IDC goes far and wide... but not to users?

IDC publised a press release on their web site and Tekrati detailing their results for the first time: as they are a subsidiary of IDG, which is privately owned. So far they've shyed away from disclosing financials. This behaviour change might indicate that IDG may be considering putting up a IDC on the market?

Here are the numbers anyway for CY06: $297 million, 12% increase over 2005. That's $109k per analyst (the claim to have 900). For Gartner (IT), this ratio amounts to a staggering $745k/analyst.

IDC does not break down their events and consulting business, although they mention it as an "important area of growth", claiming to reach 45,000 technology buyers and IT executives (we would love to know the breakdown).

They plan to extend their geographical and industry coverage -they have a much better geographical coverage than Gartner Dataquest and they seem pretty successful with their Industry Insights programme -they have invested $40m to further boost it.

What their press release doesn't mention though is their consulting business. The word on the street is that they're not really aggressive. The IDC brand is quite strong with users and IDC would gain technology buyer insight and influence worth every penny for vendors...

Talking heads

Kim Horner from the AR agency CustomerClix publishes a newsletter for AR professionals. In the the July edition, she provides some analyst ranking in the UK media, thanks to Apollo Surveys:

1. Clive Longbottom, Quocirca
2. Andrew Kellett, Butler Group
3. Joe Wilcox, Jupiter Research
4. Keith Humphries, euroLAN
5. Michael Gartenberg, Jupiter Research
6. Mike Davis, Butler Group
7. Rob Bamforth, Quocirca
8. David Bradshaw, Ovum
9. Mark Blowers, Butler Group
10. Andrew Jaquith, Yankee Group
11. Graham Titterington, Ovum
12. Gary Barnett, Ovum
13. Michael A Silver, Gartner
14. Nigel Montgomery, AMR Research
15. Gordon Haff, Illuminata
16. Carolina Milanesi, Gartner
17. Pierre Audoin, Pierre Audoin Consultants
18. Robert Enderle, The Enderle Group

The study is from May 2006 but it's nevertheless interesting and contains a few surprises. The list is actually counter-intuitive to a certain extent. The explanation is that journalists get their quotes from several sources: vendor press releases (see AR 101: Analysts and press quotes), research firms press releases (announcing new reports), personal relationships with analysts and finally proactive outreach from analysts. From a reporter standpoint, a great analyst is one that's always available (especially 5mn before a filing deadline) to talk about anything and everything, preferably with some numerical data (market share, index or else).

Bottom line: talking heads are not necessary those influencing deals (actually, it's quite the opposite) but they can help improving your firms' media profile (and make you best friend with your PR department).

Zimmerman launches Analyst Perspectives

Jim Zimmerman, founder of white paper specialists Tekra, has a new blog - AnalystPerspectives. It's run through another venture he's associated with, Books24x7 (Even we find it hard to track all of Jim's ventures).

When he's not maintaining an excellent directory of analysts, Jim's blog provides commentary on the IT and Telecommunications analyst firm markets. His first few posts are good. He has a weekly profile of a tier 2 and 3 analyst firms, including Chainlink, Saugatuck, Mesabi and Valley View Ventures.

Let's hope he keeps up the momentum. As Joe and David have found, the first year is the easiest! Now that John is back from his sabbatical, at least there's one guarantee of more AR blogging in the future.

ReForming Dynamics

We heard that Jon Collins (aka Jono, ex. IDC, ex. Quocirca, ex. Bloor, ex. MWD) just joined the Viles into FreeForm Dynamic, a firm that itself is an emanation of Quocirca. He's not the only one with itchy feet but, pfew, tracking analysts is a job in itself! When he's not busy changing jobs, Jon writes books: on music, more music or gardening.

Freeform Dynamics has now four analysts after Martin Atherton joined from the Datamonibores: Dale Vile, David Perry, Martin and Jon. Not to forget Helen Vile running the operations. They pretty much offer what Quocirca does (what goes around comes around): primary research, speaking engagement and white papers. They also publish research on their web site, covering about all the ICT segments: Communication and Collaboration, Infrastructure Optimisation, Customer Relationship Management and Resourcing and Outsourcing.

