It's great to start the week with a laugh, especially after spring break, so thanks to the reader who sent us a link to http://www.canalys.com/pr/2007/p2007041.htm.
In that piece of startling modesty, Canalys (who?) announced that it is "recognized as a first-tier global analyst firm." With revenues of $5.6m, almost exactly Gartner's spending on office plants, we think the first-tier firms have nothing to fear. Canalys has revenue of $200K per analyst/consultant, so it is still a little short of Gartner's $880K.
Monday, 16 April 2007
Which are the first-tier global analyst firms?
Subscribe to:
Post Comments (Atom)
hits!
28 comments:
You should be ashamed of yourself for mocking these guys. Getting a small analyst firm over the $5m barrier is the hardest thing to do....many try and may fail to break $1m!
The quality of their research is way way better that the garbage IDC and Gartner churn out - companies like Canalys are the future, so give them a break. It's time the industry got rid of these idiotic analyst relations goons who only care about their Symposium or Directions tickets and what positive marketing they get from schmoozing the "analysts" at these places. The quicker these fools get weedled out the better.
Couldn't agree more - long live the small, the niche and the interesting!
Analyst firms should be tiered on research quality, reputation, differentiation, focus and their ability to influence decision-makers. Even if a firm has 10 analysts, that is enough critical mass to deliver, and is often more than what giants like Gartner devote to covering some areas.
A small analyst firm who relies on providing advice and decent reports rather than whoring themselves out for "opinion" cash from the conference circuit? Well good for them, as anon#1 says, and good luck to them and shame on you for knocking them ARmageddon.
Seriously folks, a firm that has just crossed over the $5M hurdle is hardly one of the leading analyst firms worldwide, unless of course they are the leading analyst firm covering some very niche corner of the market.
Analyst firms come in all shapes, sizes and capabilities. The trick is to match those capabilities to your specific needs, whether it is influence, advice, direction, etc. Without that forethought and subsequent analysis of investment, you end up getting what you pay for.
Based on above comments from anonymous posters, it appears to this reader that they must all work for small, barely $5M/yr global leading analyst firms as well.
I bet you're not really "John" are you? Let's face reality here - if you want deep intelligence on something you go to an expert who has deep knowledge to help you make decisions. Just take a look at the experience and calibre of the Canalys staff:
http://www.canalys.com/staff/index.htm
These people actually have real industry knowledge and experience. If they want to call themselves a top tier analyst firm, then good for them. If you don't care about good quality and just want your big brands, hob-nobbing at events and glossy branded white papers with nice magical grids, then that's your choice. Just don't say you actually get research!
And no, I don't work for a small analyst firm.
The real arguement here is not on the merits of Canalys but how are tierings evaluated? Is it as you suggest by revenue per analyst/consultant?
Personally I think you have to look at the analyst and measure their influence.
The sole reason why an analyst is important is that people take their views seriously. My subjective view is that any analyst that has a strong enterprise (like Gartner) or media (like RedMonk, Quocirca) influence is a tier 1 analyst regardless of where they are working.
Now that Geoff Blaber has joined CCS Insight does that make him less influential? Will he have thrown away his contact book?
It is time to stop looking at the analyst house and instead look at the analyst. Best practice analyst relations focuses on bespoke programmes for individuals and does not throw everyone into the same bucket.
My post backs this up
Jonny,
You are 100% correct. Most of the smart AR execs follow the analyst individuals regardless of where they work - it's all about putting credible thought-leaders in front of their execs. They actually see their job as investing in relationships with those individuals, not their companies. Sadly, there are still some third-rate AR people hanging around the industry who only recognize box-checking with the big brands and don't care whether the analysts know anything. In fact, if you ever sit in a Forrester/IDC briefing the goal of AR is to have the analysts ask as few questions as possible and their execs speak for the entire time. The big analyst firms prefer "nameless" analysts as it dilutes their own brand when clients request individuals. Bottom-line, the big brand analyst firms are more like market communication vehicles than"research/analyst" specialists.
