Thursday, 15 November 2007

Rebels vs. Dinosaurs: Influence is Everywhere

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?


James said...

a couple of things.

1. i would still love to know what you mean when you talk about Stephen "name-dropping" - you said that on his blog, now here. Just a bit of explanation.

2. a lot of your links are broken (not even sure gary barnett is is in the irregulars).

3. dale has done some research into SMBs. That doesn't mean they are his core client-base. they aren't.

not sure if you saw my follow up to carters' post... and on that note-what the heck happened to carter/surely a story for you chaps

ARonaut said...

Thanks for your comments James.

1. On the name dropping -when asked to prove his influence, Stephen dropped a few clients name. You need to help us harder helping you advocating your cause guys.

2. We did not suggest Gary was part of the Irregulars, although he's certainly irregular at best :-)

3. Your precision on Dale is important: our formulation was elliptic at best. Yes, he can help vendors addressing the SME grail but does not sell directly to the mid-market.

4. We don't typically comment on agencies and vendors AR chaps but the rumours about Carter are indeed intriguing.

vinnie said...


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