysts, the Currie Motors motto "Nice People To Do Business With" might be a good positioning.
I started GCG in early ’02 with a partner. We didn’t initially intend for Gabriel to be an analyst firm, we were aiming to do strategy work with vendors coupled with a customer education program that would teach them how to better execute IT projects (a pet project/obsession for my partner). We were semi-successful in that the vendor side of the house earned revenue and the education program never really got off the ground. Disagreements over the future of the business led to a breakup and my subsequent re-directing of Gabriel towards analysis. There’s probably no reason to tell you guys about this, as this first incarnation isn’t really relevant to anything GCG does today, but it is where the GCG story began and thus might be of passing interest.
I started generating research reports in early ’03, but later moved towards doing more basic research so I could generate my own data to supply grist for my analyst mill (jeez, that was a horrible analogy). My first ‘big’ project along these lines was a survey of enterprise Unix shops that asked them if they are using their Unix systems as consolidation platforms – if so, why? If not, why not? I was very happy with the results of this survey – it gave me a lot of data and the results contradicted some of my own long-held beliefs – forcing me to change my mind about several factors. Another survey looked at buyer criteria for x86 servers (what’s most important? Purchase price, feeds & speeds, support, etc.?) and I also introduced our Unix Vendor Preference and x86 Server Vendor Preference surveys. I’m thinking about applying this survey model to other areas of the industry – storage, new usage models (looking at virtualization/consolidation again), etc.
My experience in the industry, up until GCG, is mainly on the vendor side. Here’s a quick bio:
My formal education is in business. I have an undergrad in Finance, plus a MBA from University of Chicago with concentrations in Finance and Marketing (although I tried to focus on strategy)
After graduation, I went to work for Sequent Computer, beginning as a competitive analyst and ending up in Strategic Marketing, trying to get a handle on what and where the company should go in the future.
I was then recruited away from Sequent by Cray Research, and was arguably the last employee hired by Cray (I accepted my offer that day SGI announced the Cray buyout). Even though the company was a bit precarious, I had received an NDA briefing on their upcoming E10000 system and knew it was going to be big. Cray was purchased by Sun Microsystems shortly after I joined Cray. One of my initial duties was to help roll out the E10k to the Sun sales force and customers. This was the start of many hundreds of customer meetings and presentations.
One of the big problems we had was how to justify such a huge server (then 64 cpu, 64 GB memory) to customers. We initiated one of the first server consolidation programs in the industry and I was the first manager of that effort. This gave me lot of opportunities to talk to huge numbers of customers and get a real feel for their pain points and possible solutions.
I was then recruited away from Sun by IBM, first working as their ‘big Unix expert’ in the mainframe division, then moving onto their pSeries/xSeries divisions. I left IBM in ’01, or actually they left me when they shut down much of their operations here in Beaverton, Oregon.
Before discussing how GCG is different from the rest of the analyst community, I gotta cover how I have seen the IT markets evolve over my career and where I see them going in the future…
One of the biggest changes from the 90s is that the IT department doesn’t have nearly as much access to the corporate checkbook as they did previously. IT spending has now come under corporate control and buying technology for its own sake is now taboo in more organizations. In short, now IT purchases have to undergo the same cost/benefit analysis as factory equipment or machine tools. Business management is now more firmly in control.
With the above in mind, the ultimate decision makers are more often people with primarily business backgrounds. I’ve noticed this change when making presentations to customers. While covering technical points, everyone nods their heads and acts like they know the score. Later on, in emails and conversations, these same folks furtively ask questions that reveal that they really don’t understand the topics under discussion. It isn’t that these guys are dumb or aren’t paying attention – it’s just that there this is complex stuff and there aren’t many folks who are willing and/or able to break IT mumbo-jumbo down into understandable chunks or translate the techie stuff into terms a business person can understand. I can certainly sympathize with these guys and I was (and still often times still am) in the same boat. I’m not the most technical guy in the world, so when I’m getting briefed or doing research, I’m constantly asking “Why is this important? How will it make a difference in the real world?”
