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

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

What Forrester Research’s acquisition of Strategic Oxygen says about Forrester

logo-forrester.gifOn December 1, 2009, Forrester Research announced the acquisition of Strategic Oxygen from Monitor. Strategic Oxygen provides marketing professionals with data to help target marketing campaigns more effectively. While of interest to Technology Product Management & Marketing Professionals, it will be a separately-priced offering and not included in that RoleView. 

This acquisition is of little interest to analyst relations (AR) teams as Strategic Oxygen does not track IT or telecommunications markets nor does it advise enterprise technology buyers on products from vendors like Accenture, Cisco, IBM, or SAP.

In a case of bad luck from a publicity point-of-view, Forrester announced the acquisition on the same day that Gartner acquired AMR Research. The Gartner acquisition overshadowed the Forrester announcement, but that does not mean that Forrester’s M&A move is less significant. Rather, it provides important insights into Forrester’s strategy.

The first insight is that M&A continues to be an ongoing tool for Forrester even though it has been quiet on that front since the JupiterResearch acquisition in July 2008. Forrester is sitting on approximately a quarter-billion in cash, cash equivalents, and short term investments. It also generates very good cash flow from operations so it definitely has the resources for an aggressive M&A strategy. Forrester simply takes a conservative approach to M&A to ensure a high level of success.

The second insight is that Forrester continues to look beyond the IT organization. Forrester did not have a significant presence in the IT organization prior to closing its acquisition of Giga in early 2003. The Giga acquisition gave it a substantial footprint in the IT organization, likely making it the number two end user advisory firm after Gartner. While Forrester’s end-user clients provide a steady revenue stream, it has done its recent primary investment in expanding its Continue reading

Analyst Ecosystem News – People on the Move

Icon - newsTip o’ the hat to many tipsters who provide us with the following tips. Alas, they are all shy so they requested that their names not be used. 

Arrivals:

  • Forrester – Nigel Fenwick (Twitter, personal blog) covering CIO issues
  • Forrester – Augie “August” Ray (Twitter, personal blog) covering social computing
  • SynergyACG – Eve Griliches (Twitter) covering telecommunications equipment. Prior to SynergyACG Eve was a Director at IDC.

Departures:

Gartner and Forrester are not, repeat not, Tier 1

Analyst Relations PlanningYou read the headline correctly; Forrester and Gartner should never be considered Tier 1. Yes, yes, Gartner is the industry behemoth and Forrester is likely the number two firm for enterprise end users, but that does not make them automatically Tier 1 for the purpose of creating a ranked and tiered analyst list. 

In the analyst list methodology that SageCircle has developed, analyst firms should not be given an automatic “tier” because what should be ranked is analysts, not firms. Ranking should be done based on a set of criteria (e.g., industry visibility, research coverage, client base, and so on) related to the vendor’s and AR team’s objectives. After a ranked list is created, then AR draws lines on the list to split the list into groups (e.g., Tier 1, 2 and 3, or strategic, important, and secondary or whatever you want to call them) that will define the types the service level (e.g., 1-to-1, 1-to-many or none-to-many responses) the AR team will give each analyst on the list. Tiers and service levels are created based on AR resources (i.e., the bigger the AR team the more Tier 1 analysts can be supported). While the characteristics of the firm will contribute to the data for ranking, merely working at Forrester or Gartner should never guarantee an analyst that they will have Tier 1 status.

SageCircle strategists frequently see analyst relations (AR) teams give Tier 1 status to analysts of the Big Two, even if their true relevance should place them much farther down on the ranked list. This can lead to AR misallocating resources by putting too much emphasis on some analysts while not having sufficient resources to brief or respond to other analysts. Remember, depending on the market and the analysts, a single practitioner or boutique can have just as much influence as the Big Two.

SageCircle Technique:

Forrester 3Q 09 earnings part 2 – Client Group breakdown from 10-Q

logo-forrester.gifVendor 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.” The “Other” category makes the percentages fluxuate quarter-to-quarter depending on the number of events that occur in the quarter.

Table - Forr Client Breakdown Q3 2009

As the table illustrates, roughly 40% of its revenues in the first three quarters 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 Continue reading

SageCircle AR Podcast for November 3, 2009

SageCircle AR Podcast ArtworkThe 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.

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

SCP 12: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

[00:00] Opening

[00:57] News – Forrester’s and Gartner’s 3Q 2009 Earnings Announcements

[07:41] Growing enterprise client base enhances influence and relevance

[10:40] AR-Sales Case Study – Countering a negative research Continue reading

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