Forrester layoffs in Europe – round 2 or round 1 continued?

SageCircle has received credible intelligence from AR professionals on both sides of the Atlantic that  Forrester Research  initiated a job action resulting in analyst lay offs. We will continue to provide updates as we learn new information.

  • Update – 2/18/09 6:53 am PT – Initial post. Sent request for confirmation to Forrester’s press office
  • Update – 2/19/09 7:12 am PT – Two analysts added to list

Analysis

These layoffs could simply be a continuation of the layoffs that we identified on February 9th (see Forrester experiences analyst layoffs). Because European countries have different labor laws than the US, job actions there frequently lag what happens in the US. On the other hand, these layoffs could be a start of a round two because management has determined even after a few days that the original layoffs were insufficient. While Forrester has over $240m in cash and marketable securities (see Forrester Research Q4 and FY08 earnings – 2008 revenues up, 2009 guidance down)  and can obviously weather even a severe recession, that does not mean it should not  Continue reading

AR & Recession – AR needs to help Sales deal with analysts’ cost cutting advice

icon-dollar-euro.jpgAt SageCircle we keep our eye on all aspects of the analyst ecosystem. This includes other bloggers with opinions about the analysts. In a very uninformed blog post, Irrelevance doesn’t pay, analystsanalyst said that analysts should “… start telling people how to save money and jobs, NOW.” What a nonsensical statement. Does analystsananlyst not know that helping their end-user clients save money is the bread-and-butter advice for Gartner and Forrester (and META and Giga before they were acquired)? Has analystsanalyst not looked at Gartner’s IT and the Economy theme webpage, which is about gathering all the research on cost optimization? Did analystsanalysts not follow SageCircle’s lead and listen to Gartner’s February 5th earnings call where CEO Gene Hall mentioned 

“… In consulting, fourth quarter results were stronger than expected and this was driven by robust demand for our contract optimization and benchmarking services. These unique services directly help our clients lower costs and their outperformance continued the positive trends from the second and third quarters. …”

Obviously, analystsanalyst has never been an effective end-client of Gartner or Forrester, because s/he would have received cost cutting, job saving advice over the last quarter century in good economic times or bad. Obviously, analystsanalyst has never been in a technology vendor’s AR or sales department (like SageCircle’s clients) and had to struggle with fixing a sales situation where an analyst has given a prospect totally unrealistic discount advice.

Geez.

Ok, enough venting. (The preceding rant represents the personal opinion of the commentator and does not necessarily represent the opinion of SageCircle, its clients or sponsors. Now back to our regulat AR best practices discussion.)

The above rant is quite serious in that every AR manager should be very aware that advisory analysts, especially Gartner, are constantly giving advice to vendor’s prospects on cost cutting. This “cost optimization” advice is especially impactful during Continue reading

Should vendors be investing in analyst conference sponsorships in 2009?

icon-budget-cuts-105w.jpgIt their Q4 and full year 2008 earnings calls, both Gartner (2/5/09) and Forrester (2/11/09) commented on how the recession is impacting enterprise end user attendance at their events. Example statements:

Gartner CEO Gene Hall “As discussed on our last earnings call that business has been impacted by corporate travel restrictions which have made it more difficult for our clients to attend our events.”

 Forrester COO Charles Rutstein “As you might expect, the events business has been softer than it has been historically. That’s largely tied to people’s travel budgets being down.”

 Both Forrester and Gartner projected Event revenue declines for 2009 due to both decreased attendee ticket sales and lack of vendor sponsorships.

So that brings up an important question for IT and telecommunications vendors:

            Should you be sponsoring analyst events in 2009?

If the analyst firms are expecting fewer attendees – i.e., potential prospects – why should vendors waste money sponsoring an event? Remember the fee to the analyst firm is only part of the overall event cost to you and often not even a large percentage. Significant resources (e.g., labor bandwidth and budget) are spent on preparing booth displays, staffing the event, special side events like receptions, and so on.

Some vendors may automatically sign up just because they have always sponsored a particular event.  Others may not take advantage of a potentially useful sponsorship because 2009 is a year of cut backs.  A better approach is for vendors to seriously evaluate the pros and cons of sponsorships in 2009. For example, having a higher profile at an event because your competitors declined to sponsor could more than offset the lower attendance by IT managers. In this case, the opportunity is more of a quality than quantity play. On the other hand, if the analyst firm is only keeping the event on the schedule because the cancellation fees would be so high then the vendor has to seriously consider whether there will be even a minimal number of attendees.