Read also:

• Making it up While Drinking
• The revolving door is in full spin...
• Ex. Quocirca founder launches Freeform Dynamics
• [Analyst insight]: John Collin's blog
• [Freeform Comment]: Jon Collins and MWD

AR 101 Series: Don't use a sales presentation with analysts

Most AR managers review a number of presentations each month, typically in conference calls or meetings with spokespeople. First-time critiques often result in recommendations for significant revisions because best practices for constructing the typical sales or marketing presentation do not produce the best flow or information content required for an effective analyst briefing. Unfortunately, when a sales presentation is used with an analyst, it frequently results in a negative perception of the company and its solutions by the analyst.

Some of the common errors are listed below.

• Starting with the solution rather than the problem. The best sales approach starts by showing the value of solving a problem. However, analysts often complain that vendors spend too much time setting up the scene and giving background, and too little time explaining what the solution actually does.
• Using the vendor's vocabulary, rather than the analyst's framework. Analysts work in models, so spokespeople need to gear each presentation to the analyst's model, rather than a generic sales presentation of the solution.
• If the analyst follows a narrower segment than your solution, then match your comments to their narrow focus. If you speak to a broad sales deck, analysts will go negative -- either they will assume you can't target the right analysts, or they will think you don't know what they focus on.
• Don't follow a script. Analysts want to feel vendors are open with them. Following the sales slides deck closely makes analysts feel that you are not confident speaking on other topics, and makes them feel that you are controlling the conversation too tightly.
  

What's the alternative? Focus on intended results and incorporate your understanding of the analysts and the workings of the industry analyst marketplace when preparing an analyst presentation, especially when confronted with a stubborn spokesperson who resists your suggestions for building an effective “deck.

Analyst Impartiality Questionned by NYT and the Motley Fool

A kind reader brought this article from The Fool to our attention: The Other Analyst Scam.

It links to an interesting article by Ashlee Vance from El Reg about the New York Times banning Rob Enderle from commenting in their pages after they got a complaint about a conflict of interest. The interesting point is is that while the NYT was having a go at poor old Rob they continued to use Gartner, IDC, Jupiter, Yankee and ABI! Incidently, it is quite ironical for the NYT to feel being in a position to patronise analysts about integrity...

As per one a comment on one of our posts, journalists should D.O. T.H.E.I.R. R.E.S.E.A.R.C.H. and check their sources before quoting analysts. They should also not quote any random number (but that would suppose they would have some understanding of market sizing methodologies -sigh).

The Motley Fool article insists on this point: market numbers are produced by firms (such as IDC, Gartner, etc...) whose business model depends on IT Vendors.


ARmadgeddon's take:

• Industry analysts will increasingly be pressurised to disclose who pays them and should be careful before returning favours in the shape of press quotes. In other words, transparency will condition their reputation and thus existence.
• AR Managers should not push analysts to provide blatant endorsement as they too often backfire. They should also use analyst quotes in press releases with caution.
• Journalists should do their homework. Like figuring out that a one-man-shop has little or no peer reviews and its coverage will follow more closely vendor briefings than their own research agendas. But maybe that's too much asking?
• Incidently, this also pressurises the Borg to review the disclosure rules and department separation of their Gartner Invest service following vendor concern.

Links:

• enderlegroup.com
• The Register: NY Times rattles IT industry with analyst ban
• The Motley Fool: The Other Analyst Scam
• The Register: Rob Enderle weighs in on NY Times ban
• The Register: NY Times bans Microsoft analysts from Microsoft stories
• The Register: IDC's missing Itanium report found at rival analyst firm
• The Register: Le Misancalculation: A one act Itanium tragedy by IDC
• Gartner Invest
• ARcade: Gartner Invest: Establish clear rules of engagement

Previous posts:

• Post-scriptum on "Yankee, analyst impartiality and circular references"
• Yankee, analyst impartiality and circular references
• IDC misses forecast by 1900%
• After the Sydney Symposium

Taxonomizing Open Source Analysis

James McGovern kicked-off the idea in this post where he suggests large enterprises only use large analyst firms as part of their ongoing efforts to curb the number of suppliers and because they simply don't know who the independent analysts are:

• Analyzing the Analysts (in Enterprise Architecture: Thought Leadership)

So if marketing and size are not being the only reasons for the Borg Empire Domination, what then can be done? There's been talks of a Federation but not much happened...

James came up with a simple (and thus great) idea: a wiki cataloguing Open Source Analysts. Duncan details it in this post and provides the link to the wiki:

• Open source approaches to analyst relations

This looks like a great idea, but there's a but: it will only work with active participation...