CMS Watch is a tier 1 analyst firm in the Content Management space, and for many vendors by far the most important analyst firm out there - why? Because we influence a hell of a lot of deals worldwide.
However, we are small, and outside of our niche are unknown with no or little influence.
As we are 100% vendor neutral (no consulting, no white papers, no hotels, no flights etc etc) it makes us difficult to deal with from the perspective of AR. Part of me has some sympathy with that - but I suspect that this will become increasingly a common problem for AR to deal with.
Real experts, really influencing buyers - who have no dependency on the vendor for revenues at all....its a tough nut for AR to crack, and some just can't get their head around it and continue to believe that Tier 1 simply means big analyst firm
Alan - good point. Your company is a fine example of what I was saying.
What I would add though is that I wouldn't take the vendor neutrality to extreme limits. A few years ago, Forrester had the same policy until they realised that they could still be impartial whilst having their T&E covered.
If you are a small company then savings to the bottom line are crucial. There is no point in being a tier 1 small company if you don't have the funds to keep your firm alive. After all if you don't go to the analyst meetings because of the costs of flying to X are prohibitive then you are missing out and then your views are less relevant.
Agree with Jonny that it is influence that counts.
When Clive Longbottom and I were building Quocirca, it was clear that smaller firms needed to find leverage from somewhere as they don't have the bandwidth to participate directly in procurement cycles - hence the emphasis on driving research and opinion out through the media.
The media driven approach influences investment decisions significantly, but more at the budget allocation, mindset orientation and selection criteria defintion stage - and for those who have ever worked in sales, you know how difficult it is to change these things once they are set.
James and Steve at Remonk hit on the blog and community angle to drive influence in that way, and in fact, you could argue that James et al do a lot of influencing of the influencers with their inclusive and open approach.
And on the subject of Canalys, I have great respect for those guys, who are clearly nibbling bigger and bigger pieces IDCs lunch by delivering what many on the vendor side have told me is a superior and more cost effective service.
Before we started Freeform Dynamics, I spent a lot of time looking at different analyst models and the formulas that worked from both a business perspective and influencing perspective, and while there is clearly an ongoing place for the juggernauts, us little guys have role to play too.
And yes, I do work for a sub-5m turnover analyst firm :-)
I agree with you both Dale and Jonny, I guess my point was that there are new business models emerging.
In fact we (CMS Watch) are heavily involved in procurement cycles - and can afford to attend analyst events etc. The difference is that we are there for the buyer and user - not for the vendor. And we are focused on one key area - Content Management. In this sector we are a Tier 1 vendor, but here is the rub, its of little interest to us if the vendor Tiers us up or down. And that is a difficult for vendors to deal with.
I am not suggesting our way is the only way - its not. And nor is it a route to great analysis.
What I am suggesting is that AR needs to realign its efforts (most have not) - and recognize that this industry is changing. Gartner is omnipresent - but in my personal experience over the last few years with buyers - far less influential than many AR folk believe. In many quarters it just doesn't carry the same weight as it did, Gartner is just another data point.
Conversly to give credit where its due - Forrester seems to be influencing a lot of deals.
Size does matter - but the size of your company may not be directly relevant to the scale of your influence.
All this talk of size is distracting. Jonny hit the nail on the head thus: "It is time to stop looking at the analyst house and instead look at the analyst."
Tiering is important as the alternative is a scattergun approach that will be unnecessarily expensive and which is unlikely to achieve much apart from minor publicity.
However, the revenue of the analyst firm should be no more than one of several contributing factors in the tiering process. As Alan suggests, the source of that revenue is at least as important.
Canalys has some excellent analysts who should be considered tier one by those vendors that are relevant to their coverage areas. I find that their insight frequently comes from angles that are ignored by analysts at larger firms, which results in a better understanding of the marketplace. Valuable stuff indeed.