One important point to keep in mind is that vendors should not worry that lack of sponsorship will hurt the relationship with Continue reading

Forrester Research Q4 and FY08 earnings – 2008 revenues up, 2009 guidance down

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. 

logo-forrester.gifForrester Research (NASDAQ: FORR) reported its Q4 and full-year 2008 earnings on February 11, 2009. See the end of the blog entry for a summary and link to the press release. 

Forrester’s prepared remarks and Q&A were similar in tone and substance to the Gartner earnings call: expected growth until the fourth quarter at which point sales weakened considerably and anticipating a very weak 2009 resulting in revenue guidance below 2008.

Q4 revenues were up 7.7% year-over-year to $62.9m. For 2008, revenues were up 13.6% year-over-year to $241m.

Cash and short term investments were $220 million, down $29 million year-over-year. This is not surprising as the July 2008 acquisition of JupiterResearch used ~ $22.4m in cash. What was interesting was that the “cash” component went from $53m to $129m. This gives Forrester great liquidly for any M&A activity and stock buybacks to keep investors reasonably satisfied.

Forrester’s 2009 guidance was for revenues of $215 m to $235 m, down 11% to 2% from 2008. Gartner’s guidance was for a decline from 2008 of 6% to 10% (f/x neutral). The two areas expected to be hit hardest for both firms were Consulting and Events with syndicated research relatively flat.

One surprising piece of news is that rather than cutting the number of events like Gartner (good bye 18 conferences), Forrester is keeping the previously announced 14 events and adding two. Part of the reason cited for not canceling events was the sunk cost would be lost. Even a reduced conference might produce a break even. Another reason is the strategic need to fill gaps for role-based events.  This positions Forrester to experience strong growth once the recession has ended. In addition, Forrester believes that the more “birds of a feature” nature of events now focused on job roles will enhance attendee traffic because participants will have more targeted content and peer interactions. Reading between the lines, this could mean some events are limping along with weak attendance. Vendor sponsors could find their sponsorships underperforming because there will be fewer attendees.

While the total number of client companies was up 175 over 2007 to 2643, the number was down Continue reading

SageCircle Special Webinar: Impact of the Recession on the Analysts and AR – Time for Ruthless Action

seminar.jpgThe worldwide economic downturn is impacting analyst firms that only a few months ago thought they would see slowing of their revenues, but not much more. In the last month, eight analyst firms – including Forrester and Gartner – have announced layoffs. More are surely to come.

And it is not just the analysts who are caught up in this recession. Analyst relations (AR) programs often get caught in the downdraft of a recession experiencing budget cuts, headcount freezes or reductions, and less analyst interaction support from executives and domain experts. If AR is to avoid being the target of budget and headcount cuts is it critical to ensure that it is aligned with corporate priorities and is demonstrating positive economic contributions. While this seems obvious, too many AR programs are so caught up in reactive mode or simply doing normal day-to-day tasks that they don’t see the danger forming. As a consequence, these programs have a greater likelihood of getting cut than those AR managers and teams that proactively or preemptively move to change their focus. 

To help AR professionals and teams take a strategic approach to dealing with the rapidly changing environment, SageCircle is announcing a new public webinar focused on the recession’s impact on the analyst ecosystem and the actions AR needs to take.

Key Issues to be addressed in this webinar include:

  • How is the analyst ecosystem impacted by recessions?
  • Will the “Big 2″ advisory firms see their influence impacted by the recession?
  • What are the immediate steps that AR should take when analysts are laid off?
  • How will the recession cause AR to work differently and spend differently?

