Why large advisory analyst firms don’t seem to mind losing superstar analysts

By SageCircle with special guest contributor Gerry van Zandt

Update 9/24/09 2:05 pm PT: We are receiving links to interesting related posts that we are now adding to bottom of this post.

The recent departure of Forrester analysts R “Ray” Wang (personal-branded blog, Twitter handle) and Jeremiah Owyang (personal-branded blog, Twitter handle) has prompted the usual commentary and hand-wringing around what these departures mean. Questions we’ve heard center around: a) do the departures signal the demise of traditional analyst firms; and b)  and why analyst firms cannot keep their superstars.

Answers: no; and maybe they don’t want to.

Remember that superstars have always been leaving analyst firms. In the 1980s, George Colony and Tony Friscia left Yankee to form Forrester and AMR, and Dale Kutnick left GartnerGroup to launch META Group. In the 1990s, Gideon Gartner left Gartner to create Giga, and a group of Gartner analysts left and launched Jupiter Communications (while a number of Gartner analysts did join Jupiter, they did not co-found it).  These are just examples where the superstars founded what became good-sized firms with many analysts. There are many more examples where superstars have become successful single practitioners or have intentionally kept their firms at a “boutique” size.

There was a similar burst of twittering (in the old fashioned sense of the word) when social media superstar and Groundswell co-author Charlene Li (blog, Twitter handle) and two other social media analysts left Forrester Research in the summer of 2008 (see Bursts of analyst departures in a hot research area are not unusual). So was Forrester doomed? Not at all. It still retained Groundswell co-author Josh Bernoff (blog, Twitter handle). It also had a cadre of social media analysts built organically and expanded via the JupiterResearch acquisition, and it had a very promising young analyst who already had high visibility but had not yet achieved superstar status yet – Jeremiah Owyang. Fast forward a year, and Forrester has lost another social media superstar. Oh, woe is them! Not really. The fortunes of large, successful industry analyst firms do not rise or fall based on a single superstar. Forrester still has a large and strong team of analysts covering social media from many different angles. In fact, among the traditional IT and telecommunications analyst firms, Forrester clearly has the best and most prominent social media research coverage. This is partly because it caters to enterprise marketing professionals in both its end-user and vendor client bases, not just the IT department.

So why don’t firms like Forrester or Gartner keep their superstars? In some cases they can’t because the superstar is itching to start their own

Ovum-Datamonitor Restructuring: Sufficient Critical Mass to Take on the “Big Two”?

On August 11th Datamonitor announced a major restructuring of its various analyst brands into a cleaner, more focused framework.

 First a quick recap – Early in 2005 Datamonitor acquired the Butler Group. In parallel, Ovum had started on the M&A path with the acquisition of RHK in mid-2005 followed by Summit Strategies and Orbys after its early 2006 IPO. Then Datamonitor acquired Ovum in December 2006. That was followed by Informa acquiring Datamonitor in May 2007. Informa itself was the target of a failed, hostile takeover by UBM in June 2008. Finally, Datamonitor acquired the Brown-Wilson Group in April 2009. Complex enough for you?

 Datamonitor and Ovum kept all the acquired brands pretty much untouched for the last two and a half years with research overlap, separate sales force, unfocused marketing, and so on. This created a jumble of brands that that did not seem to have any synergy or heft to compete effectively with Forrester and Gartner. In contrast, Forrester (Giga, JupiterResearch) and Gartner (META Group) both absorbed their major acquisitions of this decade relatively quickly and effectively.

 SageCircle was given a background briefing in mid-June by the Datamonitor CEO and Ovum Managing Director Mark Meek and this week by David Mitchell, Ovum’s SVP, IT Research. While still a bit of a work in progress, the reorganization shows real promise to shake up the analyst market.

 The new lineup is going to have three brands – Datamonitor, Ovum and Orbys. Each will have a much more focused client base and research portfolio. Datamonitor will focus on business information, Ovum on enterprise IT and telecommunications, and Orbys on sourcing. This will permit each of the new units to develop sufficient critical mass to be more competitive and attractive to potential clients whether enterprises or vendors. The Butler Group brand will continue for a short period in association with certain conferences much as GigaWorld continued after Forrester retired the Giga brand.