I wrote more about this whole issue over at H&K's AR blog: http://tinyurl.com/28f2a7
There are some interesting points raised here. Having worked for many years with a big-brand analyst firm before moving to a boutique research firm, there is a clear pattern with how there "Tiers of Influence" develop. Most of the successful analysts in the boutiques built their reputations in the big brands before having the ability and confidence to move to a small brand and take clients with them. It is those analysts who have already established their "Tier" with the clients in their market niche who tend to retain that as a result of their influence and insight. From personal experience, you have to work even harder to maintain your reputation once you take away the comfort factor of having the big analyst brand behind you - you need to prove to your clients that your research is of a higher quality and your influence factor remains at the same (or higher) level than before. It's hard work I can tell you! That's why we see many well-known "career analysts" go back to the big firms later in their careers. I have nothing but admiration for those analysts who are brave enough to go to the smaller guys, but give some credit to the big brands for giving them the platform with which to develop their reputation in the first instance.
Things have moved on quite a bit since the original post.
It is critical that AR professionals look at the analyst and not just the company they work for. Their influence can be directly measured based upon:
1) Providing guidance to enterprise buyers
2) Visibility in the media and online world as experts on specific areas.
3) Guidance they can provide vendors with their messaging.
My new post backs up this point
Topic: Roles of the Analyst – Market/Sales Influencers, Decision Support, Smart Advisors, Sales Support
A common misunderstanding that I deal with is that many boutique firms and single practitioners do not know that there are multiple communities with my company that interact with the analysts for different reasons. These analysts often assume that AR handles all the roles and get angry because they assume that because AR won’t brief them, then they cannot sell their services to that vendor. Wrong. The analyst is simply talking to the wrong vendor employee. While the communities different from one vendor to another, here is a high level description that works in many circumstances:
Analyst relations (AR) – Educates analysts who influence sales deals on the vendor’s capabilities so the analysts can appropriate position the vendor to IT managers with budgets.
Market intelligence (MI) – Buys syndicated market research and commissions primary research projects for decision support purposes. Often MI is mainly interested in market share numbers.
Executives – Execs will often have contracts with smart people whose opinion they respect to use as a sounding board. Sometimes these are analysts/consultants who were formerly at large firms and then left. Just because they left their prior firm does not mean the analyst got dumb, but often their market influence drops dramatically so they are not relevant to AR, but that does not mean that an executive does not appreciate the advice.
Competitive Intelligence (CI) – Group that provides information to the sales force about the competitors’ products and assists with request for proposal responses.
Bottom line is that the analyst needs to understand how each vendor is set up and then target the appropriate community. Merely yelling at AR because they won’t buy your services might be a waste of time if MI is the one who owns the budget.
- - -
Because most blogging software is really not set up to handle threads within a series of comments on a single post, I am putting “Topic” categories at the top of my comments as kludge. Perhaps ARmadgeddon can break some of these out as separate posts to make it easier to have a thread.
BTW, I am not hiding behind “Anonymous” and if anybody wishes to get in touch with me to debate this offline, I am more than happy to take your phone call. BTW, I expect to get flamed by “Anonymous,” so be it.
Topic: Analysts need to demonstrate their smarts and relevance to the right vendor community
Most analysts assume that everybody knows how smart and influential they are. Sorry, but that is dead wrong. Then the analyst gets angry, stamps his or her foot and yells about how smart and influential they are. Wrong again. Merely saying you are smart and influential proves nothing. Just like a vendor saying that it is the leader in a market means nothing unless they have something to prove that statement.
BTW, Gartner analysts fall into this trap as well. Just because they work at Gartner does not mean that AR, MI, CI or executive will believe that every Gartner analyst is smart and relevant.
Analysts, from single practitioners to the largest firms, need to develop appropriate proof points to demonstrate their smarts and relevance.
- - -
Because most blogging software is really not set up to handle threads within a series of comments on a single post, I am putting “Topic” categories at the top of my comments as kludge. Perhaps ARmadgeddon can break some of these out as separate posts to make it easier to have a thread.
