Forrester or Gartner launch a client-only social network – Looking ahead to 2010

Ticon-crystal-ball.jpghis post is one in a series where SageCircle pulls out the crystal ball and looks ahead to what happens in the analyst ecosystem in 2010. See below for links to all posts in this series.

As 2009 comes to a close there are only a few examples of analyst-created communities built on social networks. One example is the IDC Insights Community, which was launched in March 2009 and is built on a white-label social network platform. This is an open community that anybody, including competitors to IDC, can register to join. This is an interesting experiment by IDC as it potentially enhances IDC’s ability to increase its visibility with enterprise clients.

While 2010 will see more analyst-operated open communities built on free tools like LinkedIn Groups or purchased social networking platforms, the most interesting and controversial communities will be the “gated communities” that Forrester and/or Gartner might launch. These closed communities would only be available to clients of the firms.

Social media purists will no doubt howl that a closed social network violates the spirit of communities and that the firms are dumb for not using the communities a marketing tool to build awareness to non-clients. Perhaps these objections are valid, but there are valid reasons why closed, managed communities will actually be welcomed by enterprise end users.  Not everybody is comfortable with the rough-and-tumble attitude of some open communities. In some cases a Continue reading

AR teams will get in trouble with executives for being surprised by analysts’ social media commentary – Looking ahead to 2010

icon-crystal-ball.jpgThis post is one in a series where SageCircle pulls out the crystal ball and looks ahead to what happens in the analyst ecosystem in 2010. See below for links to all posts in this series.

The vast majority of analyst relations (AR) teams are not regularly monitoring their most relevant analysts’ social media usage. However, this lack of attention could prove to be politically dangerous in 2010.

Many AR professionals have been confronted by executives at their companies with negative press quotes by the analysts. Often the executives demand to know why the analyst made the negative comment and what AR is going to do about it. Up through the early Internet age, while troublesome because it caused a fire drill, it was reasonable for AR not to be aware of a particular quote because a comprehensive press clipping service would have been too expensive. However, as the Internet and search tools matured, it has because harder for AR to justify ignorance about press quotes. This provides the added danger of damaging AR’s credibility for not being on top of the situation.

As more analysts adopt social media, sometimes chaotically, AR now has to anticipate being confronted by an executive wanting to know about some analyst’s negative blog post, tweet, or comment made in a social network. Just as with press quotes today, AR cannot feign ignorance about the negative comments made in social media. This is because it is perceived to be free and “easy” to monitor social media. Thus, an AR team that is not aware of an analyst social media comment brought to its attention by an executive will be in grave danger of having its credibility questioned. This could give rise to a new group tasked with social media influencer relations that would take over working with key Continue reading

Acquisitions continue to remake the analyst landscape – Looking ahead to 2010

icon-crystal-ball.jpgThis post is one in a series where SageCircle pulls out the crystal ball and looks ahead to what happens in the analyst ecosystem in 2010. See below for links to all posts in this series.

It does not take a magical crystal ball to predict that there will be acquisitions in the analyst market. Acquisitions have always been a business tool of analyst firms. However, there are some potentially interesting developments on the acquisition front for 2010 and beyond.

Roll ups to take on Gartner and Forrester – One of the ways that Gartner was able to achieve its market dominance was 60+ acquisitions in the 1990s under the leadership of then CEO Manny Fernandez.  Since then there has been only one serious attempt to use a roll up strategy to develop a competitor to Gartner and Forrester. That was by Monitor Clipper Partners in 2004, who attempted to buy META Group to combine with the earlier acquisition of Yankee Group to form the core of a new broad-based major analyst firm. This plan was derailed by Gartner CEO Gene Hall’s smart and strategic grab of META. In stark contrast to the last ten years, 2010 could see three firms use a roll up strategy: Corporate Executive Board, IDC (for Insights units) and Ovum-Datamonitor.

Mid-sized firms get gobbled up – As Gartner’s acquisition of AMR Research demonstrates, being a mid-sized firm with a price tag in the tens of millions dollars does not deter determined acquirers. There are a number of potential acquiring firms with the financial resources to buy a mid-sized firm. One firm likely being wooed by potential acquirers is the Burton Group, which has a solid reputation, desirable research coverage, a sales force, and a client base that includes enterprises and government agencies.

Forrester continues adding resources for marketing professionals – Forrester continued its push deeper into research and services relevant to marketing professionals with its recent acquisition of Strategic Oxygen. In 2010, Forrester is likely to continue adding assets for its Marketing and Strategy Professionals Client Group. While this strategy is certainly reasonable because it helps Forrester stay out of the path of Gartner, it risks diluting its Continue reading

Gartner surprised by new competitors that steal enterprise clients – Looking ahead to 2010

icon-crystal-ball.jpgThis post is one in a series where SageCircle pulls out the crystal ball and looks ahead to what happens in the analyst ecosystem in 2010. See below for links to all posts in this series.

 Gartner is the dominant player in the analyst market with more than a 40% market share according to information market research firm Outsell, Inc. When it comes to the enterprise technology product and services buyer market (typically IT managers), Gartner extends this dominance to approximately 70% to 75% according to SageCircle estimates. If Gartner continues to execute as it has the last four years it will see its market share grow, even as the total market grows as well.

