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This 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 limited number of participants – hiding behind anonymity – feel empowered to be rude, disruptive, and counterproductive.  Some enterprise managers will like communities focused specifically on their job responsibilities. Forrester and Gartner can easily facilitate this because they have already moved toward role-based research and self-identifications. Other enterprise managers will enjoy being part of an exclusive club. Yet another group of managers would resent that “freeloaders” who do not have contracts are getting free access to what they are spending tens of thousands of dollars, Euros, or yen to purchase.

Client-only programs are very popular at the big two advisory firm. For example, Gartner has around 3,500 members in its CIOs-only EXP service. If Gartner includes concierge service for the CIOs in the community, encourages analyst participation, and effectively promotes the community within its EXP membership, it could build a thriving CIO-centric community. This community would in turn become a valuable asset for selling EXP memberships.

What could be especially controversial for vendors is if the firms do not permit vendor staff to participate in the communities. There are examples, like EXP, where vendors are not allowed to sign up for the service simply because they are a vendor.

SageCircle Technique:

• Competitors to Forrester and Gartner will need to monitor any closed communities to determine if this is an approach that may be emulated or countered with open communities
• Enterprise clients and prospects of Forrester and Gartner should carefully weigh the benefits of joining a closed community, especially if part of a premium priced service (e.g., Gartner for IT Leaders)
• Vendor AR teams will need include more budget funding for access of at least one seat to any closed communities in order to learn about how they are being adopted by end users – assuming the firms permit vendors to join the communities.

Bottom Line: Communities can be very powerful for analyst firms, but it is still too early to know what the right approach is going to be. 2010 will be a time of experimentation with closed communities being one of the models tried.

Question: Enterprise clients of Forrester and Gartner – Would a firm-owned private network make you more likely or less likely to participate in a community?

Looking ahead to 2010 Series

• Analyst Market…
  • Gartner surprised by new competitors that steal enterprise clients
  • Acquisitions continue to remake the analyst landscape
• Social Media…
  • Forrester or Gartner launch a client-only social network
  • Increasing number of enterprise technology purchases influenced by analyst social media commentary
  • AR teams will get in trouble with executives for being surprised by analysts’ social media commentary
• Events…
  • More AR teams adopt virtual events, with mixed results
  • In 2H10, analyst firms will start launching new events but will still be behind pre-2009 numbers
• Analyst relations…
  • AR teams implementing AR-Sales partnerships document hard ROI resulting in added headcount
  • An AR function is completely disbanded to be subsumed into a new influencer group… with disastrous results

Here is wishing all our clients and readers a happy holiday season.

Our next official post will be on Monday, December 28th.

This 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 analysts.

SageCircle Technique:

• AR needs to put into place a simple social media monitoring program for its most relevant analysts – in 2010 this would be a relatively small task for most AR teams
• AR needs to incorporate analyst comments and opinions expressed on social media into regular reports to executive sponsors – this would demonstrate that AR is aware of and on top of analyst social media usage

Bottom Line: Social media monitoring is becoming a requirement for AR as both relevant analysts and internal stakeholders start adopting social media in greater numbers. Being a lagging adopter of social media could cause AR extreme politically problems in 2010.

Question: AR – Have you been surprised by a comment made by an analyst in social media? If yes, what were the ramifications?

Looking ahead to 2010 Series

• Analyst Market…
  • Gartner surprised by new competitors that steal enterprise clients
  • Acquisitions continue to remake the analyst landscape
• Social Media…
  • Forrester or Gartner launch a client-only social network
  • Increasing number of enterprise technology purchases influenced by analyst social media commentary
  • AR teams will get in trouble with executives for being surprised by analysts’ social media commentary
• Events…
  • More AR teams adopt virtual events, with mixed results
  • In 2H10, analyst firms will start launching new events but will still be behind pre-2009 numbers
• Analyst relations…
  • AR teams implementing AR-Sales partnerships document hard ROI resulting in added headcount
  • An AR function is completely disbanded to be subsumed into a new influencer group… with disastrous results

This 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 end-user advisory brand.

Boutiques combine to achieve scale or simply survive – There have been relatively few mergers between boutique analyst firms in the last decade. Mostly boutiques have been purchased by much larger firms to fill research or geographical gaps. However, 2010 might see boutiques combine in order to develop a larger scale of offerings and sales muscle – necessary to prevent from being crushed by one of the larger firms. In addition, boutiques that rely on vendors for business will still be experiencing financial difficulty due to the lingering effects of the recession.  This might be offset by smart mergers and the combining of resources and client bases. Ironically, boutiques that grow by acquisition would then become attractive to the large firms who could then roll them up. 