In this SageCircle Webinar, our strategists – who have experienced recessions both Continue reading

Forrester experiences analyst layoffs

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

  • Update – 2/9/09 12:15 pm PT – Initial post. Sent request for confirmation to Forrester’s press office
  • Update – 2/9/09 12:30 pm PT – Context
  • Update – 2/9/09 12:45 pm PT – Details: 111 staff laidoff, 15% of workforce Correction: This number is from the 2001 layoff.
  • Update – 2/9/09 1:10 pm PT – Added analyst to list (see below)
  • Update – 2/9/09 1:52 pm PT — Added analyst to list
  • Update – 2/9/09 1:47 pm PT — Added analyst to list
  • Update – 2/0/09 3:12 pm PT — Added analyst to list
  • Update – 2/9/09 3:45 pm PT — Added Forrester’s official statement
  • Update – 2/9/09 4:02 pm PT — Added two analysts to list
  • Update – 2/9/09 4:31 pm PT — added analyst to list
  • Update – 2/9/09 5:40 pm PT — added two analysts to list
  • Update – 2/9/09 5:55 am PT — Forrester files an SEC form 8-K with the official statement
  • Update – 2/10/10 6:43 am PT — a little perspective on the layoffs
  • Update – 2/10/09 8:40 am PT — Removed an analyst from the list

On Wednesday, February 11th at 8 am PT, Forrester is having its Q4 and FY08 earnings call (see Forrester Research, Inc. Q4 and FY08 earnings call is scheduled – Acquisitions? Layoffs? Something out the ordinary?). As we mentioned in the post it would not be unusual for Forrester to announce job actions or acquisitions close to the day of the earnings call. Something else to remember that layoffs do not mean that an acquisition is not in the works. Forrester could be trimming costs in order to absorb the costs associated with an acquisition.

Added 2/10/09 — While the layoffs feel like 100% to the individuals who were directly impacted, within the context of Forrester’s overall research team the percentage was small. In its 2008 10Q, Forrester indicated that it had 410 research related employees. So far, we have identified eight analysts and researchers or 2% of the team. While this layoffs impacts clients who value those analysts’ advice and insights and the vendors who had invested in educating those analysts, these layoffs do not signal a decrease in Forrester’s influence or viability.

SageCircle has announced a SageCircle Special Webinar: Impact of the Recession on the Analysts and AR – Time for Ruthless Action. In this 90-minute webinar we will look at the last recession in comparison to this recession, the impact of this recession on the analyst ecosystem and what steps analyst relations (AR) programs need to take to ensure that their companies continue to work effectively with the IT and telecommunications analysts.

Official Statement

Sent by Karyl Levinson, Vice President, Corporate Communications

Forrester Announces Workforce Reduction

 Cambridge, Mass., February 9, 2009 . . .

Forrester Research, Inc. (Nasdaq: FORR) today announced a reduction in force of approximately 50 jobs, or an estimated five percent of its workforce, across various functions and geographies worldwide. This positions the company to compete better in the current economic climate. The company anticipates that it will incur pre-tax expenses of approximately $2.5 to $3 million dollars in the first quarter of 2009, related principally to cash severance and related benefits costs. The company also is evaluating associated facilities-related costs.

“We are grateful for the contributions of Continue reading

If you have to say you are the market leader, you probably aren’t

Forrester analyst extraordinaire and social media poster boy Jeremiah Owyang (Twitter handle, blog) recently posted a very useful article How to Translate Vendor Talk into Plain English. Besides Jeremiah’s thoughts in the post, there is also a vigorous debate going on in the comments so read them as well.

 While written for enterprise IT managers getting pitched by vendor sales reps, this is a useful post for AR professionals as well.  Not because it necessarily covers new ground (see our posts listed below), but because it is always important to reinforce best practices.  Even the best can fall into bad habits, especially with PowerPoint.

There is one new example that Jeremiah raises that I want to encourage everybody to check carefully and that is “The Fallacy of Vendor Math.”  This concerns vendor claims like “30 of the Fortune 50 are our clients.” Yeah, so? Probably all the vendor’s competitors could make the same claim. 

One last point. If a vendor has to tell an analyst they are the market or industry leader then the vendor probably isn’t the leader. You can save your spokespeople grief by helping them eliminate Continue reading

An update on Twitter and the industry analysts – activity grows

icon-social-media-blue.jpgWith industry analysts continuing to sign up for Twitter handles – we have added 67 names in last two weeks – we thought it was time to do a quick refresher on how analysts are using Twitter.

A significant example you should read is Gartner analyst Jeffrey Mann discussing why he uses Twitter in his blog post Why I Tweet. In a very short post, Jeff covers a lot of ground in terms of the value he gets from Twitter. Here is a killer extract from that post: “I have used it to test out ideas that eventually make their way into this blog or my more formal research notes.” Hmm, that says to me that any AR team that deals with Jeffrey needs to part of that conversation.  How many other analysts are doing the same thing?  Have you done an inquiry with your key analysts?