Sales & Marketing

However, it is not just bringing the analysts together and rationalizing the research ownership that makes this an interesting move. Part of the problem Datamonitor, Ovum, and the other brands have had in the last

Ray Wang leaves Forrester – normal course of business

When it became known that Forrester enterprise applications analyst extraordinaire R “Ray” Wang (blog, Twitter handle) was leaving the firm, it left some folks atwitter on Twitter and blogs (no apologies for the atrocious pun) (e.g., see Ray Wang departing Forrester). What does Ray’s departure mean? Does it portend broader changes in the analyst ecosystem? 

Well, no. This is just the normal change that happens at every firm and most every individual’s career. As we pointed out a year ago in Bursts of analyst departures in a hot research area is not unusual, there are always analysts leaving firms for a variety of reasons. The reasons that Ray gave in his blog post Thursday’s Thanks: It’s Been A Great 5 Years! are very typical: more time with family and a change in research focus that did not necessarily fit in with his job and Forrester’s business model. While Forrester does not like losing a valuable, high profile employee as Ray, it has lots of smart analysts covering the same market as Ray so there will be little short or long term impact on Forrester’s business.

Here are some quick replies to comments we have seen.

Vinnie Mirchandani, former Gartner analyst and single practitioner at Deal Architect says in Fellow rebel, Ray Wang that superstar analysts like Ray are under-compensated by the major firms. We reply – So? As Vinnie himself pointed out that has always been the case. As a consequence compensation is no big deal and the major firms have always been able to recruit smart folks, turn them into superstars, and replace them when necessary. However, a lot of very smart analysts stay at the major firms even if in theory they could make more money elsewhere.

James Governor of Redmonk (Twitter handle, blog) in a tweet says “wondering why Forrester analysts leave, while Gartner analysts do not.” Our response – Guess what? Analysts do leave Gartner, probably

Forrester 2Q 09 earnings part 2 – Client Group breakdown from 10-Q

Vendor AR teams find it useful to understand the size and nature of an analyst firm’s clients when they are trying to decide if that firm has direct influence on their sales. Analyst firms whose clients are primarily vendors have little direct impact on sales deals because they are not advising IT managers and other technology buyers. Those firms with a significant contract value with enterprises can have a dramatic impact on sales especially through ad hoc, phone-based inquiry (see Don’t discount the business value of analysts’ 350,000+ phone-based inquiries with end-user clients) and signature product or market research (e.g., Magic Quadrant and Wave).

In its SEC Form 10-Q, Forrester Research provided some details into its client base. While not perfectly transparent, it does provide interesting insights. The filing reports the revenue breakdown by the three Client Groups, which have their own dedicated sales and analyst teams. There is also an “Other” category which consists “primarily of sponsorships and event tickets.”

As the table illustrates, 40% of its revenues in the first half of 2009 came from its IT Client Group, which SageCircle interprets as “end users” at enterprises. This is a critical community for many technology and telecommunications vendors as these are often the primary buyers of technology, especially IT infrastructure (e.g., servers, storage, systems integration consulting, enterprise applications, et cetera).

The 29% for the TI Client Group, focused on vendors, represent analysts who primarily advise vendors –although they can advise end users through so-called courtesy views and inquiries – and thus do not have a direct impact on active sales deals. The “Other” segment, the events business, does not have an analyst team so it does not have a direct impact on active sales deals.

So does this mean less than half of Forrester’s clients are those prime IT buyers that vendors prize? Not necessarily.

The M&S Client Group, which is focused on

Don’t discount the business value of analysts’ 350,000+ phone-based inquiries with end-user clients

In all the buzz about 21^st century social media like Twitter and blogs there is this 19^th century warhorse that is the analyst firms’ secret weapon – the telephone.

 Yes, the lowly telephone.

A common conversation SageCircle has with vendor executives is their opinion that analyst research is commoditized because so much information is available for free on the Web and in blogs, thus analyst influence must be dropping. It quickly turns out that the executive is almost always referring to the analysts’ published research. Our point in this post is that written research has always been commoditized and thus the written word is not what sells analyst services. What clients really buy is spoken advice – personalized and delivered real time – that cannot be commoditized, digitized, and distributed around the Internet.

Many members of the vendor community do not have a visceral feel for the client value delivered by these ad hoc phone-based inquiries between analysts and end users because they have never participated in one. Often vendor executives approve spending for analyst contracts because they think it is all part of a pay-to-play payola scheme. Because of this attitude they never bother to actually use the inquiry services they buy. 

