Misunderstanding Magic Quadrants, MarketScopes, and More

Source: Gartner analyst blog by Lydia Leong

Source: Gartner analyst blog by Lydia Leong

For years IT and telecommunications vendors have complained about the misuse of Gartner Magic Quadrants by IT buyers.  It appears that three key issues are routinely surfaced: 

1)     The criteria for placing the dots onto the graphic are not transparent and often the dots appear to be randomly placed by the whim of the analyst

2)     Magic Quadrants are not always updated in a timely manner and out-of-date MQ’s seem to stay around forever

3)     Research consumers often look only at the graphic and miss the supporting research note or do not speak directly with the analysts via client inquiry.  This is especially true when free reprints are made available to non-clients by various vendors

Example Gartner disclaimer about the Magic Quadrant

Example Gartner disclaimer about the Magic Quadrant

Part of the problem is that while Gartner has background information about the MQ on its website (click here to read, free registration required) and a perfunctory paragraph to readers in the fine print in the footnote of MQ PDFs (click on graphic on left to enlarge), it does not have a systematically approach to training its clients about how the MQ is to be used. That is one of the reasons why SageCircle wrote IT managers, it’s never, ever only about the upper right dot when it comes to Forrester Waves or Gartner Magic Quadrants. (There is longer, more detailed version of this content in our  SageNote™ “A Consumer’s Guide to using Gartner’s Magic Quadrant”.)

It was therefore refreshing to see a blog post on the Gartner Blog network by Jim Holincheck entitled Misunderstanding Magic Quadrants, MarketScopes, and More where he talks a bit about criteria transparency and the way these reports should be used.  It makes a good read for both vendor clients and IT buyer clients.  This addresses the number one concern above. Perhaps with more discussion the use of these important tools can be improved.

However, there is still a disconnect with issue number three.  Jim states “More importantly though, Continue reading

Gartner analyst restarts his use of Twitter

photo - Gartner Anthony BradleyGartnerian Anthony Bradley (bio, blog, Twitter) in his blog announced OK, OK, I Hear Ya, I’m Tweeting Again.

“I used Twitter ages ago and never really got into it (didn’t see the value). But now that Twitter has gained more participants and I’m being asked more and more for my Twitter name, I’m going to give it another shot.”

icon-social-media-blue.jpgThis is not an uncommon occurrence. Someone signs up for Twitter, plays around with it for awhile and drops it when they don’t see immediate value. Then something gets them back on Twitter and they have an “ah ha!” moment. Moral of the story is that analyst relations (AR) cannot assume that an analyst’s position on Twitter and other social media, no matter how vehemently stated, is permanent. Of course, an analyst that was a heavy user of social media could stop using it as well.

SageCircle Technique:

  • Check SageCircle’s Analyst Twitter Directory periodically for your top analysts
  • Ask your analysts who are not using Twitter if they have changed their minds. This can be done during briefings, inquiries or Continue reading

Observations on changes in the analyst ecosystem

Gerry Van Zandt  [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, Continue reading

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

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.

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.

SageCircle Podcast for May 19, 2009 – Big Two 1Q 09 earnings; Survey of the Analysts; Spoken Word Audit

SageCircle AR Podcast ArtworkIt is with great pleasure that we announce the launch of SageCircle’s newest free research deliverable, the SageCircle AR Community Podcast. 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.

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. 

Click here to listen to the podcast on your computer (corrected broken link 5/26/09 1:45 pm PT) or visit the podcast page to download the MP3 file. At this time the AR podcast is not yet available for subscription on iTunes, but we hope to have the details for this ironed out by next week.

Click here to subscribe to the podcast within iTunes

SCP 1: Table of contents. Numbers in parentheses refer to minutes:seconds when the article starts within the podcast.

(00:00)  Introduction

(00:56)  This week we start with a look at the Q1 09 earnings reports of the only two publicly held analyst firms, Gartner and Forrester. Gartner surprised us by actually growing overall revenue. Forrester did not.

(04:55)  Next we’ll discuss our new survey of the analysts on their Continue reading

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 Continue reading

Gartner, Inc. Q1 2009 Earnings

logo-gartner.gif

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.

 Gartner, Inc. (NYSE:IT) announced its Q1 2009 earnings on May 8, 2009. See the end of the blog post for a summary and link to the press release.