 Listed below are some tweets that we believe illustrate well the different uses of Twitter by the analysts. Each shows the value of AR teams being on Twitter and following analysts.

 EXAMPLE: Analyst discussing customer information after I tweeted a question to his comment about the customer presentations at a vendor event. This shows a quick and easy dialog finding out what sort of information the analyst prefers

 rwang0 Hearing some very industry specific and solution focused customer presentations at the Progress Software event

rwang0 @carterlusher customers who present their problem, how the tech addressed the solution, & what was the business and tech benefits are best

EXAMPLE: Journalist asking analyst about a vendor announcement. This could signal that the journalist might have a formal interview with the analyst later. 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

Forrester Research, Inc. Q4 and FY08 earnings call is scheduled – Acquisitions? Layoffs? Something out the ordinary?

logo-forrester.gifThis earnings call should be much more interesting than recent quarters in the wake of the recent layoffs of analysts at five firms and the cancellation of Gartner’s  Spring Symposium. So far, Forrester has not announced any layoffs, but sometimes companies regardless of size or market will announce job actions during an earnings call to show Wall Street analysts that management is taking the recession seriously. In addition, Forrester could announce an acquisition like it did at the 2Q FY08 call with the purchase of JupiterResearch.

Forrester’s earnings call is on February 11th at 8:00 a.m. PT. The earnings call is a webcast that you can find on Forrester’s investor relations webpage. This call is coming one week after Gartner’s earnings call.

I don’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What I listen for are clues to how the two publicly traded analyst firms are Continue reading

So, how much money did the US Federal Government spend with analysts firms?

Well, it was a pretty fair amount.   And the lion’s share went to Gartner of course. Gartner got at least $121,000,000 in the last four years. See below for a table of spending by firm.

logo-usa-spending-gov The information came from www.USAspending.gov, which is an interesting resource for market research.  BTW, the numbers below should be considered the minimum amount the firms received in US Federal contracts because not all agencies are required to provide data. In addition, there are a few major agencies that have not submitted their 2008 numbers yet so the contract numbers could go up for all the firms in 2008. Also, there might be purchases (e.g., tickets to analyst conferences bought with credit cards and expensed) that are not associated with the firm’s DUN number. Besides the summary numbers we list below, you can also drill down to determine spending by agency and some contract details.

This is not just a fun exercise in trivia. The amount of contracts a firm has with a client can be used as an indicator for the amount of influence with that client. Using the 2007 contract amount and assuming the GAO drives a hard bargain so each Advisory seat costs $11k, Gartner could have approximately 2,700 IT manager clients inside the Federal government it is advising on technology purchasing issues. As a consequence, Gartner could be influencing tens of billions in IT spending because it has the ear of thousands of decision makers.

SageCircle Technique

  • AR professionals at companies that target the US Federal Government should incorporate this data into analyst list management
  • AR can conduct inquiries with analysts to ask about the volume and nature of inquiries they conduct with relevant Federal agencies
  • AR should communicate insights about relevant analyst Federal contracts to their sales colleagues and how to utilize these insights

Bottom Line: AR managers whose companies sell to the US Federal Government should use data from www.USAspending.gov as a data point for their analyst list ranking methodologies. Of course, analyst firms can influence the US Federal spending in ways not related to client status. However, contract status is an easily acquired, hard number that can provide valuable insights.

Gartner

  • 2008 – $23,558,453
  • 2007 – $30,680,378
  • 2006 – $34,544,716
  • 2005 – $32,267,738

Forrester Continue reading

Forrester named “Globe 100 Top Places To Work ’08″

logo-forrester.gifCongratulations to CEO George Colony, COO Charles Rutstein and everbody who made this honor possible. From the press release The Boston Globe Names Forrester Research To The Globe 100 Top Places To Work ’08

CAMBRIDGE, Mass., Nov 10, 2008 (BUSINESS WIRE) — Forrester Research, Inc. (Nasdaq: FORR) is one of the Top Places to Work in Massachusetts according to the results in the newly announced employee-based survey in The Boston Globe. Globe 100 Top Places to Work magazine was published in the Boston Sunday Globe on November 9, 2008. Online, the report can be found at boston.com/topworkplaces.