However, the typical end user client of an advisory firm does not have this negative bias about analyst firms. For the enterprise IT manager, the advisory analyst is a trusted, objective advisor. In many cases, the analyst can actually save the client many times the analyst contract cost by providing timely insights – via a short phone inquiry – about a vendor contract the IT manager is

Forrester Research Q2 2009 earnings

This analysis does not look at areas of interest to investors, but seeks to pull out insights that are relevant to clients and prospects of Forrester Research, the number two advisory analyst firm, as well as communications and IT vendor analyst relations (AR) teams. 

Forrester Research (NASDAQ: FORR) reported its Q2 2009 earnings on July 30, 2009. See the end of the blog entry for a summary and link to the press release. 

This post is part one of two parts when it comes to an analysis of the Forrester Q2 earnings. This is because the 10-Q, which comes out within two weeks of the earnings call, has more detail than the currently available 8-K and the earnings call.

Forrester’s acquisition of JupiterResearch was made in Q3 2008 which makes Q2 year-over-year comparisons not entirely relevant for our purposes. As a consequence, we will be checking sequential quarter comparisons because they will show the trends in this downturn and be more informative for AR and research clients.

Q2 revenues were down 3% year-over-year to $61.6m, about what guidance predicted. Cash and short term investments were $239.4m, up approximately $26m year-over-year and $13.6m over Q1.

As expected, consulting (called Advisory by Forrester for financial reports) and events revenues were down which is typical during a recession. Consulting was down 8%. Forrester did not give numbers, but said Events did meet the reduced expectations in terms of revenue, overall was profitable and even saw one event, Customer Experience Forum 2009, sell out.

There was a decrease of 92 total clients from Q1 to 2,493 (150 total decline since year end 2008). Forrester stated these were mostly

Manufacturing and Supply Chain veteran David Boulanger joins Frost & Sullivan – Analyst Ecosystem News

David Boulanger is focused on bringing Frost & Sullivan’s global Industry resources and T.E.A.M. approach to Industrial Automation and Process Division customers with growth-oriented challenges.

A 20-year veteran in Manufacturing and Supply Chain, Mr. Boulanger was formerly an Industry Analyst with AMR Research.

Please join us in congratulating David and wishing him great success in his new position.

 

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Are you or someone you know on the move? Please let us know and we’ll post the news in future editions of People on the Move (AR professionals) or Analyst Ecosystem News (analysts). Send us the information to info [at] sagecircle dot com.

Detail on Mr. Boulanger

Mr. David Boulanger is

SageCircle AR Podcast for July 21, 2009

The AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Click here to listen to the podcast on your computer or visit the podcast page to download the MP3 file.  Click here to subscribe to the podcast within iTunes

SCP 5: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(00:00)  Opening

(01:09)  News – TowerGroup layoffs

Tom Ryan, Analyst Strategy Group

(04:50)  Measurement – Mentions as a key metric

(06:12)  Measurement – Question from Coffee Talk on Performance Metrics – special guest Tom Ryan of Analyst Strategy Group (ASG) answers “How can we measure success when we do not have any historical data?” See below for ASG contact information.

(12:34)  Social media – The role of AR team handles for Twitter

(16:34)  Change management as a key component for initiatives like social media and AR management application deployment

(20:46)  Upcoming events

(20:58)  End credits

Analyst Strategy Group  www.go2asg.com  Contact: Rob Kolokousis, 408-737-2320, “rob [at] analyststrategy [dot] com”

Our goals for the AR Community Podcast are two-fold. The first goal is to provide an additional venue for SageCircle research that complements our existing deliverables, whether free (e.g., SageCircle blog) or client only (e.g., the Online SageContent Library, the largest and premier repository of AR best practices and downloadable tools available in the industry). The second goal is to develop real-world podcasting skills so when our clients are considering their own podcasts we have the experience (and scar tissue) to help them start podcasting without having to re-invent the wheel.

Vendors, through reprints, help keep the analysts influential

There is an inherent contradiction in vendors saying the industry analysts are not relevant in the age of social media, while at the same time spending tens of thousands if not hundreds of thousands of dollars on research reprints like the Gartner Magic Quadrant or Forrester Wave. If the analysts are no longer influential – some vendor executives actually make that declarative of a statement – then why are their companies wasting the money spent on reprints? Reprints are not chump change as Gartner in its Q1 earnings call revealed that it makes about $7 million per year in reprint rights. Plus, our Google Alerts set up for the Gartner Magic Quadrant and the Forrester Wave come in every day – without exception – with multiple new hits on vendors bragging about their positions on one or more of these iconic research graphics. 