On the vendor side, it is getting much more difficult to differentiate products. In servers, for example, most of the products work fairly well, aren’t hideously over or under prices, and are reliable. Kind of like the car market – most car manufacturers put out a decent product that is relatively standardized (same pedals, steering wheel, etc.) It’s also getting harder and harder to gain any sustainable competitive advantage that is technology based. All of the vendors have access to pretty much the same technology, some will have it sooner than others, but all have the ability to field at least an arguably competitive product to respond to an advance made by a competitor. So what’s a vendor to do? I believe they need to prove their differentiation and gain advantage by playing to the business value of their products and proving that value through customer experience. My vendor preference surveys are aimed squarely at showing how customers rate/rank their experiences with the various vendors on a wide variety of technology and support criteria. Since it is extremely difficult, if not impossible to objectively ‘prove’ that one server brand is better than another, the next best thing is to measure which brand of server customers (the large majority of whom have had significant experience with multiple brands) believe is best.
One of the tougher questions I wrestled with is how to explain how GCG is different from the hundreds (thousands?) of other IT analyst firms. Here’s my best shot: Remember how in high school, there were always the guys in wood shop or in the locker room who constantly talked about cars – the merits of turbo chargers vs. superchargers, Ford vs. Chevy, or, in better high schools, BMW vs. Mercedes? These discussions/arguments were never ending, but pretty interesting and entertaining for the car guys. I see many of the other analyst firms in this mold, they love the technology, the bits & bytes, and all the inner workings of things like TCP/IP stacks. But there’s another set of folks who are very interested in cars, but for entirely different reasons: rental car fleet managers. They need to know that the cars they purchase will reliably help them service their customers, if they’ll break down, if the auto manufacturer is behind them, if maintaining or managing the fleet is better/easier than before, plus a myriad of other considerations. More and more IT decision makers – the ones who actually own the check book, are much more rental car fleet managers than they are car nuts. These guys are the audience I am aiming at and who I think I can best help understand what’s important in the industry and what isn’t.
At this point, I’m learning more about this whole analyst business. I’m still feeling my way along, and have lots of questions about what to charge for things, if and how to develop a better end-user business, how to build relationships with more vendors, get more press mentions/speaking engagements, etc., etc., But it looks like I’ll be around for at least the foreseeable future, and I’m going to keep pushing forward.
Damn, that’s more than “a little background on Gabriel”…sorry for going on so long. It wasn’t my intention to give you the full double-barreled history+resume. Anyway, that’s the Dan Olds/Gabriel Consulting Group story. If you want to refer to GCG in a note, that would be great, but could you hold off until I get my new web site up? The site now is pretty crappy and static, while the new site should be less crappy (at least 50% less crappy by my estimates) and will have a blog – yeah, I’m late getting on the blog bandwagon, but at least I’m finally doing it. I’m pretty sure my ancestors were the ones who thought that fire was just a passing fad and that the wheel was just some sort of fancy frippery that would never be useful…
Friday, 9 November 2007
Friday, 2 November 2007
Analysts have usually little ideas how much work is involved in AR. Take scheduling for instance, it takes a hell lot of time to figure out where and when your exec might meet the analyst as both seem to be in a constant brownian motion between airports.
Stephen might have cracked gained many brownie points by publishing his schedule. Much easier than the dreaded Borg scheduling team, who comes back to your 3 days after you sent your request, and with a 30 mn slots. One more reason why you gotta love independent analysts: they're much more accessible if you need to do some message testing before a launch and easy to work with.
Another thing that AR professionals have to deal with is long, technical, boring briefing teleconferences. Maintaining your attention to jot down the follow-up points can be tough, especially after a relationship management lunch meeting. Don't read the Borg earnings release, there's nothing there: they're executing well, though not growing consulting very much. No new news. Best to try figure out what to do with your airmiles...
Daily Furl Headlines for November 2, 2007
From - http://www.furl.net/members/ARonaut
Analyst Equity: Penteo: a case study in defendable borders
Rated 3 in topic About analysts
From analystrelations.blogspot.com on November 1 at 9:18 PM
Enterprise Architecture: From Incite comes Insight...: So, why
aren't industry analysts providing deeper coverage of open source?
Rated 3 in topic Analyst business model
From duckdown.blogspot.com on November 1 at 4:42 PM
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Thursday, 1 November 2007
Daily Furl Headlines for November 1, 2007
From - http://www.furl.net/members/ARonaut
stephen o'grady's MyFreeBusy Calendar
Rated 3 in topic AR tools and techniques
From sogrady.myfreebusy.com on October 31 at 11:38 AM
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