Globe 100 Top Places to Work recognizes the most progressive companies in the state based on employee opinions Continue reading

Forrester and Gartner – still hiring sales reps and adding clients but exhibiting differences on price increases

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 the “Big Two” advisory analyst firms as well as communications and IT vendor analyst relations (AR) teams. 

logo-forrester.gifBoth publicly held analyst firms have reported their Q3 2008 earnings, Forrester (NASDAQ: FORR) on October 29th and Gartner (NYSE:IT) on October 30th. In general (see table), both firms did quite well in Q3, continuing the trend of the past several years of strong revenue and research contract value growth. The one problem area for Gartner is events, which is a logo-gartner.giflarger piece of its revenue mix than Forrester, which saw weakness due to vendors cutting back on conference sponsorship and enterprise IT managers cutting back on attendance due to travel cuts. Forrester got a boost in several areas by its acquisition of JupiterResearch.

.

  Forrester Gartner
Revenues* 15% 9%
     
Contract Value* 15% 12%
     
Cash Flow            $40m       $56m
     
Clients
   Qtr to Qtr   174 (130**) 115
   Year to date 250 478
     
Sales Reps
   Qtr to Qtr       46 (19**) 37
   Year to date 55 68
   Total 363 875

.

* = Excludes effect of foreign exchange rates

** = Jupiter contribution to whole

Sales Force – Forrester grew its sales force in Q3 by 46 reps, of which 19 came from the JupiterResearch acquisition. Forrester’s turnover in the sales force is still considered too high, a continuing problem. Starting in January 2009, Forrester’s sales force will Continue reading

Earnings calls are scheduled – Forrester on October 29th and Gartner on October 30th

logo-forrester.gifForrester is on October 29th at 11 am ET. Gartner is on October 30th at 10 am ET. Both earnings calls are webcasts that you can find on each firm’s investor relations webpage.

logo-gartner.gifI don’t listen to the Gartner and Forrester earnings calls with the same mindset as a financial analyst. What I listen for are clues to how the two publicly traded analyst firms are Continue reading

Never assume during an annual renewal that the analyst service contract remains the same

Annual syndicated research subscriptions are a common approach for enterprises and vendors when it comes to gaining access to published research and advisory. However, for all the value and convenience in this type of contract, there is a potential “gotcha” to watch for during the contract renewal – changes in the terms and conditions.

Often contract renewals follow a simple path of adjusting the number of seats and add-on services based on past year’s usage, new requirements, and new offerings by the firm. Often the analyst firm sales representative will send along the new contract with a note that says “it is basically the same as last year, so please look at pages x and y to make sure we have captured the number of seats and services you need.  Then sign on page z.” If the client does not carefully go through the contract with a fine-tooth comb they might miss that the “basically the same” contract actually has some key changes to the terms and conditions that severely limit their use of the analyst services or gives the analyst firms the right to audit the client for contract compliance. 

In some cases, the firm sales rep does not know that the changes are there, they are simply using the new standard contract. In other cases, the sales rep is aware of the changes but does not Continue reading

Kudos for the Oracle AR about analyst support at OpenWorld

Nice gesture by Forrester’s Merv Adrian (bio, Twitter handle, no blog) to give a shout out to the Oracle AR team.

There is also a serious message here for all AR teams planning an analyst event — don’t try and cut off the analysts from the Internet. While you might want them to Continue reading

ThinkBalm – focused on the Immersive Internet

Too often analyst relations (AR) professionals and analyst services buyers, both vendors and end user clients, focus on the larger firms. While this focus is natural because the larger firms have greater market presence and a large dedicated sales force, ignoring boutique analyst firms misses the opportunity to obtain interesting insights and advice or to brief a potential market influencer. Of course, not all boutique firms are relevant, so AR and buyers need to do their due diligence to ensure that time and money is not wasted. This post is one in a series to introduce the community to an interesting boutique firm.

                        __________________________

ThinkBalm was launched in June 2008 by former Forrester industry analyst Erica Driver and entrepreneur and inventor Sam Driver. ThinkBalm offers independent Immersive Internet industry analysis and strategic advisory services to technology marketers and Immersive Internet advocates, implementers, and explorers in enterprises. ThinkBalm also operates the ThinkBalm Innovation Community, a serious game-based online community dedicated to advancing enterprise use of the Immersive Internet.