In general, Gartner’s results were much as expected. All statistics are year-over-year and FX neutral unless noted. Events took a big hit (down 18%) due to cancelation of conferences, enterprise travel freezes that cut ticket sales, and vendors cutting sponsorships. Consulting was down in revenues (4%) and backlog ($86.7m 1Q09 versus $116.8m). However, Consulting modestly exceeded expectations due to popularity of the Contract Optimization Service. Research revenue grew 4% and Research contract value grew 2%. It is the Research growth that kept Gartner revenues flat rather than falling like Forrester’s.

Cash was down nearly $70m from prior year mainly because Gartner paid down some long term debt. However, it still has $70m in cash and a $250m in available credit, which should give it the necessary resources to maintain its business and conduct M&A activity. On the M&A front, CEO Gene Hall maintained the position that M&A opportunities are being constantly evaluated.

Interesting factoid: Client inquiries were up 27% in 1Q09 versus 1Q08. CEO Hall attributed that increase to enterprise clients (primarily IT managers) wanting advice on today’s tactical issues. This is consistent with our research that shows that vendors do not use client inquiry as much as they should. The implication for the vendor community is that IT managers are seeking advice on how to manage costs, which could impact ongoing sales deals and future purchasing plans.

Interesting factoid: Research reprints are approximately a $7m business for Gartner. This is why Gartner will defend its copyrights as we discussed in Vendors need to respect analyst firm copyrights.

 Pricing

As always, CEO Hall mentioned that Gartner is maintaining its pricing discipline. When pressed by two financial analysts about how competitors’ pricing initiatives are affecting Gartner’s pricing, Hall did not directly address what Continue reading

Analysts keep adding social media capabilities, something AR needs to emulate

icon-social-media-blue.jpgWhile updating the various SageCircle social media directories, we were struck about how the industry analysts continue to embrace blogging and Twitter. Here are some statistics from this week:

Blog Directory – Forrester – four new personal blogs, for a total of 96 entries

Blog Directory – Gartner – 18 new blogs, for a total of 79 entries

Twitter Directory – Analyst – 42 new entries, for a total of 534

We already have 16 new analyst Twitter handles for Monday’s update even though the weekend is when we usually do the research to identify new tweeting analysts. In order to support the Analyst Social Media Traffic Analysis service, we are going to add Gartner analysts’ personal blogs to the Gartner Blog Directory. In addition there are hundreds of other analyst blogs beyond Forrester and Gartner blogs we actively track.

So, how is AR doing when it comes to adopting social media? Not so well. The Twitter Directory – AR had only 18 new entries for a total of 339. The analysts are typically joining Twitter about 50% more than AR. On the blogging side, we have identified only five AR program blogs.

Social media is clearly a missed opportunity for most AR programs. Most AR managers and professionals we talk to indicate that time – or lack of it – is a major reason why they are reluctant to start with blogging or Twitter. This is clearly a valid concern.  However, adopting social media does not Continue reading

Gartner, Inc. Q1 2009 earnings call is scheduled – will enterprises still be buying services?

logo-gartner.gif

Gartner, Inc.  (NYSE:IT) announced that its earnings conference call will be on May 8th at 10:00 a.m. ET. The earnings call is a webcast that you can find on Gartner’s investor relations webpage.

This earnings call should provide critical insight into whether enterprise technology buyers are changing their advisory analyst contract purchasing behaviors. In recent recessions, IT managers (the typical tech buyer client) have, as a group, been steady in their purchases of Gartner and Forrester services(and Giga and META before they were acquired). Most of the advisory analyst firm research contract sales volatility is due to vendors who often cut their marketing budgets steeply during recessions.  Because Gartner is not very vendor centric the earnings call information correlates closely to end user activity. 

Enterprise technology buyer purchasing patterns are important because they are an important indicator of analyst direct influence on vendor sales. If the firms have more end-user clients their influence goes up merely because they have more clients to advise as to which vendors belong on short lists, et cetera. If, on the other hand, purchases show a steady decline this could indicate a decrease in influence.

