Ovum launches RSS feeds

Ovum had launched RSS feeds for all their content: http://www.ovum.com/rss
It's good :-)

(Just a tip guys: replace spaces by %20...)

Gartner, a natural monopoly (Analyst Equity and Gartner Watch)

Duncan Chapple from LighthouseAR posted an interesting debrief of a AR meeting in coocooland on his Analyst Equity blog: Heard in a San José boardroom.

He reports that Gartner will increase prices and provides an interesting analysis of the impact for Gartner, competitors on both their pricing strategy and the analyst salaries market.

Overall, we agree with his views, as this confirms our previous analyses (Revealed: why Gartner took over META!!!): the borgs are increasingly behaving as a natural monopoly.

Two interesting side comments:

1. On the Gartner Magic Quadrant: Duncan suggests it is used for blackmail purposes. We'd say, no new news here! The fact that Gartner feels the need to re-inforce their ethics only means that the influence game is increasingly subtle and moving elsewhere.
Joe Guralnick makes a very good and disturbing point in his Gartner Watch blog: the borgs are "using MQ placements as a pressure point for vendors to divulge more financial data than is normally reported".
This is extremely unnerving and vendors should not fall into this trap: not only it would cause them to be non-SOX-compliant but it has also the potential to influence their share price. Unless of course one is bored with the job...

This said, Gartner are changing the Magic Quadrant process for the better (incorporating some of META Group's superior METAspectrum methodology and addressing common concerns) and our opinion is quite positive -but the proof is in the pudding.

2. Duncan's post also suggests that Gartner wants to "jettison some vendor business" by increasing prices. Mixed signals here, on one hand Gartner claims to be interested by vendor business while on the other hand prices are going up.

Our conclusion is that Gartner is trying to leverage research more (increasing prices at constant expenditure) and is quite unsure about which way to go with their consultancy business. As we reported before (Resistance is futile), they have slaughtered most of META Group Consulting (MGC): it was the fasted growing part of META but consulting is also a lower margin business than selling reprints.

Deal architect: analyze this!

Great post from Vinnie Mirchandani on deal architect: go read it, it's enlightening and not only because he likens Gartner to the Evil Empire. We'd stick to calling them the Borg, but agree that quite often these ego-driven cyborgs pretend being in the movie rather than sticking to being movie critics:

"We are the Borg. Lower your marketing and engage with analysts. Your messaging and uniqueness will be replaced by Gartner-speak. Resistance is futile."

That's of course when vendors forgot to sacrifice a few SAS days to the altar.

Back to Vinnie and his 5 perspectives -with a question: if vendors spend too much on AR, what do you say about marketing, PR and advertising? AR is usually a (very) small fraction of those budgets but reversely their ROI is usually a fraction of that spent on AR. The case below is a fictitious mid-sized ($1.5b) tech vendor, with a mix of direct and mostly channel sales:

• AR: $3.75m or .25% of revenue
• PR: $15m or 1% of revenue
• Marketing: $45m or 3% of revenue
• Advertising: $75m or 5% of revenue

The ROI for all those disciplines is quite varied, but it's safe to say that if a single analyst makes a positive recommendation for a single large deal, the AR investment is easily recouped. One word of caution: this implies the AR programme is built as a long term investment and that the company engages honestly in a two-way relationship with the analysts (i.e. not in media relations "push-mode", which is the best way of annoying analysts without getting anything back).

As far as the other disciplines are concerned, it would be interesting to hear from someone who has ideas on the subject, but we would argue that their ROI is way more difficult to prove...

Ombudsman -redux

More on the Gartner Ombudsman...

Firstly, thanks to James Governor already for digging the definition for us in his post.

In another interesting post, Joe Guralnick concludes that you can't leave this role to the Gartner Borg and that the industry needs a 3rd party regulator, somewhat like the SEC or the FSA (but hopefully better than the FDA). Many analysts question privately why the assimilation of META by the borgs did not give rise to an anti-trust investigation!

And finally, just a precision on ARpro's post: in fact the department dealing with vendors (aka technology suppliers in borg-speak, as according to Gene's kids a "vendor" is one selling food at baseballs matches) is called "vendor relations" (or maybe supplier relations, gives you an idea of how friendly in negotiation they are).