BTW, I am not hiding behind “Anonymous” and if anybody wishes to get in touch with me to debate this offline, I am more than happy to take your phone call. BTW, I expect to get flamed by “Anonymous,” so be it.
Carter - you have done an excellent job of laying down how the analyst ranking system works in a firm like HP (which has done an awful job of communicating its value in recent years as it slips ever further behind IBM, Accenture et al. in the "tiers" of vendors delivering IT services).
As a seasoned AR pro, the fact you clearly haven't mastered how to post a blog comment correctly just about sums up how outdated this system is (sorry Carter, couldn't resist that jibe). The "analyst influencer" world is changing significantly. If you were at Sapphire recently, you would have noticed how the top bloggers got all the "Tier 1" briefings and the average-Joe from Gartner/IDC got the lower level executives. Perhaps someone from SAP's AR team can pipe in here - they seem to be ahead of the curve in ranking influencers in the market... Bottom-line, todays' forward-thinking IT firms are looking at new ways of infuencing the real market influencers. Gartner and co will always be around, but their world is under threat as the influencers become more innovative and diverse.
Topic: Response on blogs jibe
Hi Anonymous (4/28),
Thanks for the jibe. Actually I have a personal blog that just passed one year and 500+ posts. I get contacted on a regular basis by PR types and companies wanting to get some visibility on my blog. So I know a little something about blogs. My comments about blogging software reflect the wish that comments were handled better.
Before responding to your comments in the second paragraph, what do you know about HP's blogger outreach program?
Topic: Why assume that an IT vendor does not reach out to bloggers?
A common criticism by comments here and on other blogs is that large IT vendors like HP do not get or interact with bloggers. Anonymous (4/28) implied as much in his or her comment about Sapphire. Unfortunately, that assumption is often wrong.
For example, HP has a blogger program that resides in Corporate Media Relations that includes daily blog reports, formal blog opinion tracking and analysis and outreach. At our recent Gaming Summit in San Francisco, way more bloggers were invited than analysts, because relatively few analysts cover this $65bn market.
Topic: Why assume that AR is against bloggers? Why even assume that AR should be responsible for blogger outreach?
Another common criticism is that AR is ignoring bloggers and perhaps even blocking their companies from addressing this community of influencers. Again, that assumption is often wrong, especially here at HP.
AR pros like myself – along with PR colleagues – pushed to get a formal blog outreach program started at HP way back when. Because our program resides in media relations, I personally do not have to worry about day-to-day "BR" activities (thank goodness because I do not have the resources), but I do review the daily blog roundups and the blog analytics reports.
I am personally way more involved in encouraging blogging by HP domain experts, which is where HP lags behind companies like Microsoft and Sun. We have a lot of wicked smart folks here so there are a lot of potentially great blogs just waiting to happen.
The other thing that puzzles me is why even assume that AR should be responsible for blogging. There are already “R”s – AR, CR, IR, PR – in place so the attacks on AR for not doing more with bloggers are odd. Perhaps blogger outreach should have its own “R” and not reside in HP PR, but there is no logical reason why blogger outreach should necessarily reside in AR.
Interesting comments from the anaonymous person, and Carter makes a good case for the work he has been doing based on his vast experience. Many smart technology and services firms are broadening the role of AR into "Influencer Relations". Consulting relations is much more focused on deal-sensitive relationships, and IR on financial stuff. AR should be focused on "industry influencers who can impact user decision-making", be it bloggers, analysts, evangelists or independent authors. I have HP and IBM as the least innovative of the big IT vendors in developing AR programs, with only Oracle as being worse (they are too arrogant to respect anyone else's opinion). Not to say that HP isn't a great technology services firm with a lot of great people, but the AR strategy could benefit from the forward-thinking analyst-relationship policies we are now seeing from Accenture and SAP. But hey - that's only my personal opinion based on my experience - others may think differently. Carter - no offence is meant to you - from what I hear you're one of the best AR thought-leaders in the business.