This email interview was conducted with ThinkBalm co-founders Erica Driver and Sam Driver.

Q: Erica and Sam, thanks for speaking with SageCircle about ThinkBalm. Can you give us the elevator pitch for this new analyst firm?

A: ThinkBalm offers independent IT industry analysis and strategic advisory services to technology marketers and Immersive Internet advocates, implementers, and explorers. We focus exclusively on enterprise use of the Immersive Internet, which includes:

  • Virtual worlds and campuses
  • Immersive simulations
  • 3D business applications
  • Serious or industrial games

ThinkBalm also operates the ThinkBalm Innovation Community, a collaborative online community with a serious game at its core. The community is dedicated to propelling enterprise use the Immersive Internet forward.

Q: OK, what is the Immersive Internet and why do we need another buzz phrase?

A: The Immersive Internet is the term we use to describe a rapidly evolving Continue reading

Announcing “Introduction to Blogging for AR,” a special SageCircle webinar

While there are hundreds of analysts that blog, the big dog in the analyst market has been a Chihuahua not a mastiff in the blogosphere, even discouraging its analysts from having personal blogs. However, that is changing in a big way as news has gotten out that Gartner has upped the ante on analyst blogging by encouraging analysts to start blogging with 47 blogs already on the new Gartner Blog Network (see below for list with links) with more being launched. What is even more interesting is that Gartner is encouraging its analysts participate in the online conversation by leaving comments on blogs – we found this out after a Gartner analyst left a comment on the SageCircle blog. This new emphasis on blogging by Gartner brings up a number of key issues for AR: 

  1. Are you prepared to monitor analyst blogs?
  2. Are you prepared to engage the analysts via their blogs?
  3. Are you prepared to use an AR blog to engage the analysts?
  4. Are you prepared for the analysts to “go around” you and Continue reading

Gartner ups the ante on analyst blogging – maybe 50 new bloggers

icon-social-media-blue.jpg

Update 9/15/08 10:30 am PT: Gartner launched the Gartner Blog Network today with 47 analyst blogs (though not all have posted their first post yet). You can find a link and a list of blogs in this post Announcing “Introduction to Blogging for AR,” a special SageCircle webinar

Update 9/12/08 1:43 pm PT: Gartner analyst Andrew Frank (via Twitter) gives us some detail about the launch of the new Gartner blog network: “stay tuned for details from next week’s Web Innovation conference in LA

It took a Forrester analyst (Jeremiah Owyang naturally, first in a tweet and later in a blog post) to give the analyst ecosystem the heads up about an interesting change in policy at Gartner.

Gartner’s Gene Phifer in a blog post about virtualization dropped this intriguing piece of information:

“…Now that Gartner has adopted a Web participation policy for its analyst community, I am allowed to join the blogosphere.  It’s about time! …” 

Later in a response to comments, Gene added in a comment:

“Thanks to all for the welcome aboard. Several of us have been chomping at the bit to get out into the blogosphere. Stay tuned–the last I heard about 50 Gartner analysts will be joining me.

We are still working out some logistical details, so don’t be surprised if we have some sputters at first. For example, I hear that I may be moving my blog to another site. But the good news is that we are now blogging, and you will soon see a large number of Gartner analysts with their own blogs.”

50 more blogging Gartner analysts! This is both great news and scary news for analyst relations (AR) professionals. This is potentially great news because Continue reading

Why is it that more analyst blogging is better?

This morning I got an interesting tweet from Forrester analyst John Rymer (bio, Twitter handle): 

            “@carterlusher why is more analysts blogging better?”

icon-social-media-blue.jpgJohn was responding to my reply to a comment (“Good news, Gartner is allowing analysts to blog @carterlusher will be thrilled”) by Forrester analyst Jeremiah Owyang (bio, blog, Twitter handle).  This comment pointed out Gartner analyst Gene Phifer’s (bio, blog, Twitter handle) post about how Gartner analysts are now permitted to have a personal-branded blog. I don’t know if I was thrilled, but I did say “Excellent, the more analysts blogging the better.” Thus, John’s question.

Hmm, that is a good question. My initial thought was “well of course it’s better because blogging is good.” It took me about two seconds to discard that answer as glib and dumb. The real answer is Continue reading

Is Yankee Group being prepared for another sale?

