• Recent Posts: Influencer Relations

    IDC overtakes HfS in 2017 global Analyst Firm Awards

    IDC overtakes HfS in 2017 global Analyst Firm Awards

    Gartner and Forrester’s leadership is no surprise, but this year IDC has won back third place in our annual Analyst Firm Awards, pushing HfS Research into a still-impressive fourth place. PAC and Ovum have also risen substantially this year, rounding out the top six. In last year’s awards, we saw that firms that could create business leads for their clients […]

    Analyst Value Survey shows deeper frustration with industry analysts

    Analyst Value Survey shows deeper frustration with industry analysts

    I’ve been in New York this week discussing the Analyst Value Survey with both Kea clients and industry analysts. The 2017 report will be available early in January, but the responses show that many users of analysts’ services are reaching out to more firms than before, and are gathering quite uneven value. Firstly, the good news is that many users […]

    Webinar: Survey shows new risks for analyst relations

    Webinar: Survey shows new risks for analyst relations

    A first glance at the Analyst Value Survey shows new risks emerging for analyst relations professionals. We’re hosting a webinar on November 30 to hear how leading AR professionals are responding to them, and what the best practice is for your analyst relations program. Three risks stand out massively. First, there a big gap between the firms that vendors think […]

    Vendors’ five key thoughts about analyst firms

    Vendors’ five key thoughts about analyst firms

    Five things stand out from vendors’ responses to a survey we conducted after our Analyst Relations roundtable at the English Speaking Union. Analysts (including analysts who call themselves consultants or advisors) are often thought to have bias, especially if most of their revenue comes from vendors. Sometimes the effort put into staying informed makes analysts seem very process-driven but less […]

    Join us for the Forum in San José on November 17

    Join us for the Forum in San José on November 17

    Should someone you know be at the year’s most important discussion on analyst relations? We’ll be at the free ARchitect User Forum 2016 in San José, CA, on November 17. Professionals from industry leaders will introduce the sessions: Lopez Research, Digital transformation; IBM, AR in large organizations; Cognizant, Managing analyst events;  Capgemini, AR knowledge management; Wipro, Intelligence-driven relationships; and ARinsights, AR […]

Right price – Acquire those services that meet your basic requirements [Purchasing Analyst Services, Part 5]

icon-budget-cuts-105w.jpgIn the past the way to avoid the price increases that Forrester and Gartner are initiating on a regular basis would be to use the usual purchasing best practices. These include waiting until the last minute before the end of the quarter or better yet end of the fiscal year to finalize a contract, playing one firm off another, signing up for a multi-year contract, and consolidating purchases to obtain a larger discount.

Alas, these techniques are not as effective now with Forrester and Gartner as they were in the past.

While there are hundreds of analyst firms, with some large ones like AMR Research and IDC, the unfortunate reality is that when it comes to the market for end-user advisory analysts, Forrester and Gartner have achieved a de facto duopoly. Because the market for their services is so underpenetrated, neither firm has to compete on price to grow revenues, clients, and market share.   Therefore they can concentrate on improving margins while growing revenues by expanding their sales forces. It is a very cozy duopoly. To date there have been no serious contenders to the Big 2 as replacements for the acquired Giga and META. As long as firm executives continue to impose pricing and discounting discipline on their sales forces the opportunity to negotiate a better price with the Big 2 is limited. Gartner has been especially disciplined, using a “Bloomberg model” of a price for the first seat, a slight discount for the second seat and no incremental increase in discounts after the second seat regardless of volume. So while it is still possible to negotiate on price, the opportunity is not as great as in the past.

The best way to get the right price for the analysts services you require is not to put all your effort into trying to whittle down Gartner’s or Forrester’s price. Rather, the approach for getting the right price is to get the right service from the right firm as laid out in parts 3 and 4 of this series (see below for links). By not falling into the trap of buying the most expensive services from Forrester or Gartner, you can still get the right price. 

SageCircle Technique:

  • Enterprises and technology vendors alike should not focus all their energy on obtaining incremental or minor discounts from Gartner or Forrester in the next round of contract negotiations
  • Buyers of analyst services should invest effort in seeking out alternative suppliers of advice in order to get what is needed at the right price

Bottom Line: As long as there are no serious competitors in the end-user advisory business to challenge Forrester and Gartner they have no motivation to discount their pricing regardless of the size of the deal. Buyers need to focus their energies on alternative sources of services as the way to obtain the right price.

Question: AR teams – How much of your effort when it comes to negotiating contracts with Forrester and Gartner is focused on getting price reductions?

This post is one in a series on the SageCircle blog about how buyers of analysts service, whether enterprise IT or tech vendors, can ensure they are might the right purchasing decisions. For those analyst clients needing much more depth than what is in this blog series, please check out the SageCircle AR Wiki where you can find a lengthy thread of articles that provide more depth and breadth on this critical topic including checklists and tools.

  1. Using five rights to avoid a wrong when it comes to purchasing Gartner or Forrester services
  2. Right reasons – Evaluate why you are purchasing analyst services
  3. Right services – Align the services you buy to better match the reason for info or advice
  4. Right firms – Search out alternative services providers that better match your reasons
  5. Right price – Acquire those services that meet your basics requirements
  6. Right usage – Drive usage of the services you buy to ensure maximize business value

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  8. […] (META by Gartner and Giga by Forrester). Of course, SageCircle first mentioned this duopoly in a July 2008 post and then reiterated our opinion in a March 2009 post. This is an important point because it shows […]

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