However, wikis could be viable as the main delivery mechanism for open source research notes or a way to organise research: end-user clients often cite the main reason for using Gartner is that it provides a one-stop-shop for research covering most IT and business topics. On the other hand, blogs are tedious to read and are not well/consistently archived/indexed/tagged. We thought ITD was going to be an answer but it does not seem to be gaining much commercial momentum (read Have you seen my plan, my plan, my plan?).

Take it as a call to the Open Source Analyst community: it should organise itself to provide a single-source (research) distribution (channel). The idea is not new and implies agreeing on a taxonomy, possibly working together on research pieces, vetting in/out members, etc... . The payback would be a body of research easily accessible that could have the potential to impact the whole industry and drive end-users and vendors to using indepent analysts. Think of a Wikipedia for IT Analysis, free of the Borg Dogmas.

Read also this post for more links on Open Source Analysis:

• Friday post: open source analysis, briefing blasts...

Wra-up: Borg Audits and more...

We've been alerted by a reader that the Gartner Borg is stepping up its "audits": they're trawling their useage stats and sending warnings to those they suspect are passing on the research. Oooohhh, no AR or MI professional would ever do this, would we?

We suspect this might has something to do with their upcoming product for AR Managers....
The issue lies with the fact that the guidelines around "unfair use" are not public and it sems different rules apply, depending mostly on the overall contract value.

We also heard that the Borg is trying to enforce a policy that its sales reps should attend every briefing. It's quite unclear what they are trying to achieve but we would appreciate readers feedback.

Talking about feedback, it has been abundant and entertaining on our Datamonitor post: Datamonibores penetrates the gametes. It looks like Ovum analysts are in two camps: happy ones with shares to cash in and the others.

PS: we would be interested to have some readers feedback from the Cannes Symposium...

Friday post: open source analysis, briefing blasts...

Random Friday thoughts...

• A Jack Berry from BigBlue has added us to his briefings distro list. Why we're not quite sure, but we thought we'd post the text of his briefing invite below. Do you think it's best practice? Apart from tiering his audience a little better, what else could he improve?
• The other James has blogged about Open Source Analysis, a subject we discussed a while back here, here, here and there. He asks a few good questions about the business model. The whole area is interesting: in EMEA, the independents are happy to cooperate, some collaborate (like writing books together) and others are talking about uniting against the Borg. For AR professionals, it is both a challenge and an opportunity. Good luck guys!
• Finally, we have seen interesting comments, as usual:
  - on Reviewing Gartner's Top Predictions - who will step up?
  - on IDC attacks the user market -slowly
  - and on On Blogger Relations and Influencers Relations
  

Links:

• Open source analyst business model?
• The Governor, ancient Iraq and Gartner
• Governor attack!
• Weekly roundup: Forrester, IT-director and Quocirca (Part I)

From: Jack Berry xxx@us.ibm.com
Sent: Wednesday, December 13, 2006 4:03:48 PM
Subject: Dec. 14 - IBM's Global Financing Quarterly Teleconference

I do not mean to bury you under multiple e-mails on the same subject but, Iwanted to be sure you know about the IGF IT Analyst Teleconferencetomorrow. I have a short list of analysts that may not all be on the moreformal list maintained by our Analyst Relations Support Group.I just picked up a new news items a few minutes ago, which I will share onthe call, that may prove of interest to those of you following IGF'sbusiness expansion strategy.SNAPSHOT: Join IBM Global Financing for a quarterlyupdate regarding the latest activities on financingofferings and some significant new areas of focuson Thursday, December 14, at 1:00 p.m. EST (18:00 UK).

IBM IT Analyst RelationsTeleconference Alert

WHAT
The call this quarter will feature innovative new offerings in the commercial and partner space, the latest on what IGF is doing with facilitating customer challenges with assetdisposition, and a look at how we are leveraging the totalcost of ownership with PC Financing. We will also presentbrief updates on the latest news from SMB and Vendor Financing.

HOSTS
Jack Berry, Manager, IBM Global Financing, Analyst Relations

WHEN
Thursday, December 14, 2006
1:00 p.m. - 2:15 p.m. EST
18:00 - 19:15 UK

HOW TO PARTICIPATE
To enroll in the teleconference, reply to Kate xxx, xxx@us.ibm.com or call 1-xxx-xxx-xxx. A conferencenumber and password will be provided with your confirmation.

PRESENTATION MATERIALS & REPLAY INFORMATION
The charts will be available on the IT Analyst RelationsWeb site at: http://www.ibm.com/itanalyst/teleconferences/prior to the teleconference. Replay and additional materialswill be posted following the call.