A small irony is that the vendors promoting analyst research in press releases, blog posts, Twitter tweets, reprints on websites, and quotes in sales presentations only help to reinforce the perception among enterprise technology products and services buyers that these analysts matter. To a certain extent, vendors are spending their money in order to do brand marketing for the analysts. Pretty good deal for the analyst firms, eh? Of course, the two biggest beneficiaries of this largess are Gartner and Forrester.

SageCircle has previously

TowerGroup is rightsizing for a changed landscape

The fact that the financial services industry is changing is on the front pages of news sites and newspapers every day. Banks being closed down by regulators or acquired by other banks are shrinking the market. Other financial institutions are slamming their checkbooks shut as they try to conserve capital. This turmoil is obviously impacting technology vendors that sell software, hardware, and outsourcing to banks, insurance companies, and other financial firms. In addition to the tech vendors, this changed landscape also impacts analyst firms, especially those that focus on the financial services vertical.

A case in point is illustrated by our post TowerGroup experiences layoffs. TowerGroup specializes in the financial services vertical market so it is not surprising the market turmoil would impact it. To get the details behind the job action, SageCircle was briefed on July 14^th by Bob Egan, TowerGroup’s Global Head of Research & Chief Analyst (Twitter, bio). 

TowerGroup invested heavily in the mid-2000’s to support the rapidly growing financial services market and the tech vendors that sell into that market. This worked out well with 30% annual growth in 2006 and 2007. Even when growth tapered off in 2008 and 2009, TowerGroup was doing “ok.” However, Egan said that the anticipation of an extended recovery and a shrunken set of companies meant that TowerGroup needed to proactively rightsize its operations to reflect the changing realities of the market rather than hang onto the existing strategy too long and be forced to make more drastic cuts later.

The July layoffs were based on what research services were the most relevant to

TowerGroup experiences layoffs

SageCircle has received credible intelligence that TowerGroup has  initiated a job action resulting in analyst lay offs. We will continue to provide updates as we learn new information.

 

Update: 7/9/09 9:07 am PT -Initial post. Sent request for confirmation to TowerGroup’s press office

Update: 7/9/09 9:28 am PT – Spoke with TowerGroup’s PR agency and they are checking with Tower about the SageCircle request

Update: 7/9/09 10:01 am PT – First analyst confirmation. Added to list below.

Update: 7/9/09 11:01 am PT – Another analyst added to list

Update: 7/9/09 11:32 am PT – Two analysts added to list

Update: 7/9/09 12:12 pm PT – One analyst added to list

Update: 7/9/09 1:50 pm PT – two analysts added to list

Update: 7/13/09 9:37 am PT – one analyst added to list

Update:7/13/09 9:46 am PT – report that entire European operation closed, except one analyst

Update: 7/13/09 2:27 pm PT – response from Tower about Euro cuts 

Of course, layoffs impact real people with families and obligations. Often AR people are genuinely friendly with the analysts they work with and this sort of news can be a shock. Unfortunately for AR professionals, analyst firm layoffs also raise important issues that need to be addressed ASAP no matter how much sympathy they feel for the analysts caught in the layoffs.

Related reports and obsservations

9/13/09 2:27 pm PT – from Bob Egan, TowerGroup head of research, via Twitter: “@carterlusher We remain very strong and committed to Europe with 3 in region analysts backed by an experienced team of global analysts.”

9/13/09 9:54 am PT — How much of this reflects business issues with TowerGroup versus its owner, MasterCard? For instance, the last layoffs at IDC were mandated by across-the-board IDG cuts.

9/13/09 9:46 am PT – Credible repot that entire European operation, both analysts and sales, were laid off with exception of one analyst left in London.

TowerGroup Official Statement

None at this time. Will be added should TowerGroup decide to issue a statement.

Background

For background on why some 

Former Forrester analyst criticizes the Wave… but why did he wait?

Source: Corporate Integrity website

Michael Rasmussen (blog, bio, Twitter) is a former Forrester analyst now with his own boutique firm, Corporate Integrity. In his recent blog post The Forrester GRC ‘Ripple’ (OOOPS . . . I Mean, ‘Wave’) Michael calmly dissects the Wave methodology and makes several suggestions for improving it. It is well worth the read. 

