Too often analyst relations (AR) professionals and analyst services buyers, both vendors and end user clients, focus on the larger firms. While this focus is natural because the larger firms have greater market presence and a large dedicated sales force, ignoring boutique analyst firms misses the opportunity to obtain interesting insights and advice or to brief a potential market influencer. Of course, not all boutique firms are relevant, so AR and buyers need to do their due diligence to ensure that time and money is not wasted. This post is one in a series to introduce the community to an interesting boutique firm.
Redmonk is a boutique firm, founded in December 2002, which is primarily oriented towards open source or bottom up adoption of technologies like Linux, Apache, MySQL and PHP. In May 2008, RedMonk announced the launch of a new line of business, Greenmonk, and the hiring of a new analyst, Tom Raftery. Greenmonk’s research agenda covers green and sustainability issues, both the emerging green technology and how this technology is applied.
This email interview was conducted with RedMonk co-founder James Governor and Greenmonk analyst Tom Raftery.
SageCircle Question: James and Tom, thanks for speaking with SageCircle on the launch of Greenmonk. Can you give us the elevator pitch for this new analyst firm?
A: Greenmonk is not a new firm, it’s a new line of business for RedMonk, which is an existing analyst company. We see Greenmonk as an extension of our existing business. Greenmonk will bridge top down and bottom up sustainability- with a bias towards open data, shared source and social media – as they apply to community development and socioeconomic change.
Q: What is your business model? Because of the need to educate many people, will you be offering a service to write white papers on relevant green IT topics?
A: The business model is likely to primarily consist of advisory services under a subscription model, given RedMonk’s aversion to the pay-for-play white paper model. Education is clearly a good thing, but too many IT vendors abuse contracted white paper work (working with these vendors can be both boring, and unethical… not a great combo). This is not to say we will ignore the publication business, but as with redmonk we’ll aggressively protect the independence of our writing, speaking and research agenda. We’re also likely to move to a sponsorship oriented model for audio and video podcasts, as RedMonk has.
Q: Who are your target clients (e.g., enterprise IT managers, traditional IT vendors, green IT vendors, others)?
A: We’d be fools not to initially address traditional IT vendors, though on the user side, we’re already seeing new buyer types emerge, and will target them- sustainability officers, carbon footprint managers and so on. If we can help IT vendors understand what sustainability managers and purchasers are really looking for, we’ll be in good shape ethically, financially and strategically. One function gaining teeth and purchasing power is the corporate social responsibility (CSR) function, as it moves from PR/reporting to a more powerful role given the sustainability agenda.bv
Q: What is your research methodology?
A: We carry out a great deal of our research out in the open, on the web. One of the most pleasing things about greenmonk is the fact that not only are we winning new business faster than expected, but that the quality of comments on the greenmonk blog is already high. A core tenet of RedMonk is that the community is always smarter than any analyst firm, let alone any analyst, so it’s gratifying to see our peer readers (the internet) stepping up. We’re not a quantitative research firm – we partner with Freeform Dynamics for numbers, but our research is based on literally thousands of interactions with a range of stakeholders. We spend our time in web communities because that is where the insights are.
Q: How are you different from other analyst firms that have a green IT or sustainability practice?
A: For starters, rather than focusing on the 2% of global emissions driven by IT, we’re looking to the other 98%, which IT can mitigate. We take a broad view of regulation, supply chain, and energy demand management, re-understanding how businesses need to change in terms of the ongoing sustainability agenda. Clearly RedMonk is different from other firms- we were the first to publish research under a creative commons license, the first to blog as a core part of the business, and the first to aggressively use twitter as a research tool. Expect more of the same from Greenmonk- we’re innovators.
Q: Many traditional IT vendors now have green initiatives either as standalone functions or embedded in product groups, how would you like those vendors to interact with you in terms of briefings and updates?
A: We’re very happy to hear from traditional IT firms whatever their readiness for sustainability. We’re not in the business of shrieking that our customer base are hypocrites. Vendors should first send us an email, and then we can dig into the specifics, and potentially book a briefing.
Q: There is an emerging market of green IT vendors separate from traditional IT vendors, how should these vendors interact with you?
A: To be honest the green tech vendors are quite immature in their work with industry analysts. It’s a bit like IT industry analysts in 1999, where analyst relations was an afterthought at best, or a subset of PR. Clean tech firms – if you visit their website- only have tabs for investor relations and for PR. I expect this to change quite quickly, and look forward to sustainability startups working out how to work with us, as we work out how to work with them. There is just so much white space in the sustainability market.
Q: James, you are also a co-founder and principal analyst at Redmonk, how will your role at Redmonk change due to Greenmonk?
A: One of the reasons we hired Tom Raftery was that I was concerned I would spread myself too thin. We need to continue to offer a really awesome level of knowledge and experience to existing clients, and the best way to do that was to bring someone else on board. I will be contributing, and helping Tom Raftery to own the space. I will provide some insights and strategic directions, and we’ll collaborate on the core research and advisory agenda, but I will definitely continue to give Redmonk my full attention. Not undivided, but full.
SageCircle: Thank you very much for your time and the introduction to Greenmonk.
- AR teams should carefully evaluate the business value of briefing boutique analyst firms and add them to your analyst lists as appropriate
- Analyst services buyers should evaluate boutique firms, both to obtain unique insights and lower overall analyst spend by incorporating less expensive providers to the mix
Bottom Line: Boutique analyst firms can be an interesting way to expand your portfolio of analysts. While not all boutiques are influential or have great insights, it is well worth devoting some time to evaluating the smaller firms to balance out your reliance on the large firms.
Online SageContentTM Library clients can read about how to evaluate boutique firms as well as download the Decision Framework SageToolTM “Analyst Boutique Firms — Pretenders or Contenders.” SageCircle Advisory clients are encouraged to schedule an inquiry to discuss the relevance of boutiques to their business objectives and best practices for evaluating the boutique firms.
Question: Buyers and AR – What are the barriers to seeking out boutique firms for services or briefings? What is it that smaller analyst firms can do to get on your radar screen?