INVITATIONS TO THIS TELECONFERENCE ARE NOT TRANSFERABLE
This invitation is intended solely for the IT analystcommunity within your firm and must not be shared withpress, financial analysts or other companies.

NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
By accepting this password or participating in theteleconference or both, you agree that the informationdisclosed to you is confidential to IBM, and you furtheragree not to disclose, publish, disseminate or use theinformation prior to its general announcement by IBM.IBM IT Analyst Relations E-mail: xxx@us.ibm.comVisit the IT Analyst Relations site: http://www.ibm.com/itanalyst

Jack Berry
[signatured edited]

APS rubbishes the Borg ECM MQ

After our post on unpredictions, we have seen this post from Alan Pelz-Sharpe discussing the recent Gartner Magic Quadrant on Enterprise Content Management:
Trends: Of magic quadrants and buyers' choices [CMS Watch]

George has also posted a critique here:
9 Comments on Gartner's ECM Magic Quadrant [the ECM blog]

Bottom lines:

Despite the MQ reform, transparency around the inclusion criteria and weighting applied to scores remains questionable

Vendors need that using the MQ as a marketing tool may expose them in areas they're not in the leading MQ and develop rebuttals

Users need to read the MQ as a starting point in a product evaluation, not something that makes or breaks a deal -unless they have a fine understanding of the underlying methodology

Read also other posts on the infamous Borg Tragic Quadrant:

Bitter Andy defends his Tragic Quadrant (at least someone has balls)

Vinnie on the Gartner Offshore Application Services Magic Quadrant

Gartner: now, pay to quote!

Tragic Quadrant series: episode I

The Gartner Magic Quadrant: shaken, not stirred

Gartner's Magic Quadrants: a wind of change?

Governor, Magic Quadrants and collaborative filtering

The Gartner Magic Quadrant

Reviewing Gartner's Top Predictions - who will step up?

One of the common comments about Gartner is the poor quality of the analyst work. However, it is rare that anybody actually does the work of analyzing any Gartner research: as we have commented before. So, dear readers of ARmadgeddon, do you want to do commentary on Gartner’s predictions?

To provide an example, please see the “Comments” for an analysis of a Gartner prediction “In 2005, AT&T will be acquired by BellSouth and MCI will be acquired by SBC” which proved to be completely wrong in a very short amount of time.

If you think this is waste of time, please say so.

AR Classics Series: Buyer beware on analyst advice

Here's more decade-old wisdom we found on archive.org; this time it's an article by Efrem G. Mallach.

Admit it. You're an advice junkie. Need proof? The industry analyst business rakes in more than $1 billion annually, mostly from IS managers who seek advice on trends, vendors and products. Consultants take in even more for advice tailored to a specific situation.

If you spend that much on advice, you pay attention to it. Vendors know that. So U.S. vendors spend more than $100 million per year to get analysts and consultants in their corner. These efforts don't always work, but they help.

Why do vendors go to this expense? Because some parts of an analyst's advice are objective, but others aren't. It's one thing to say that vendor A's hub supports X ports at Y bit/sec. That's objective. It's another thing to say that vendor B is a technology laggard, or vendor C's strategy is flawed. That's where opinions come into play and where analysts' attitudes toward vendors matter.

What's more, feelings should matter. A vendor's treatment of analysts may not mirror its treatment ofusers precisely, but it's a guide. When vendors give analysts prompt, clear responses to questions, access to experts when needed and truly useful presentations, the analysts will conclude that users are likely to get similar attention. Analysts who get the opposite will conclude the opposite. The logic may not be perfect, but experience can't be denied.

Yet this situation of vendors courting analysts with varying effectiveness makes analyst evaluations inherently subjective. What's an IS manager to do?