However, this SageCircle blog post is actually in response to a Twitter direct message Carter received about Rasmussen’s post: “while part of me admires Rasmussen for offering critique, why didn’t he do so while AT Forrester? Hints at sour grapes.”

Probable Answer: It was only after he left the firm could he see the problem in the methodology

Major firms are constantly tweaking their methodologies with input from the analysts. But that is typically done around the edges with the goal of increasing the efficiency, fixing minor problems, or silencing vendor complaints. Frankly, it is the rare analyst at a major firm who takes the time to do an in-depth analysis of her firm’s research methodology to see where it is really broken. This lack of observations occurs for a variety of reasons:

• Analysts are too busy with day-to-day activities
• They drank the kool-aid that what the firm does is perfect
• “If it ain’t broken, don’t fix it” attitude toward things that appear to be working

So Rasmussen should not be criticized for not criticizing the Wave methodology when he was an employee of Forrester. Rather than think of this post as “sour grapes,” it is much more likely that he did not have an “ah, ha!” moment until he was on the outside looking in.  We all know that hindsight is 20-20.

SageCircle Technique:

• Research consumers and AR professionals should develop a deep understanding of the methodologies used by their key analysts
• Research consumers should press analysts for detail on

LinkedIn forum moderated by AMR analyst

AMR analyst and outsourcing expert extraordinaire Phil Fersht (Twitter, bio, blog) is an effective user of social media as a research and publishing tool. It turns out that Phil is also using LinkedIn as well having created the The BPO and Offshoring Best Practices Forum to build the BPO community. Here is Phil’s invitation from his Horses for Sources blog:

“Yes, there is such a thing as a free lunch… Horses For Sources’ official LinkedIn Group, the aptly-named “The BPO and Offshoring Best Practices Forum” now has 5,700 members. This is a forum for leading sourcing practitioners to share their experiences, views, opinions, best practices and lessons learned in the worlds of IT outsourcing, Business Process Outsourcing, Shared Services and Offshoring. You also get a free subscription to the Horses Digest. And it’s FREE FREE FREE. Am I the most charitable person you know?”

This is yet another example of how savvy analysts are

SageCircle AR Podcast for June 16, 2009 – Aberdeen change; Twittering analyst update; Cynics or Skeptics; Analyst as AR

The AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Click here to listen to the podcast on your computer or visit the podcast page to download the MP3 file.  Click here to subscribe to the podcast within iTunes

SCP 3: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(00:55) In this edition we start with a discussion on the impact of the change in Aberdeen leadership

(04:05) state of analysts on Twitter

(09:30) reactions to our blog post about cynical analysts

(13:05) the effectiveness of analysts moving into vendor positions

(15:50) and topics you can include in your regular staff meetings

(17:10) We wrap up by looking at upcoming SageCircle events.

(18:14) End credits

Our goals for the AR Community Podcast are two-fold. The first goal is to provide an additional venue for SageCircle research that complements our existing deliverables, whether free (e.g., SageCircle blog) or client only (e.g., the Online SageContent Library, the largest and premier repository of AR best practices and downloadable tools available in the industry). The second goal is to develop real-world podcasting skills so when our clients are considering their own podcasts we have the experience (and scar tissue) to help them start podcasting without having to re-invent the wheel.

Ovum awarded Analyst Firm of the Year by Communications Day

Ovum, the analyst and consulting firm, has been awarded the Asia-Pacific Telecom Analyst Firm of the Year by Communications Day.

Grahame Lynch, Director of CommsDay, said “The CommsDay Asia-Pacific Awards are the only awards in the region that are directly voted by Asia- Pacific telecom executives. They are, thus, a substantial peer review of excellence.” Lynch said “Ovum beat out tough competition from Gartner, the Economist Intelligence Group and Buddecomm to win the award”.

Antonio Bartolome, Ovum’s Asia-Pacific Managing Director, said, “Asia-Pacific plays a key role in Ovum’s global operations. Presence in Asia-Pacific enables us to better understand the key growth issues in one of the fastest growing technology markets – exactly where Ovum wants to be’.

“This award is a reflection of Ovum’s strong commitment to the Asian region and our local presence” said David Kennedy, Research Director at Ovum. CW Cheung, Consulting Director, received the award on behalf of the Ovum team.

The CommsDay Award winners were voted by the

Analyst opening – Canalys research analyst in Singapore

Click here for more information.