Last week’s severe cutbacks at Yankee Group (see here and here) could be an indicator that the firm is simply refocusing on its prime research opportunity or it could mean it is back on the selling block. This would be the fourth change in ownership in this decade if this turns out to be true. Here is a quick timeline:

  •  1970 – founded by Howard Anderson
  • 1996 August – acquirer Primark ($34m)
  • 2000 May – acquirer Reuters Enterprise ($72.5m)
  • 2004 May – acquirer Decision Matrix Group, formed by Monitor Clipper Partners (undisclosed)
  • 2005 November – acquirer Alta Communications (undisclosed)
  • 2008 September – ?

 A sale by Alta would not be surprising as it – like Monitor Clipper Partners – is a private equity firm that buys and sells companies as Continue reading

Are the vendor-centric analyst firms heading for tough times? Will end-user centric analyst firms do fine?

Forrester and Gartner both posted double digit gains in Q2FY08 while IDC and Yankee Group are laying off analysts. What’s up? 

One explanation might be the difference in client base composition of the two types of analyst firms. Forrester and especially Gartner get most of their revenues from end user clients and much less from vendors. For example, we estimate that over 70% of Gartner’s revenues come from IT managers in corporations. Contrast that with IDC where we estimate that it gets over 85% of its revenue from technology vendors. This difference is very relevant because enterprise end users don’t dramatically decrease their spending on analyst contracts during an economic downturn, they are pretty steady. Often they are using analyst information to validate and justify IT expenses.  Vendors, on the other hand, dramatically change their spending on analyst contracts during economic downturns. This is because most analyst services are paid by marketing budgets, which are usually the first to be cut as an economic recession approaches.

This was the pattern during the last major tech economic downturn, 2000-2003, during the post-Y2K period and concurrent ecommerce Dot Bomb. While Gartner’s vendor business cratered during this period, its end-user business was reasonably Continue reading

Executive sponsorship is critical success factor for a “Defending the Magic Quadrant” program

While we recommend that vendors don’t obsess over Gartner’s Magic Quadrant (MQ), it is also important that they realize that investing effort consistently between MQ refreshes will ensure that no nasty surprises pop up.

After we wrote in the SageCircle newsletter that vendors need to watch out for MQ complacency, especially if they are in the Leaders quadrant, Carter Cromley sent us the following email:

“We at SAVVIS are by no means complacent about our position.  In fact we’re incredibly paranoid to the point of having an organized “Defending the Magic Quadrant” program (that included executive sponsorship) that seemed to be effective in us maintaining our leadership positioning the web hosting MQ (just published).”

One of the key points that Carter makes is having Continue reading

Bursts of analyst departures in a hot research area is not unusual

The clump of departures of social media analysts – Brian Haven, Peter Kim and Charlene Li (from Forrester), and Rachel Happe (from IDC) – is not at all unusual and follows typical patterns.

There are several reasons why analysts leave a firm: just want a change or new professional challenge, recruited by another company, desire to start own firm, the current employer has grown too large and its culture has changed and a few others. In this current sitaution, there are two primary reasons why the analysts are leaving: lured by startups and hanging out their own shingle.

From late 1997 to early 2000 a number of analysts covering ecommerce/ebusiness got lured away from the firms by Dot Com startups. For example, in one week Gartner lost four of five analysts covering ecommerce. Yes, they were lured away by various startups dangling stock options, but these analysts were also annoyed at the money Gartner was investing in Jupiter Communications (ancestor of JupiterResearch) rather than beefing up Gartner’s own ecommerce/ebusiness research team.

Another common reason for analysts in a hot research area to leave a firm is to Continue reading

Forrester loses third social media analyst – When do departures start to impact analysis and client service?

So, this is almost not news anymore – Forrester loses another social media analyst. In this case, Brian Haven (blog, Twitter handle) is leaving to join Peter Kim (see here for his departure news) at a startup. The other recent departure from Forrester’s social media research was Groundswell co-author Charlene Li (see here). The math so far is three analysts from one research team leave in less than six weeks. 

Think about the bigger picture. Changes in Forrester’s social media research team have been quite “interesting” lately with new hires, significant departures, the Groundswell book publication and the acquisition and integration of JupiterResearch.

Forrester can rightly claim that it has sufficient social media research head count on staff because of the JupiterResearch acquisition and new hires. However, the constant churn Continue reading

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