Bonus and Quirky Possibility: IDG acquires a public company as a way to spin off IDC – This is the least likely, but not completely improbable M&A event of the year. The technique is known as a reverse takeover or reverse merger. A private company takes over a public company so that the acquiring company does not have to go through the expense of an IPO to become publicly held. IDG is owned by billionaire founder-CEO Pat McGovern. McGovern is in his early 70’s so it is not inconceivable that he could be thinking ahead toward retirement and the need to liquidate IDG. The public company acquired as the shell company for this technique would not have to an analyst firm like Forrester or Gartner, just any public company. While amusing to imagine the effect on the analyst ecosystem of such a move, this really has a very low probability.

SageCircle Technique:

• Enterprise and vendor research contract managers need to have processes and policies in place to handle a merger or acquisition of a key research provider, mid-sized or boutique
• Vendor analyst relations teams should build into analyst ranking frameworks the flexibility to handle M&A contingencies which could impact an analyst’s relevance and influence

Bottom Line: Acquisitions will be a staple of 2010, with the analyst landscape being roiled by major deals. All members of the analyst ecosystem need to have plans in place to deal with this volatile environment.

Question: Who do you think will be acquired in 2010? Which company will be an unexpected acquirer of analyst firms?

Looking ahead to 2010 Series

• Analyst Market…
  • Gartner surprised by new competitors that steal enterprise clients
  • Acquisitions continue to remake the analyst landscape
• Social Media…
  • Forrester or Gartner launch a client-only social network
  • Increasing number of enterprise technology purchases influenced by analyst social media commentary
  • AR teams will get in trouble with executives for being surprised by analysts’ social media commentary
• Events…
  • More AR teams adopt virtual events, with mixed results
  • In 2H10, analyst firms will start launching new events but will still be behind pre-2009 numbers
• Analyst relations…
  • AR teams implementing AR-Sales partnerships document hard ROI resulting in added headcount
  • An AR function is completely disbanded to be subsumed into a new influencer group… with disastrous results

This 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 consulting body shop that sells hours rather than a retainer advisory firm like Gartner. The advisory model does significantly better at leveraging headcount, permitting a bigger investment in sales, which becomes a virtuous upward cycle. If Altimeter can effectively adopt an advisory model, continue to grow its sales force, and close all the leads generated by its principals visibility, it will lock Gartner out of many opportunities or defeat Gartner in head-to-head competition for deals that involve social media, enterprise application or emerging technology.
• Corporate Executive Board – While not known as an IT and telecommunication analyst firm, CEB demonstrated interest in the enterprise IT buyer market by acquiring TowerGroup in 2009. With a few more IT analyst firm acquisitions, as well as organic growth, CEB could develop sufficient scale and expertise to be credible as an advisor to enterprise end users. CEB could then exploit its underappreciated strengths of an established enterprise client base and professional sales force.
• Ovum-Datamonitor – Unlike Forrester, the “new” Ovum has already shown the guts to go directly after Gartner with its guerilla marketing stunt (see this post).  Using its “collaborative intelligence” approach with Datamonitor, Ovum can offer a different set of insights than Gartner which should prove to be appealing to enterprise prospects. The Ovum-Datamonitor duo, unlike most firms, has a sales force that if it can effectively sell the services of both brands, and should be able to compete with Gartner. Furthermore, Datamonitor has an enterprise client base into which it can cross-sell Ovum services. Finally, Ovum – though its Informa parent – has the financial resources to both grow organically and make acquisitions. Taking all these factors into account, Gartner faces its most serious new competition since the 1990s.

This does not mean that Gartner will lose market share or fail to grow the number of large enterprises as clients. In the coming year it will at least maintain its market share while adding hundreds if not more than a thousand large enterprise clients. Rather, this prediction says that Gartner will have true competition in the end-user market, a development that will benefit enterprises and vendors alike.

SageCircle Technique:

• Research contract managers at enterprises and vendors should seriously evaluate alternatives to Gartner, especially in selected areas of coverage
• Research contract managers at enterprises and vendors should, at a minimum, reallocate part of their Gartner research spending to other firms to foster better competition
• Vendor AR teams should create an analyst ranking framework that does not give Gartner analysts undue credit for enterprise influence
• Vendor marketing teams should explore reallocating resources away from Gartner (e.g., conference sponsorships and research reprints) to the new, more competitive analyst firms selling to enterprises
• Vendor public relations and marketing teams should deemphasize the use of quotes from Gartner analysts in press releases and marketing collateral and use competing firms instead

Bottom Line: It is a truism that markets work more efficiently and effectively when there is strong competition. The analyst market has seen diminished competition since the acquisitions of Giga and META in the mid-2000s. This has led to research clients having fewer distinct voices as sources of advice and research contract buyers spending more because there was no price competition. The new decade has the potential for more vigorous competition that will benefit enterprises and vendors alike.

Question: What other firms might grow into legitimate competition to Gartner and Forrester?

