• Recent Posts: Influencer Relations

    Saying farewell to David Bradshaw

    Saying farewell to David Bradshaw

    A funeral and celebration for David Bradshaw (shown left in this 2000 Ovum awayday photo, arm raised, with me and other colleagues) is to take place at West Norwood Crematorium, London SE27 at 2.45pm on Tuesday 23rd August and after at the Amba Hotel above London’s Charing Cross Station, on the Strand. David considered that that Ovum in that incarnation was […]

    David Bradshaw 1953-2016

    David Bradshaw 1953-2016

    David Bradshaw, one of the colleagues I worked with during my time as an analyst at Ovum, died on August 11. He led Cloud research in Europe for IDC, whose statement is below. David played a unique role at Ovum, bridging its telecoms and IT groups in the late 1990s by looking at computer-telecoms integration areas like CRM, which I […]

    AR managers are failing with consulting firms

    AR managers are failing with consulting firms

    Reflecting the paradoxical position of many clients, Kea’s Analyst Attitude Survey also goes to a wide range of consultants who play similar roles to analysts and are often employed by analyst firms. The responses to the current survey show that consultants are generally much less happy with their relationships with AR teams than analysts are. The paradox is that as […]

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

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

    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 […]

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

logo-forrester.gifVendor AR teams find it useful to understand the size and nature of an analyst firm’s clients when they are trying to decide if that firm has direct influence on their sales. Analyst firms whose clients are primarily vendors have little direct impact on sales deals because they are not advising IT managers and other technology buyers. Those firms with a significant contract value with enterprises can have a dramatic impact on sales especially through ad hoc, phone-based inquiry (see Don’t discount the business value of analysts’ 350,000+ phone-based inquiries with end-user clients) and signature product or market research (e.g., Magic Quadrant and Wave).

In its SEC Form 10-Q, Forrester Research provided some details into its client base. While not perfectly transparent, it does provide interesting insights. The filing reports the revenue breakdown by the three Client Groups, which have their own dedicated sales and analyst teams. There is also an “Other” category which consists “primarily of sponsorships and event tickets.” The “Other” category makes the percentages fluxuate quarter-to-quarter depending on the number of events that occur in the quarter.

Table - Forr Client Breakdown Q3 2009

As the table illustrates, roughly 40% of its revenues in the first three quarters came from its IT Client Group, which SageCircle interprets as “end users” at enterprises. This is a critical community for many technology and telecommunications vendors as these are often the primary buyers of technology, especially IT infrastructure (e.g., servers, storage, systems integration consulting, enterprise applications, et cetera).

The roughly 29% for the TI Client Group, focused on vendors, represent analysts who primarily advise vendors –although they can advise end users through so-called courtesy views and inquiries – and thus do not have a direct impact on active sales deals. The “Other” segment, the events business, does not have an analyst team so it does not have a direct impact on active sales deals.

So does this mean less than half of Forrester’s clients are those prime IT buyers that vendors prize? Not necessarily.

The M&S Client Group, which is focused on marketing professionals, has as part of its mission “Objective advice on which tools and technologies will best connect you to customers” (from Forrester’s website). This particular focus should interest vendors as it implies that at least some of the M&S analysts have a direct impact of sales deals. Unfortunately, Forrester does not provide guidance on how much of the M&S Client Group analyst team’s time is spent influencing technology product purchases versus providing “Data-driven insights” on “changing consumer behavior” using Consumer Technographics® survey data. So some percentage of M&S’ roughly 27% can be associated with clients who buy IT and telecommunications products, software, and related services for marketing purposes.

Assuming that Forrester’s total business with IT buyers is about 50% and with Forrester’s full year 2009 guidance of $220m to $233m, we estimate that Forrester’s “end user”-like client business is approximately one-seventh that of Gartner’s end-user business. This interpretation of the earnings data might come as a surprise to those vendors who perceive that Forrester is much more of a peer of Gartner. What this exercise illustrates is that perceptions can be wrong and depend a lot on the market space of the vendor.  

Broader Lessons

AR professionals need to peel the onion to get the data they need to make important analyst list ranking decisions and understand what is important is the measure of influence of the individual analyst in their market space regardless of the firm. Not even Gartner wields significant influence across all the IT landscape. In some situations, boutique analyst firms and single practitioners can have more relevant visibility or influence than the largest firms.

Related post: Forrester Research Q2 2009 earnings

SageCircle Technique:

  • AR should review assumptions about any analyst firm’s size in the analyst ranking and tiering framework used to create analyst lists
  • AR should inquire with their Sales colleagues to see if the number of prospects and customers mentioning Forrester research is shrinking, growing, or staying the same.  This will help determine Forrester’s continuing ability to influence vendor sales

Bottom Line: While Forrester is clearly the number two advisory firm in terms of total number of end-user clients, it should not be assumed that its reach is as great as market behemoth Gartner. AR needs to take a fact based approach when making decisions about allocating resources for outreach activities.

Question: AR – What was your perception about the relative size of Forrester’s end-user client base versus Gartner’s?

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