• 1. Don't kick the habit. It's OK to need advice. Technology is complex and moves quickly. You can't spend all your time evaluating vendors and technologies. Go to people whose job it is, and pay them for what they know.
• 2. Remember you're at the end of a long information chain. Everyone in the chain helped shape what you hear. And everyone in the chain has an ax to grind, personal favorites or entrenched dislikes. They put their spin on the elusive ``truth.''
• 3. Get multiple analyst perspectives. If you can't subscribe to more than one service, read what others say in the press, pull summaries off World Wide Web sites or exchange views with colleagues.
• 4. Probe. Only a minority of analyst subscribers take full advantage of their call-in privileges. Join that minority. Find out what assumptions the analysts used, what their methodology was and how they chose the vendors to examine.
• 5. Be aware that analyst firms receive millions of dollars from vendor clients, too. Although few analysts will ``fudge'' evaluations to favor clients, they are more likely to know client firms in depth. This makes them more likely to write about clients and more aware of their products' true capabilities.
• 6. Check the record. What did this firm or even this particular analyst say about the vendor, product or technology a year ago? Two years ago? And what really happened? As mutual-fund advertisements say, past performance is no guarantee, but it's another calibration point.
• 7. Evaluate recommendations in the context of your firm's approach to technology. Is it leading-edge or conservative? Is management centralized or distributed? Does your business stress market share or current profits? The right recommendation for one company profile could be disastrous for another.

That's work. But if you don't do it, your analyst experience could be a bad trip.

After the Sydney Symposium

Gartner's Symposium event has closed up in Sydney. If you haven't been there, I recommend it -- and not just because the city's amazing. There's also a more practical edge to the discussions. They are less policed than in Orlando, and at times more surprising. Or perhaps it's just the jet-lag that makes them seem that way.

Mark McDonald reported on the results from the CIO Agenda survey, for example, which showed some pretty major changes over the last year. Few analysts' presentations would dare to suggest similar shifts over such a short period of time.

Despite the slight differences between the different Symposiums, the discussions over lunch in Sydney are pretty similar to ones back in the States.

Many people feel that Gartner Invest is an time-bomb. Even if Gartner is not issuing buy, sell or hold recommendations, they are naive to think that fair disclosure regulations do not already apply to vendors briefing Gartner. I've read reports that Gartner's Office of the Ombudsman is lobbying internally to have Gartner Invest communicating with both vendors' IR and AR departments. However, while we can review research, we can't review advisory calls with investors. The risk remains clear: private information given by vendors to Gartner under NDA is different from the public information that we give to investment banks. This is a calculated risk by vendors. When we brief Gartner under NDA, it's us who would suffer if this information got through to the financial markets.

Nobody believes Chinese walls will appear between Gartner Invest and the rest of Gartner. Some analysts have written research on the same topics for Invest and for mainstream Gartner. Even if there are separations, who is there to prevent verbal interactions between analysts? How can a vendor prove whether or not a leak spreading on Wall Street did or did not come from Gartner Invest?

All these problems seem massive. We just can't see how this can work. Gartner Invest should close, and close soon.

Of course, the other complaint we have is about pricing. Gartner's price hikes will go on, and on, and on. They just don't care about vendors' complaints because the extra revenue from higher prices is more than the revenue they lose from lost sales. The different product groups have a duty to make money, and they will keep on truckin'. Anything they can break out and sell as a stand alone service will be salami-sliced off from our core contracts. Gartner is adding ten sales people a month, and they will be have to work increasingly hard as the new products get successively less valuable.

On Blogger Relations and Influencers Relations

We have received some echoes of the last IIAR meeting. Apparently James came to present about blogger relations and independent analysts. He made a few good points about blogs allowing an open peer review, his other views are pretty well summed up here. John Simmonds, an IBM AR Manager, also posted on the subject here and there.

James' conclusions in a nutshell are that:

• In today's Web 2.0, conversations are in the open: blogs force corporations to rethink the line between what needs to be protected (actively) and what can be left in the wild
  
• Communications need to be crafted around communities, not articulated for the masses
  

This is both a significant departure for AR, traditionally more used to one-on-ones and NDA's. As we expressed before, it is a unique land-grab opportunity for AR departments:

• Step up a geAR or disappeAR, redux (updated)
• Step up a geAR or disappeAR!
  

However, it requires a rethink not only from AR Managers (Open Source Briefings anyone?) but also from analysts (Coo-petitive Reports folks?)

We'd like to ask the question back to James: how would you envision a Briefing 2.0?

AR Classics Series: Seven Ingredients for a Winning Analyst Relations Program

Well-known analyst Laurie McCabe was kind enough to write down for Kensington Group her suggestions for how she'd like vendors to treat her. As she points out toward the end, she's probably pretty typical in most of these respects. Laurie was at Summit Strategies back then, and is now VP at AMI-Partner. We thank her for taking the time to write this and urge vendors to heed her words carefully.