Looking ahead to 2010 Series

• Analyst Market…
  • Gartner surprised by new competitors that steal enterprise clients
  • Acquisitions continue to remake the analyst landscape
• Social Media…
  • Forrester or Gartner launch a client-only social network
  • Increasing number of enterprise technology purchases influenced by analyst social media commentary
  • AR teams will get in trouble with executives for being surprised by analysts’ social media commentary
• Events…
  • More AR teams adopt virtual events, with mixed results
  • In 2H10, analyst firms will start launching new events but will still be behind pre-2009 numbers
• Analyst relations…
  • AR teams implementing AR-Sales partnerships document hard ROI resulting in added headcount
  • An AR function is completely disbanded to be subsumed into a new influencer group… with disastrous results

Agenda:

• Trends in the Analyst Ecosystem – SageCircle
• IIAR Initiatives Update – IIAR board member Peggy O’Neill
• Cocktails and Networking – Hosted by Cisco

Event: Institute of Industry Analyst Relations 2010 Kickoff Meeting
Date: January 21, 2010
Time: 6:00 – 8:00 pm US PT
Location: Cisco HQs in the heart of Silicon Valley

RSVP to Peggy O’Neill (peggy.oneill@analystrelations.org) for address and details by January 15.

Trends in the Analyst Ecosystem: 2010 will be a Year of Accelerating Change

 by SageCircle

2009 was a brutal but not fatal year for the IT and telecommunications industry analysts. There were widespread layoffs at the firms, but no firms imploded. Mergers and acquisitions continued to be a tool for financially strong firms, but we also saw the launch of new firms to counter any consolidation. Social media adoption by analysts grew, but it was lumpy. These and other factors provided significant challenges to the analyst relations (AR) community, itself under pressure from the recession. Unfortunately, even though the analyst ecosystem is emerging from the recession, 2010 will provide no respite for AR. In fact, AR will have to deal with accelerating change.  We expect analyst-led communities mixing analysts with end users and vendors, the evolving definition of influencers, demands from executives for proof of ROI of AR, more M&A roiling the analyst market, and an ever more complex communications toolbox that analysts are mastering much faster than AR. To address these and other trends, SageCircle will present a quick-paced and hard hitting look at the future of the analyst ecosystem at the IIAR Silicon Valley meeting.

Key Issues to be addressed in this presentation include:

• What changes were wrought by 2009 and how they impacted the analyst ecosystem?
• What are the significant trends in the analyst ecosystem for 2010 and beyond?
• Who are going to be the winners and losers in the analyst market and AR community?
• How AR can achieve strategic status within vendors and not just be meeting schedulers?

 Arrivals:

Ptak, Noel & Associates – Mike Karp (email) joins Ptak, Noel covering storage and storage services.  Mike will be working out of offices in the Boston area.

Departures:

Freeform Dynamics – David Tebbutt (Twitter) covered social and environmental computing

Gartner – Jim Lundy (Twitter) covered social media has left for Saba (vendor)

Company News:

ARinsights enables users to view analyst photos on their smart phones. Using ARchitect™’s Outlook plugin, AR managers can quickly and easily create an Outlook contact that includes the analyst’s picture. This can be incredibly handy if you are meeting an analyst for the first time at an event and you need to quickly review his or her picture in order to recognize them in a room. What makes it even easier is that ARinsights staff maintains the ARchitect analyst database including adding the photos. (website)

Former employee convicted of defrauding Gartner. Benjamin Cardona received four years in prison and ordered to forfeit $222,182.13 for a scheme where he arranged for multimedia services contracts to outside vendors in exchange for kickbacks. It is important to note that Cardona was not an analyst and had no responsibilities for the creation of research.

__________

Are you or someone you know in analyst relations (AR) or at an analyst firm on the move? Do you have news about an analyst firm?  If so, please let us know and we’ll post the news in future editions of People on the Move. Send us the information to “info [at] sagecircle dot com”.

This particular AR community will be a little more — and a little less – interesting than most. More interesting because the focus is on the details of how AMR is going to be integrated into Gartner (click here for a round up of SageCircle posts on the AMR acquisition by Gartner). Less interesting if AMR is not relevant to your AR program or if you are not an enterprise research client of AMR.

This particular call should also prove to be interesting to enterprise (aka end user) clients of AMR Research. While the focus is on issues of interest for AR professionals, enterprise clients of AMR should be able to pick up important intelligence about what is happening with their favorite AMR analysts and that could impact contract renewal decisions.

Replay of the webinar “SageCircle Analysis of Gartner’s acquisition of AMR Research” is now available. To receive a link and password to watch a streaming version of the webinar please email “info [at] sagecircle [dot] com”. Please include your job title and company name. Agenda:

• Basics of the deal
• SageCircle Analysis of AMR’s and Gartner’s Motivation
• Highlights from Gartner December 3rd AR Community Call
• Commentary on Points from Gartner AR Community Call
• Recommendations for Research Clients
  • Enterprise
  • Vendors
• Recommendations for Vendor AR Teams

—- Text from Gartner’s email —-