Aberdeen Group President Stephen Gold departs

SageCircle has received credible reports that Stephen Gold, President & CMO, has left Aberdeen Group. We have contacted Aberdeen Group’s public relations team for a statement and their official statement is below.

Under then CEO Jamie Bedard, who took over in 2003, Aberdeen had worked to transform what was perceived to be a “white paper for hire” firm into one focused on fact-based research. While Bedard was successful in changing how the company worked, changing the brand perception was still a work in progress. Then in September 2006 Aberdeen was acquired by Harke-Hanks, a direct marketing company. To a certain extent, the acquisition of Aberdeen by Harke-Hanks was a puzzle because it did not seem to offer much in the way of business synergy. Stephen Gold took over as President and Chief Marketing Officer late in 2006 (the CEO position was eliminated). Since the acquisition, Aberdeen has not being able to completely shake its old reputation.

Official Statement from Aberdeen re: Resignation of Stephen Gold

From Tracey Jones, Sr. Director of Marketing Communications

Aberdeen Group, a Harte-Hanks Company has announced the promotion of Andrew Boyd, currently Chief Research Officer, to President, replacing Stephen Gold who has resigned effective June 5, 2009. Stephen Gold will return to an executive position in the enterprise software space. “We greatly appreciate Stephen’s leadership and the significant contributions he has made to Aberdeen over the years and wish him continued success in the future,” said Spencer Joyner, Executive Vice-President and Corporate Officer, Harte-Hanks. “Aberdeen has never been more solidly positioned as the leading research provider in the market than it is today, thanks to Stephen Gold and his incorporation of cutting edge programs that continue to drive market awareness. Andrew Boyd’s enormous success in leading Aberdeen’s entire research organization and his passion to the continued success of Aberdeen, made him the obvious choice to assume the role of President. With Andrew’s deep industry experience, passion and knowledge of both the technology vendors, solutions providers and end user community, I am confident that he will continue on Aberdeen’s path of growth and success.”

end of official statement

While Aberdeen is a niche player in the industry and the appointment of its new leader will not have the impact of

Analysts are cynics – a dead idea

Public policy wonk and Fortune Magazine columnist Matt Miller’s new book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity got us at SageCircle thinking “Hmm, are there dead ideas holding back analyst relations?” Of course there are! This is one in an occasional series of posts that will address the dead ideas that impact AR programs and their ability to delivery strategic value to their companies. These posts are meant to be provocative and not necessarily definitive in their new ideas and suggestions.

Dead Idea: Industry analysts are irredeemably cynical

Back Story: It is common for many vendor executives to think of industry analysts as cynical. And at first glance, Gartner analyst Ray Valdes (bio, blog, Twitter) would seem to confirm this perception by characterizing his reaction to a vendor’s announcement as cynicism in his blog post The Secret Sauce Behind Google Wave. 

“…My initial reaction was colored by instinctive reflex of cynicism, and basically amounted to: Yes, it’s very cool and innovative, but what has Google done for the enterprise lately?

After a healthy debate with Gartner colleagues, spanning a range of views pro and con, I reviewed the Wave video and the documentation, and felt greater excitement than I did during the keynote (where I was one of the few sitting down during the standing ovation). I won’t use this post to make one of those forecasts, such as “Google Wave will kill X”, where X can be any number of well-known vendors or products. That kind of statement is overly glib, because we are just a few days into a scenario that will take 5 years or more to play out, with many twists and turns along the way…”

Although he uses the word SageCircle would not characterize Ray’s reaction as cynicism (def. “An attitude of scornful or jaded negativity, especially a general distrust of the integrity or professed motives of others”) but as healthy skepticism (def. “A methodology based on an assumption of doubt with the aim of acquiring approximate or relative certainty”). Why this different characterization? Clearly Ray had his doubts after the Google announcement, but after conversations with colleagues and further research he moderated his point of view to at least neutral if not slightly positive.  

This is an important lesson for analyst relations (AR) managers to convey to their “cynical” executives – and maybe even themselves. While some analysts are truly cynics and thus a problem (see There are many types of problem analysts), for the most part industry analysts want vendors to

People on the Move in Analyst Relations – Ryan Mahoney

Ryan Mahoney  (Twitter) has joined i2 Technologies, Inc. as Analyst Relations Manager.

Ryan joins i2 from AMR Research where he was a client research analyst. This will be an interesting transition for Ryan as having been an analyst at one of – if not the – leading analyst firms when it comes to supply chain coverage will provide him with useful insights. However, if Carter’s experience of going from being a Gartner Research Fellow to AR is any indicator, Ryan will find a few interesting surprises along the way.