Hi Anonymous (6/5/07), No offense taken.
Why do you think AR should be responsible for bloggers? In how they work and how they get they infomation into the public domain, are they not closer to on-line and print publication columnists and pundits, thus should be included in the PR domain.
Are you suggesting that companies should have a single "influencer relations" program that incorporates AR, BR and PR? If so, why?
Carter: if analysts are not to be bracketed as "influencers", then what do they actually do (beyond being brainwashed by vendors and writing favorable reports for their paying vendor clients)? Yes, some are smart and popular, but they do not have the proper resources to do research the way they should be in today's smarter technology industry.
It makes a lot of sense to bundle bloggers together with analysts as most today's top bloggers have originated from the analyst community, and some are also threatening to "challenge" the traditional analyst model, by offering real thought-leadership and independent insight. You have to agree that the way in which today's analyst business model has evolved over the last 10 years, it is now fundamentally flawed and can barely be descibed as providing "insightful unbiased insight". I can bet you now that most vendor execs spend more time on hard hitting blogs (for example, Vinnie Mirchandani's "Deal Architect") than reading the latest Gartner fluff. If all vendors got on board this philosophy of dealing with bloggers and analysts together, it will help challenge todays' analysts to be more thought-provoking and insightful.
Hey - it's only an idea, but something needs to be done. Would be interested to hear your opinion on this...
I think that you are mixing up "smart" with "influential". An analyst can be influential without providing the most insightful or even factually correct commentary. He or she merely has to have a large number of IT managers that subscribe to their service and use that research.
I get proof every week in the form of calls from our sales reps wanting to know how to deal with some piece of analyst commentary that is negatively impacting a sales opportunity. Or, they want to know how to leverage positive commentary (like a restaurant posting a postive review in their window).
As to using Vinnie Mirchandani and Deal Architect as an example of an influential blogger. Vinnie is a consultant who advises vendors and end users on sourcing deals. So is he influential because of his blog or does he smartly use his blog as a form of marketing and his real source of influence are the deals he impacts? A quick scan of Deal Architect does not find a lot posts that would actually help a manager make multi-million dollar purchasing decision or multi-year strategy. However, his blog could convince managers to think "Hmm, this Mirchandani fellow looks really smart, I think I will call him to get some consulting on this project I'm working on." So in this scenario, the consultant/analyst is using blogging as an inexpensive marketing tool much like some consultant/analysts use press quotes as a form of marketing.
BTW, lots of vendor execs think that many analysts -- and bloggers and reporters -- are lazy idiots. That does not stop the exec from interacting with the analysts -- or blogger or reporter -- because that is necessary to influence them.
Carter,
This is an excellent synopsis of how the system works. However, I realized that users do not buy IDC research (I believe about 97% of its revenues are from suppliers) and only a minor proportion of users buy Forrester (the fading ex-Giga population of customers) and AMR (quite strong with SAP users). So why your explanation is 100% accurate for Gartner group, you're missing the mark with the other firms.
Interesting - I knew IDC had no real influence with buyers - but I had thought that Forrester derived a substantial percentage of revenues from users.
I have certainly seen them myself in larger enterprise deals. But then again that may just be because their ECM analysts are top notch (Barry Murphy and Connie Moore)...
If anyone has some stats on percentage buyside/sell side revenues for the top analyst firms would be interesting to see..
Forrester has sustained some of the legacy Giga business after they bought the firm, but their revenues are still dominated by the vendors. However, they are certainly rivaling Gartner now for research quality - especially in the software arena - and have a model that is well-positioned to grow its client base of users (as opposed to IDC which persists in squeezing as much as it can out of the vendors). As we see the top-end of the IT research market consolidate, we will likely see more acquisition activity at the high-end in the coming months. Watch Datamonitor closely - it clearly has IDC in its sights and may make a play for AMR to boost it's IT research strength in the US. They may also pick up Yankee for chump change as it struggles to keep up with the big guys...
Post a Comment