Gartner has said for 2009, research contract value will increase by 1%. While this is much smaller than Continue reading

Are you in a “contract renewal trap” when it comes to Forrester and Gartner contracts?

icon-budget-cuts-105w.jpgAs we work with clients on helping them manage their analyst spending, one major problem that keeps popping up is what we call the “contract renewal trap.” This occurs when the analyst contract manager (e.g., analyst relations, market research or IT manager) lets the analyst firm control the renewal process by starting with last year’s contract. The previous contract then becomes a de facto floor to build upon. It is a seductively easy trap to fall into because it appears to have minimal work involved and there is little likelihood of not renewing. Of course, this trap benefits the analyst firms immensely. 

The contract renewal trap is likely costing the average vendor or end-user client of the analyst firms tens of thousands if not hundreds of thousands of dollars of unnecessary spending every year.

SageCircle Technique:

  • Contract managers, whether end user or vendor, need to determine if they are in a contract renewal trap
  • Contract managers need to take a “sacred cows make the tastiest hamburger” mentality and approach renewals as if Forrester and Gartner might not get any contract
  • Contract managers need to seize control not cede control to Continue reading

NCVI are the four most important letters in the English alphabet for a Gartner sales rep

icon-budget-cuts-105w.jpgKnowledge is power when it comes to purchasing decisions about analyst firm contracts. Unfortunately, too many contract managers do not understand many of the underlying behavioral drivers when it comes to dealing with Gartner sales representatives, which puts those managers at a disadvantage. 

For instance, an important piece of information is that Gartner reps are measured on NCVI, net contract value increase. NCVI is calculated based only on the total syndicated research revenues, seats, and clusters. Other purchases such as event sponsorships, consulting or SAS are not included in the calculation.

Gartner sales reps that achieve NCVI are golden. Those reps whose client contracts are less than the prior year’s amount are in danger of termination. That is why Gartner sales reps start getting desperate when it looks like contract renewals are going to be less than the previous contract.

It is possible to reduce spending – notice we did not say “save money” – with Gartner without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to negotiate a better discount from the sales rep, which is quite difficult because of the pricing discipline mandated by Gartner’s CEO. Rather it takes intelligence about Gartner’s business and sales practices to know what Continue reading

Gartner analyst gets grumpy in Twitter for a good reason

french-caldwell-being-a-little-testy-v-3Recently Gartner Research VP French Caldwell (bio, blog, Twitter) grumbled a little bit in Twitter about poor AR practices by vendors he covers in the Magic Quadrant for Enterprise Governance, Risk and Compliance Platforms

This little tid-bit illustrates that analysts expect vendors to proactively reach out to them (for more background see SageCircle’s Hierarchy of Analyst Needs). If a vendor does not actively brief the analyst, then in the analyst’s mind the vendor gets what they deserve, whether a poor rating in research or even dropped all together from a research report. This research downgrade could have a direct impact on lead generation and sales as technology buyers (aka end users, typically IT managers for Gartner) often ignore vendors not ranked well in Magic Quadrants or other research. This is especially true when a competitor’s sales representative brings the vendor’s downgrade to the attention of a prospect.

Another point this incident illustrates is that analysts are using social media to discuss their research agenda and make their displeasure about vendor performance known. Vendors that are not monitoring analyst commentary in tweets or blog posts could be missing important data points.

SageCircle Technique:

  • AR programs need to use a mix of interactions throughout the year to maintain top-of-mind presence with the analysts and ensure they are up-to-date on the vendor’s capabilities and differentiation
  • AR programs should have an active plan for influencing all recurring signature research such as Gartner Magic Quadrants or Forrester Waves
  • AR programs need to monitor analyst commentary in social media. This will not necessarily require significant work as the volume of analyst blogs and tweets is still relatively small for any particular market

Bottom Line: While vendor executives like to complain that the analysts need to “do their jobs” by proactively reaching out to request updates, the reality is that vendors need to be the ones doing the outreach.

Question: AR programs – If you are on a Magic Quadrant or Forrester Wave, why do you not periodically brief the analyst?

Saving money on your Gartner and Forrester contracts is a year round activity

icon-budget-cuts-105w.jpgSageCircle is handling more and more client inquiries about how to reduce the cost of Forrester and Gartner contracts.  One aspect jumps out: too many purchasing managers (e.g., AR, market research, or procurement.) focus on managing costs mainly at contract renewal time. The reality is that saving money needs to be a focus each month of the contract, both to manage incremental spending but to also set the stage for the next contract renewal. 