Please join us in congratulating Ryan and wishing him great success in his new position. 

 

___________________________________

Are you or someone you know on the move? Please let us know and we’ll

Observations on changes in the analyst ecosystem

  [This commentary comes from guest contributor Gerry Van Zandt (Twitter handle), AR manager with HP Services. This guest post started as a letter that Gerry sent to his HP colleagues. We are posting an edited version with his permission]

I think it’s important to read and internalize what’s happening in the analyst ecosystem at a macro level.  Please note that this is my own take, and not the opinion nor the official position of HP.  Thus, you may or may not agree with it.

For the past 6-7 years, since blogs began to take hold and proliferate, a sea change has been occurring in the influencer (press and analyst) ecosystem.  The strict lines between press and analysts have been increasingly blurring, and a new class of influencers emerged circa 2002, and began really solidifying in late 2005.  I coined the term “blogalysts” for these influencers around this time.

Dozens of reporters and editors have left the press ranks to become industry analysts over the years — that’s not news.  However, we’re seeing more analysts who are contributing regular content to print and on-line press publications (i.e. Gordon Haff/Illuminata and Peter Glaskowsky/Envisioneering writing for C/Net).  Furthermore, laid-off press people and now analysts are leaving their traditional organizations to join on-line blog networks (and going solo) as “expert commentators” around particular topics. Some have strong reputations, others are striving mightily to build or re-build them.

RedMonk was probably the pioneer “blogalyst,” deliberately eschewing traditional paid, data-based research services and publishing commentary free, and 100% on-line.  They joined other newly formed “new-era” research firms like The 451 Group who aggressively embraced blogs and other emerging on-line tools.  Since then,

Listing of analyst firms who have laid off analysts in 2009

This is a simple index of posts covering analyst layoffs at various firms. If you hear of job actions at analyst firms, please contact SageCircle at 503-636-1500 or ”info [at] sagecircle [dot] com” with tips and insights.

1. Aberdeen Group (January 2009)
2. AMR Research (January 2009)
3. Burton Group (January 2009)
4. Current Analysis (September 2009)
5. Enterprise Management Associates (May 2009)
6. Forrester Research (February 2009)
7. Gartner (January 2009)
8. IDC (April 2009)
9. In-Stat (February 2009)
10. iSuppli (January 2009)
11. The 451 Group (February 2009)
12. TowerGroup (July 2009)
13. Yankee Group (January 2009)

SageCircle AR Podcast for June 2, 2009 – GigaOM Pro; Gartner’s AR call; NDA and social media

The AR podcast is a review of the latest news and trends in the analyst ecosystem along with tips and tricks for analyst relations professionals and analyst research consumers. SageCircle strategists Dave Eckert and Carter Lusher co-host this bi-weekly program. You can find all the SageCircle podcasts on our podcast page.

Click here to listen to the podcast on your computer or visit the podcast page to download the MP3 file.  Click here to subscribe to the podcast within iTunes

SCP 2: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(01:04) In this edition we look at the announcement of GigaOM Pro and the possible impacts it will have on the analyst ecosystem

(03:38) Next we will discuss the Gartner plan for better data collection

(06:32) We review some comments to our post asking if Forrester has a conflict of interest in providing advice about how Waves and Magic Quadrants

(9:20) We reply to a question about analysts respecting non-disclosure on social media

(11:08) Upcoming AR events

(12:22) End credits

Our goals for the AR Community Podcast are two-fold. The first goal is to provide an additional venue for SageCircle research that complements our existing deliverables, whether free (e.g., SageCircle blog) or client only (e.g., the Online SageContent Library, the largest and premier repository of AR best practices and downloadable tools available in the industry). The second goal is to develop real-world podcasting skills so when our clients are considering their own podcasts we have the experience (and scar tissue) to help them start podcasting without having to re-invent the wheel.

GigaOM launches new virtual analyst network to distribute analyst research

GigaOM (see below for background on GigaOM) announced (click here and here to read the announcements) on Thursday May 28, the launch of GigaOM Pro. This new service is a virtual analyst network that will make available analyst research reports on a subscription basis. This report is based on a briefing for SageCircle by GigaOM VP of Research Michael Wolf in advance of the launch and subsequent research.

