• Recent Posts: Influencer Relations

    Fersht: some IIAR award-winners “just tick the boxes”

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    Some of the firms mentioned by the IIAR’s analyst team awards fall short of excellence. That’s the verdict of several hundred analysts who took our Analyst Attitude Survey, and of the CEO of one of the top analyst firms. Phil Fersht left the comment below on our criticism of the IIAR awards. We thought we’d reprint it together with the […]

    Do the IIAR awards simply reward large firms?

    Do the IIAR awards simply reward large firms?

    The 2016 Institute for Industry Analyst Relations’ awards seem to be rewarding firms for the scale of their analyst relations, rather than their quality. In a blog post on July 6th, the IIAR awarded IBM the status of best analyst relations teams, with Cisco, Dell and HP as runners-up. Together with Microsoft, which outsources much of its analyst relations to […]

    Unmaking fruit salad: 6 ways to help analysts segment markets

    Unmaking fruit salad: 6 ways to help analysts segment markets

     It’s a common challenge for providers: some new or fast-changing market contains very different solutions. Clients want either apples or oranges, but the analyst research reads more like fruit salad. As new solutions come into old markets, or as analysts try to squeeze hot new solutions into their less-exciting coverage areas, it’s increasingly hard for users of analyst research to make […]

    Control in Analyst Attitude Surveys

    Control in Analyst Attitude Surveys

    Because a lot of analysts take part in our Analyst Attitude Surveys, we are able to offer clients what we call a control group. In the language of research, a control group is a group of people who don’t get the treatment that we want to measure the effectiveness of. For example, most firms might be focussed on a top tier […]

    Time for a new direction in AR measurement?

    Time for a new direction in AR measurement?

    Worldwide, Analyst Relations teams are committed to fostering the best information exchange, experiences and trusted relationships with tightly-targetted global industry analysts and influencers. Sometimes the targeting is too narrow and analysts are treated inhumanly. However, the technology buying process is transforming and so must the benchmarking of analyst relationships. There’s already a long-term transformation of analyst relations. Over one-third of technology […]

Common mistakes made when using market share numbers from industry analysts

Market share numbers from the market research analysts can provide interesting insights into the direction a market is going. However, relying on the numbers alone without understanding how they are created or the assumptions that went into their research can lead to the wrong conclusions

There are a variety of common mistakes that market research consumers make. Consumers of market share numbers need to be aware of these types of mistakes and work to avoid them including:

  • Not distinguishing between the date of publication and the period covered
  • Not understanding the difference between historical “market share” numbers with winners and losers and “forecast” research that quantifies market direction
  • Using old, “out-of-date” data
  • Not “peeling the onion” to understand how the numbers were created
  • Using market share numbers out-of-context
  • Using generic numbers
  • Using market share numbers developed using a mix of audited and un-audited numbers
  • Confusing growth with market share
  • Using market share numbers from the wrong type of analyst
  • Not talking to the analysts

SageCircle Technique: The basic recommendation for research consumers is to take everything with a grain of salt. The best tool consumers can utilize for increasing the usefulness of market share numbers is to ask market researchers questions. The following is a checklist of questions to ask market researchers:

  • What is your market taxonomy with supporting definitions?
  • How did you verify the vendor-supplied numbers?
  • Do you footnote whether the numbers came from an audited or unaudited source?
  • Do you footnote differences in the definitions of numbers provided by the vendors?
  • How do you handle a situation when a vendor does not supply numbers?
  • Who collects the data, a senior analyst or a research operations staff?
  • If research operations, how was the staff trained?

Bottom Line: As with other types of analyst information, users of market share numbers should strive to be informed consumers of analyst research. The best results are obtained by the having a relationship with the market researcher and using that relationship to obtain insights into the quality of the numbers.

Consumers should be aggressive in challenging analyst positions and asking for background information on how they developed their numbers.

Question: Research consumers – Do you peel the onion with market researcher to understand the underlying models and methodologies? If not, why?

Are you getting full value from your contracts with the analyst firms?  SageCircle can help. Our strategists can:

  • Assist in creating analyst firm contract goals and objectives
  • Help you establish a realistic firm checklist
  • Determine the best ways to negotiate contact value.

SageCircle strategists understand your opportunities, challenges and priorities because we have been AR practitioners and executives as well as industry analysts and AR researchers. SageCircle emphasizes the use of phone-based inquiry through its Advisory Service, which is your lifeline when you need timely access to an AR and analyst expert to exploit an opportunity or mitigate a problem. Advisory is available through an annual “all you can eat” contract or blocks of two or five hours “by the drink.” Click here to learn more about our advisory services.

To learn more contact us at info [at] sagecircle dot com or 650-274-8309.  

2 Responses

  1. It should also be pretty obvious that the ‘measure’ is important too (units shipped, product revenue, total solution revenue, licensed seats, deployed seats, number of customers, etc), but it is surprising how often this is omitted, particularly when vendors are quoting market share numbers.

    And some of these measures take quite a bit of manipulation to arrive at the final numbers. While counting units shipped is pretty easy to get your head around (with the caveats you mention), market share data based on financial performance can be totally misleading. With some vendors bundling products into suites, some only selling big ticket solutions into very large enterprise, some focusing on the mass commodity market, and the increasing popularity of open source – often all within the same solution category – the poor old analyst has to make all kinds of adjustments and assumptions to get around what is often an apples to oranges to fruit salad comparison.

    Lots of the stuff quoted in relation to email servers and database management systems, for example, tells you absolutely nothing about what is really going on out there in terms of commitment, traction, dependency, and leverage. If you believed some of those numbers you would conclude that Lotus Domino is serious mainstream competition for Microsoft and that mySQL doesn’t matter in the database market – despite all the evidence to the contrary.

    Against this background, I agree with the recommendation to pick up the phone to the analyst. I was a big buyer of analyst research in a previous life and remember those occasions when you have three sets of numbers spread out on the table in front of you supposedly telling you the same thing, and trying to figure out why they are all so different. I have to admit that a lot of my frustration was more with forecast data, but we usually got to the bottom of things by talking it through with the research houses concerned.

    As a final thought, there was an old mariner saying that you should never take two clocks to sea – take one or three. It’s a principle we ended up applying religiously when purchasing market data:-)

  2. Hi Dale, Thanks for the comment.

    Alas, “obvious” is not always obvious so your comment is especially useful. Educating research consumers – whether enterprise IT managers, reporters or tech vendors – helps improve the business value they receive from analyst research which helps the entire ecosystem.

Comments are closed.

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