Gartner has achieved this dominance through both hard work and dumb luck. Hard work as represented by making more than 70 acquisitions since 1994, doubling the sales force since 2004 to nearly 1,000 representatives, and creating mindshare with recurring research deliverables like the Magic Quadrant, Hype Cycle, and Gartner Symposium. The dumb luck comes in the form of competitors that focus on vendors rather than end users, fail to build sales and marketing functions, and/or are complacent to the point of being Gartner’s implicit junior partner even though they have the resources to invest in more effective competition.

While there are no signs that Gartner is going to get lazy or stupid next year, 2010 might see its luck run out when it comes to ineffectual or complacent competition. SageCircle sees firms that bring attitude, business attributes, and wiliness to invest to the game unlike others in the past decade. Some examples include:

  • Altimeter Group – While still tiny, with only four analyst/consultants, Altimeter Group has tremendous enterprise visibility and mindshare due to its principals’ exquisite exploitation of social media, conventional speaking opportunities, press quotes, and client contacts from their Forrester tenures. This market awareness should prove to be a significant lead generator that other more established analyst boutiques can only envy. It has made an important investment by starting to build a sales organization. Its current Achilles’ heel is that it is perceived as mostly a Continue reading

AR belongs in Marketing – a dead idea

Analyst Relations PlanningPublic 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: AR belongs in Marketing

Back Story: In the time before there was a dedicated AR position, industry analysts calling vendors asking for a briefing were often bounced around from one department to another. More often than not, the analyst would end up on the public relations doorstep because what the analyst did sort of sounded like a reporter. Because PR usually reported to Marketing, AR became a de facto marketing function even if it became an independent department.

Problem: Putting AR in Marketing has multiple problems, but a big one is consistency. One of AR’s critical success factors is consistently interacting with analysts because influencing the analysts is a process that takes a long time. AR cannot turn on and turn off interactions and be successful. Unfortunately, Marketing programs in most vendors are the model of inconsistency with resources being changed frequently.  If resources and programs are cut during recessions and restored during good times the damage for AR has been done in terms of:

  • Institutional memory is lost as AR staff gets cut or moves to other companies 
  • Relationships with analysts go stale due to lack of interactions or the inability to work with the same people
  • Sales and revenues are impacted by analysts with outdated or incomplete information providing inappropriate advice to customers and prospects
  • Intelligence dries up about analyst opinions and intentions because analyst contracts get cut reducing inquiry access to analysts

New Idea: Move AR out of Marketing and into Strategy. While there are several different options for a new home for AR (e.g., sales, product management and investor relations) each have their own issues. Strategy on the other hand has a number of advantages Continue reading

A warm compliment for Merv Adrian and an interesting comment about the Forrester layoffs

Background:  This text originally came in as a comment to Forrester experiences analyst layoffs. Because of the last line, I did not approve the comment leaving it as a private communication to SageCircle. But I did tweet that someone had sent along a very nice compliment for Merv Adrian. That triggered this comment to the original (and not published) comment:  “Saw your tweet. Oops. sorry. meant keep IP confidential. pls reveal details. =)”  So with that permission from the author, we are now publishing his or her comment. However, rather than a comment I decided to elevate it to a full post. BTW, you can follow Merv Adrian on Twitter at www.twitter.com/merv.

photo-merv-adrian-official-forresterIt is truly sad to say good-bye to co-workers especially during a lay off.. I will miss each person who has left. But it is quite a travesty when you lay off someone who is an icon, someone who makes a big difference in everyone’s lives, and someone who has had the company’s best interest at heart at all times. I have struggled to tell this story about my team and the more I wait, the more I regret it. I must tell. I shall share. I now reveal.So I say this with great conviction: “It is unconscionable for Forrester to lay off Mervyn T. Adrian without a proper explanation to our clients and our employees”

Why?

I was there when we first bought Giga. It was a scary time like now. The Internet bubble had burst. We had finished 2 rounds of layoffs. Our business was tanking. Our stock in the toilet.

When we bought Giga, we were nervous. Our first reaction was who are all these gray hairs? We were all much younger. Why’s everyone a VP? We only had principal analysts as the highest title and there were only 2 or 3 of those. Would we get along with these old farts? They seem crotchety and nerdy. How come they all work from home? We lived in a must show up to HQ culture.

But throughout the acquisition, this bubbly gentleman would reach out. He showed us how to work together. He showed us the value of an inquiry to clients. He showed us the how to collaborate across teams. He would reach out and mentor new analysts. He would tell it to us like Continue reading

Acquisitions of analyst firms are likely, so who would be buyers and targets?

question-mark-graphic.jpgQuestion: A common question SageCircle has been receiving concerns the likelihood that there will be acquisitions of analyst firms during the current recession.

During a recession, companies with strong balance sheets often acquire companies with weaker financials because the purchase price has been cut. Both Gartner (cash at September 30th was $145.2 million) and Forrester (NASDAQ: FORR, cash and marketable securities at September 30th were $254 million) have a history of acquisitions.  They also have dedicated M&A teams and CEOs that assure Wall Street during quarterly earnings calls that acquisitions remain a potential tactic “at the right price.” As a consequence, there is always the possibility that one or more small or mid-sized firms will be acquired by one of the two major public firms. 

Who could be acquired? Almost any firm. Obviously mid-sized firms like AMR Research that have gone through recent job actions could be thought to be shoring up their finances to ride out the recession… or make themselves a more attractive acquisition target by reducing cost structure or eliminating duplicate reearch coverage.

Who could be buyers? While Forrester and Gartner have the requisite strong balance sheets and motivations, they are not the only potential buyers of analyst firms. Companies that have made analyst firm acquisitions over Continue reading

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