What many vendors do not recognize sufficiently is that the Big Two account teams are scouring the vendors for additional budgets to tap with a sale of an Advisory seat here or some Service Units there. In some cases, the incremental purchases can easily add up 50% of the original contract. This can be very wasteful if the individual doing the purchasing does not how to be a good research consumer (very likely), does not use the resource after the initial couple of weeks (more likely) or buys something this already available in other parts of the company (regrettably likely). Because there is rarely a line item in the chart of accounts for analyst services, it can be very difficult to track these purchases.

Contract managers need to constantly work on monitoring actual utilization of the services in the prime contract. This includes making sure that Continue reading

IIAR publishes white paper on Managing the Gartner Magic Quadrant

Here is the announcement on the IIAR blog:  IIAR publishes white paper on Managing the Gartner MQ.  The whitepaper is titled: “Managing the Gartner Magic Quadrant: a tool for analyst relations managers.”  The paper is free for all IIAR members and can be found in the Library section of the organisation’s website www.analystrelations.org.

Saving money on contracts with the Forrester / Gartner duopoly is not simple

icon-budget-cuts-105w.jpgA common client inquiry we receive is in the context of someone negotiating with Gartner. Our clients want to know why in the midst of a terrible economic downturn, when vendors are cutting budgets left and right, that Gartner does not exhibit greater flexibility (i.e., cut prices) when it comes to contract negotiations. The short answer is that due to its end-user advisory market dominance – we estimate that Gartner has ~70% of the end user contracts – it does not have to be flexible. 

However, this issue is a little more complex than slapping a “monopolist” tag on folks over on Top Gallant Road. The reality is that there is an effective duopoly with tacit partner Forrester which gives them both the flexibility to be inflexible with it comes to negotiations. The last time this market saw pricing and packaging that in anyway favored the buyer was the mid-90’s when Giga and later META used significantly lower prices and “all you can eat” research seats to take market share from Gartner and Forrester. Alas, today there are no such firms that can play that role to counter Gartner and Forrester. As a consequence, the Big Two’s CEOs habitually inform Wall Street that they are maintaining their pricing and discounting discipline.

However, it is possible to reduce spending – notice we did not say “save money” – with the Forrester / Gartner duopoly without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to wrangle a better discount from the sales rep. Rather it takes:

  • Knowledge about the firms’ business models
  • Knowledge about the firms’ research methodology and analyst culture
  • Knowledge about the true business value of Continue reading

The Analyst Twitter Directory is one year old!

icon-social-media-blue.jpgToday is the one year anniversary of SageCircle’s Analyst Twitter Directory. The first listing had 26 analysts from 13 firms, both boutiques and large firms. Many wondered how long before this fad faded away.

Far from being a dying fad, Twitter is transitioning to a regular communications tool for analysts and AR. Today the directory stands at 453 entries with 34 analysts added on Monday’s update alone. All the analysts who were on the original list are still twittering today, even if they are now former analysts. Analysts who were caught in the recent rounds of layoffs are using Twitter as a marketing and research tool as they hang out their own shingle. Analysts at the largest walled garden firms (Forrester, Gartner and IDC) have embraced Twitter with 202 entries in the directory, increasing the value of their personal brands. However, single practitioners and boutiques are leveling the playing field by being some of the most aggressive users of Twitter to increase their visibility.

The AR Twitter Directory is growing as well, from 52 entries when it launched on July 23, 2009 to 301 entries today. While AR professionals have been more tentative than analysts when it comes to using Twitter, savvy AR pros are making excellent strategic and tactical use of this tool.

Why aren’t you on Twitter yet?

If there is a conversation going on, can you afford not Continue reading

As we head into Hype Cycle refresh time, pick up a copy of “Mastering the Hype Cycle”

Gartner typically refreshes most Hype Cycles in June and July every year. From a timing point-of-view that means the analysts are starting to think about what they want to change in the Hype Cycle in April. Then in May and June they move into their serious work on their Hype Cycles in order to get them through Editorial by the end of June. Working backward that means that AR programs need to start now to think about how they want to influence the Hype Cycle. 