So we have the Gartner copyright police on one side and the other Ombudsman, to which Gartner gives an entirely new meaning -their role is to protect their independence (including from Silverlake?) rather than being "someone one that investigates reported complaints [...], reports findings, and helps to achieve equitable settlements" (Merriam-Webster). Looks like Gartner leaves vendors between a rock and a hard place. We agree with James' advice to Gartner: "You guys need to get easier to work with, not harder."

Read also our previous post on the subject: Gartner Ombudsman Strives for Control

Gartner Ombudsman Strives for Control

James Governor's blog highlights one new rule from Gartner: "now customers can't point to the magic quadrant without also including a full research note". Copyright law allows one to cite documents [not to reproduce them in full]: by introducing this policy Gartner is getting clients to waive that right.

This substantially reduces the ability for Gartner's research to be widely used by people in smaller client organisations, which as universities, which cannot afford larger reprint contracts for [for example] citing an MQ in a student's essay or media organisations which might want to cite Gartner research without getting prior buy-in to their article from Gartner.

Another move towards an AR association?

Carter Lusher is hosting a meeting in Palo Alto on Wednesday, and it looks like there'll be a lot of us there. It's a great opportunity to discuss whether we can develop some sort of analyst relations association. However, there have been a number of attempts like this over the years and it's worth thinking about them. If we can have an honest discussion about why projects by people as talented as Kensington Group and the AIARO did not work out, then we have a serious chance of making something work.

ARmadgeddon by email!

We've been doing a bit of work recently on our blog: added the icons on the right hand side (easier feeds subscription, just let us know if you want more aggregators) and at the bottom of this page: yes, you can just now enter your email and get ARmadgeddon by email!

Ovum makes a move!

Sorry for the headline: we were looking for something snazzy and quite unusual this Monday....

Check Duncan's blog: Analyst Equity: Ovum buys RHK, which is another Telco analysis firm.

And here are the latest movements -they've hired a few guys, including good old Stratos from META: Ovum Strengthens Global Team Tekrati Research News

We can imagine the discussions they had at board level: business is OK, right. Should we actually DECIDE something, now that there's an opportunity with Gartner's decimation of META? You and us would have thought they would have expanded into the fastest moving business for IT Analyst Firms: consulting. Or they could have started to cover SOMETHING ELSE, like for instance hardware, industries or else as users are looking for a second opinion (who wants to give it all up to the Borg?) and Forrester, RFG, AMR and the other user focused firms some cases have ZERO PRESENCE.

Nah, they've decided to stay as they are, well within their comfort zone...

deal architect : Analyzing Analyst Economics

deal architect : Analyzing Analyst Economics is a fascinating review of the analyst houses, partly from the investor's point of view as well as from the research buyers' point of view. Great reading.

After GigaWorld: the future for Forrester

Analyst Equity has a long (long) analysis of GigaWorld Europe, and what is shows about Forrester's reaction to META's acquisition. Interesting reading...

Gartner's Magic Quadrants: a wind of change?

According to several sources, Gartner is preparing a major revamp of their Magic Quadrants, maybe the borgs are reading Joe and us?

• Methodology: a consistent approach will be implemented through something like MetaSpectrum or ASEM. Basically, there will be a set of criteria, each with several metrics giving a scoring in several dimensions underpinning each quadrant. This is a very positive move: since the criteria will be published, the process will be far more transparent and the result more credible.
• Process: Gartner Clients will have more visibility to the process. No words on frequency, a key issue as we said before.
• Scope: market definitions will be and must be defined. This is the weak points of the quadrants: they depict a marketplace, making them a great marketing tool for vendors but do little to help users making an informed decision on technology choices. An issue based approach would be more beneficial for them.

Furl'ing: Ovum, Aberdeen and Gartner in the blogs

We had an interesting time today reading other AR blogs:

• Duncan Chapple from Lighthouse says in Analyst Equity that Ovum Consulting grows 23%. Wow. Have the finally seen the light or hired some sales guys who can actually pitch a vendor?
• It looks like David Rossiter from Sunesis found an interesting tool to measure analyst impact on press, read it in Analyst Insight. Has anyone tried it? (note to David: this is good, Furl is better)
• And Joe Guralnick explains in Gartner Watch how to negotiate with the borgs. Enjoy!