---

Industry analysts' opinions can influence how the press, customers, prospects, partners, financial analysts and competitors perceive a vendor and its standing in the market. Particularly in an age of information overload, many of these constituents turn to analysts to get an inside "take" on vendors' products and services.

In the three and a half years since I transitioned from the vendor to the analyst side of the business, I've responded to many surveys about what it takes to run a successful analyst-relations (AR) program. Lately, vendors seem to be putting more energy than ever into creating effective conduits to the analyst community. Judging by the increase in surveys conducted on behalf of larger companies with existing AR programs, many appear focused on making their programs more effective. More interesting, smaller companies, which may not have bothered with AR programs before, also are launching them and trying to determine what it takes to build a successful program.

Responding to this flurry of surveys has given me ample opportunity to think about the necessary ingredients for vendors to create successful AR programs. In the interest of sparing at least some Summit Strategies subscribers the aggravation and cost of broad surveys, I'll share my perspectives on this topic.

First, let me state that the views expressed in this article are purely my own--and do not necessarily reflect those of this firm or the analyst community as a whole. So, without further ado, here are my top seven suggestions for creating a win/win analyst relationship:

• 1. Call us early. Give analysts a heads up before calling the press about an announcement. The press expects vendors to brief analysts first--and expects us to have knowledgeable commentary ready for their articles. Leaving analysts in the dark about announcements that are within their areas of expertise, at best leaves the analyst with nothing to say, and at worst leads the analyst to think you don't have your act together.
• 2. Don't "spam" analysts. This, of course, is the other end of the spectrum--and you don't want to go here either. Unless analysts specifically request them, most of us don't want to be bombarded with daily releases about every new customer you get or every new person you hire--unless of course it's someone we know. Don't get me wrong, we're happy for you, but e-mail overload is at an all-time high. Try aggregating all this wonderful news on a monthly basis instead.
• 3. Schedule early, send briefing materials in advance, and, if a file is big, "zip it." Believe it or not, we are not just sitting around watching Oprah and soaps, waiting for a call to get a briefing scheduled in 24 hours! Try to schedule briefings a couple of weeks in advance--and get your materials to us at least 24 hours prior to the briefing. And, please, zip large files so that they don't take excessive time to download.
• 4. Know your analysts, and use their time wisely. Companies that profile analysts' areas of interest and target meetings and mailings based on their specific interests score big points. Big vendors need to send analysts information relevant to their areas of interest, but they shouldn't overload us with press releases about everything going on in their companies. Similarly, briefings are much more productive when the vendor's representatives align with the analysts' areas of expertise. Use marketing personnel to brief strategic and market-oriented analysts and technical staff when briefing product-centric analysts.
• 5. Use what you pay for. Take advantage of any paid analyst-consulting time. We are going to tell you what we think anyway, so why not test your message with selected analysts that you respect before making a broader announcement?
• 6. Use technology effectively! Everyone's time is getting spread too thin, and many analysts work remotely. Conference calls are adequate for contacting them, but I'm surprised at how few vendors utilize some of the easy-to-use Web-cast solutions available (such as PlaceWare, which requires no software downloads beforehand) to provide more interactive calls. On the flip side, please avoid using solutions that require us to download something beforehand--the odds are good that we won't have time to.
• 7. And schedule free time earlier in those events! If you are going to fly us all to a posh, tropical resort for an event, build recreational time into the beginning or middle of the schedule. Many vendors tack on all kinds of amenities--golf, tennis, spa, road races, sailing tours, etc.--at the end of events. Many analysts end up skipping these to leave early, and vendors miss a key opportunity to bond a bit more personally with their event attendees.

Despite my disclaimer above, I think that most analysts share my opinions. These tips seem pretty straightforward to me, but I keep getting surveyed about them--so maybe they're not. The bottom line is that, as with any other target audience, it's about building relationships. Vendors that design their AR plans to foster timely communications, open dialogue and mutual productivity are on track to create a winning AR program.

Datamonibores penetrates the gametes

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.

AR Classics Series: One-Stop Shopping: Consultant Programs Provide Aisles of Options

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.

VENDOR OBJECTIVES

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:

1. 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.
2. "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.
3. "Is there anyone else who can authorize me to get this information?" Sometimes there is.
4. 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.

AR Classics Series: Don't Let Yourself be Misled by Analyst Bias

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.

1. 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.
2. 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."
3. 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.

IDC attacks the user market -slowly

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

They are:

• 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...

AR jobs

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.

Confrontational?