 

The new network is focused on research publishing and will not be selling retainer advisory or consulting services. If a subscriber likes the research from a particular analyst contributor they are free to contact the analyst and arrange for additional services directly from the analyst or boutique firm. 

The GigaOM analyst network will consist of analyst boutique firms and single practitioners. There is a large pool of analysts that fit that description, many of whom started in the analyst business working for one or more of the larger firms or a management consulting firm. The number of single practitioners has gone up in 2009 as many analysts laid off by existing firms have decided to launch their own practice. At the time of launch the GigaOM Pro network will consist of ten contributors with plans to add more. The lineup in the GigaOM Analyst Network:

• Dixon, Colin – TDG (IPTV, Online video)
• Gilbert, George – TechAlpha (IT infrastructure)
• Greeson, Michael – TDG (broadband)
• Happe, Rachel – The Community Roundtable (social media and enterprise applications)
• Hawley, Steve – tvstrategies (television)
• Hendrix, Phil – Institute for Mobile Markets Research (mobile)
• Sharma, Chetan –Sharma Consulting (mobile)
• Tarczon, Andy – TDG (mobile)
• Urbanski, Juergen – TechAlpha (IT infrastructure)
• Wheelock, Clint – Pike Research (cleantech)

In terms of market coverage, GigaOM Pro will launch with four domains:

1. IT infrastructure and cloud computing
2. Mobile computing
3. Consumer technology
4. Clean technology

The goal is not to compete with the existing large analyst firms like Forrester, Gartner or IDC. Rather, GigaOM is looking to create an alternative distribution model that offers a continuing stream of research reports from a portfolio of analysts at a reasonable price, initially under $100 for an annual subscription. The play is to be a market expander by seeking out a huge potential market that the current analyst firms cannot reach with their business models. This could actually help the major firms in

Does Forrester have a conflict of interest with its AR workshop on the Wave and Magic Quadrant?

There was an interesting tweet this morning (see graphic on right) about Forrester’s new AR training offering.

Hmm, interesting question.

What do you think? Is there:

• A real conflict of interest?
• A potential for a perception of conflict of interest?
• No conflict what so ever?

We are looking to the members of the analyst ecosystem community – AR, analysts, IT managers, PR, research consumers – to weigh in on this issue. If you only have time to say “yes” or “no” that is fine, but we would like to get a little bit on why you answered the way you did.

Please spread the word about this post and let’s see if we can have another lively discussion about an important issue for the community.

Workshop description from Forrester’s website:

Raise Your Game In Waves, MQs, And Other Major Evaluations

Kevin Lucas, Senior Analyst, Forrester

Major comparative evaluations of technology or service sellers, like the Wave and the MQ, play a central part in the

The facts point to Gartner not relying on consulting revenues

There was a recent comment to a rather old (August of last year) post. Because it is about something that we hear periodically, we decided to elevate to a full post to bring the comment and our response to everybody attention.

 The comment is from the reader who called himself “Me” and referred to the post Are the vendor-centric analyst firms heading for tough times? Will end-user centric analyst firms do fine?

 “Me, on April 20th, 2009 at 5:33 pm Said:

 From what we’ve seen, vendors are more willing to spend than end-user firms. End-user firms are retrenching, eliminating anyone but Gartner, or even their entire budget while many vendors are seeing the recession as an opportunity to gain on weaker competitors, so they are looking to research firms to help with marketing plans, strategy assessments, and the like.

 End user focused firms are having to become consultants to survive, changing from retainer-based pricing to per-project pricing because end-user companies can’t get budgetary approval for research licenses.”

 This is an interesting opinion, and one many vendor personnel – especially executives – would love to come true because it implies that advisory firms are losing their influence. Frankly this is wishful thinking because the facts do not support this position. Here are data from Gartner’s financial reports. We start with 2004 because Gene Hall was appointed CEO in August 2004 and made a number of important strategic decisions that put more emphasis on syndicated research.

• 2004
  • research was $480m or 55% of total
  • consulting was $259m or 30% of total
• 2005
  • research was $523m or 54% of total
  • consulting was $301m or 31% of total
• 2006
  • research was $571m or 55% of total
  • consulting was $305m or 29% of total
• 2007
  • research was $683m or 58% of total
  • consulting was $325m or 28% of total
• 2008
  • research was $773m or 60% of total
  • consulting was $347m or 27% of total

2005 saw consulting’s percentage of total revenue grow to 31% but that was because of the META acquisition. META had a higher mix of