A new Aberdeen arises

Analyzing the Analysts Azul Partners, a research company that writes supportive marketing content for its clients, has been hired by Aberdeen Group. The master has become the student: this is exactly the sort of research that Aberdeen was disrespected for in the 1990s. Its reputation for bias was legend. Now the firm has a new, and better, business model. However, old habits die hard. Aberdeen has commissioned a report (http://www.azulpartners.com/Downloads/AzulPartners_TheRealDeal.pdf) which shows their firm to be every bit the equal of Gartner.

Azul's report has the same problems as those of the 'old' Aberdeen: In tendency, perhaps the findings are partly correct. However, the stark extremity of the findings leaves the whole thing very doubtful. Aberdeen Group may have a new model, but it seems that Azul is the new Aberdeen.

Governor, Magic Quadrants and collaborative filtering

Another great post from another Governor: Big Analyst Firms: Are Silos Killing Benefits of Scale?
As usual, there are a few gems within the random thoughts, some are particularly interesting for AR professionals:

• most analysts don't like to read each others research
• this implies knowledge doesn't percolate through big analyst firms

James also quotes Dan Schollers (was a META analyst):

"Scale matters for analysts, because a good portion of what customers ask for is, in effect, a collaborative filtering exercise. As you know, for those filters to be accurate (even one that is mediated by a smart person) they require large scale input, or they are subject to all kinds of strange distortions."

This is a clever way of saying that analysts aggregate end-users interactions into something potentially interesting for technology vendors: "trends".

Back to the quadrants:

"Who builds the magic quadrant - all of Gartner or one specialist? That is not an academic question. Wouldn't it be better, anyway, to aggregate the views of every analyst in the market covering a technology. That way we could provide better data to our customers and consult to that. Perhaps this idea will gain currency through an association. I doubt it though - canvassing at Gartner and Forrester events hardly seems the ideal way to get in touch with a range of analysts..."

'Governator' hires AR expert

Schwarzenegger Announces Appointments Robert Glazier, formerly responsable for analyst relations at 3Com, is now Governor Arnold Schwarzenegger's deputy communications head. Ar really is a great world for developing transferable skills!

Gartner's MCI blunder

We can't resist publishing an an email we received from Silicon Valley Guy reacting to a BusinessWeek paper “One Big Qwestion Mark” in the May 16th issue about Qwest and Verizon going after MCI. Read it, it's quite entertaining. Thanks SVG!

"Unfortunately for Gartner, its track record on correct analysis on this topic is rather slim. Jay Pultz and his colleagues got most if not all aspects of the most recent round of telecommunications mergers wrong.

In the Gartner Research Note G00124887 “Our Top Predictions for 2005, and Beyond” which is part of the annual Predictions series that got it big time wrong on telecomm acquisitions. A number of interesting points about this prediction:

· Qwest was never even mentioned
· Verizon was dismissed as a potential buyer of AT&T or MCI
· BellSouth never made a play for AT&T or MCI
· Is was SBC that bought AT&T, not BellSouth
· It appears to be Verizon that will buy MCI not SBC
· This prediction was wrong within only a couple of months

What does the analyst being so wrong mean (in such a short piece) for clients relying on the recommendations of the analysts?"

Here's the incriminating Research Note as posted for free (with compliments from Gartner) on their web site:

"Prediction: In 2005, AT&T will be acquired by BellSouth and MCI will be acquired by SBC.

A number of forces are coming together to make this prediction possible, and then improve the likelihood that it will occur.

Regional Bell operating companies (RBOCs) such as BellSouth, Verizon and SBC no longer have regulatory restrictions concerning what network services they can offer. In the past, they were unable to acquire interexchange carriers, such as AT&T, MCI and Sprint. The RBOCs wish to be leading fullservice providers.

RBOCs have the financial strength to conduct mergers of this size. AT&T is more likely to be acquired by BellSouth due to past relationships and negotiations. The direction and financial situation of Verizon — and the apparent lack of interest of its key executives — make it less likely that Verizon (compared to Bell South or SBC) will make a major acquisition. Therefore, MCI is more likely to be acquired by SBC. AT&T and MCI are No. 1 and No. 2 in market share in long-distance services to the Fortune 1000, respectively, but their long-distance revenue has been declining more than 10 percent per year, primarily due to RBOC inroads in consumer long-distance voice. AT&T and MCI are financially constrained to grow or acquire new businesses to offset the revenue declines. Although the RBOCs would rather wait for such mergers, other companies' interest in MCI and AT&T will compel them to move quickly rather than later. "