A valuable resource for AR programs that want to influence the Hype Cycle is the book Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time (Harvard Business Press, $19.77 + S&H on Amazon) by Hype Cycle creator Jackie Fenn and colleague Mark Raskino. While written for the enterprise client, there are many valuable insights in the book for vendor AR professionals.  Click here for SageCircle’s review of the book.

Related posts:

SageCircle Technique:

  • Add influencing the Hype Cycle to your annual AR Strategic & Tactical Plan
  • Carefully review the list of Hype Cycles to identify relevant targets (while there are 96 Hype Cycles as of July 6, 2008, this task will likely not require a lot of time and effort)
  • Identify which of your company’s leading-edge Continue reading

Don’t ignore research associates

SageCircle came across Forrester research associate Timothy DeGennaro (Twitter handle) the other day while looking for analysts to add to the Analyst Twitter Directory

Research associates are typically recent college graduates who assist senior analysts with their projects. Occasionally research associates will get a contributor mention (“with”) for a piece of research, but they do not have a listing and biography on the analysts page. Because the perception is that research associates only do grunt work analyst relations (AR) professionals frequently overlook their potential future influence. This could be a missed opportunity because research associates do have ambitions, such as the one DeGennaro stated on his LinkedIn page:

“…I am currently a Research Associate at Forrester Research taking on such coverage areas as PMOs, Project Portfolio Management, and PPM software solutions.

I aspire to someday (soon) own this coverage area at Forrester as an analyst. …”

It is not just future influence that could be important.  The research associates could also be working on something today that impacts your company. For example, Continue reading

Big 2 social media expands – 15 new Gartner blogs, 3 new Forrester podcasts

icon-social-media-blue.jpgThere has been significant activity on the social media front over the last few weeks that you might want to examine for relevance, either as an end-user client of the analysts or a vendor AR team. 

Gartner has moved to phase 2 of its expanded use of blogging that was started last October. Last week it added 15 bloggers to (see Gartner Blog Network Directory for links). So far, five have posted, marked below with *, and we expect the rest will likely get their first posts up in the next week or so.

  • Baker, Van
  • Blechar, Michael
  • Cappuccio, David *
  • Global Posts
  • Lheureux, Benoit
  • MacDona 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

Gartner Consulting could be lurking in the background of active sales opportunities

icon-dollar-euro.jpgIn last week’s Gartner Q4 and FY08 earnings call there was a very interesting point that CEO Gene Hall made:

“… 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. …”

This statement should make IT and telecommunications vendors sit up and take notice. Gartner’s Cost Optimization Services consultants could be working on enterprise IT purchasing projects that directly impact sales opportunities – and not always positively for any particular vendor. 

Unfortunately for vendors, the information you give to a Gartner analyst does not always flow over to their consulting colleagues. Thus, the Gartner consultant could be relying on published research notes, which only tell part of the story and have none of the nuance or most current vendor information that is inside the analyst’s head. As a consequence, uninformed consultants might be leaving vendors off a vendor bid list or short changing their capabilities.

It is important that vendor sales representatives determine when Gartner Consulting is part of an IT organization’s procurement team for a project. While the end user might mention that 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

Gartner Q4 and FY08 earnings – Research Contract and revenues up, trouble in Events

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-gartner.gifGartner (NYSE:IT) announced its Q4 and full year 2008 earnings on February 5, 2009.

Update 1: 5:45 am PT – Observations based on earnings press release (see below for highlights from press release)

SageCircle was anticipating that this earnings call would be more interesting than has been the case for most of the CEO Gene Hall era. The key question is what would happen to research contract value, because this is a useful surrogate indicator of analyst influence with end users.

Gartner had a good year-over-year quarter for contract value growth, up 11% to $834.3 Million (8% growth excluding the impact of foreign exchange).

Why is net contract value increase (NCVI, the four most important letters in the alphabet to the Gartner sales team) an important indicator? If contract value goes up it likely means that Gartner is adding new end-user (usually large organization IT managers) clients. More end-user clients translate into more influence as more technology buyers now have access to Gartner advice on IT and telecommunications purchases, whether hardware, software or services.

While Gartner does not break out research contract value data between end users and vendors, SageCircle’s conversations with AR managers indicate that 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

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