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In 13 years of covering technology, I've evolved into the journalistic equivalent of Blanche DuBois; I've always depended on the kindness of analysts. Whether they were securities analysts working for the big Wall Street firms or technology analysts toiling for the major research companies targeting CIOs and IT-types, I've benefited from their tireless hours of research, their trendcasting, their ability to synthesize their analyses in a pithy quote or a 20-second soundbite.
To a certain extent your article and certainly the first two comments fall in the common trap of thinking that what the major advisory analyst firms sell is published research. If that was the case then the firms would definitely be in trouble. In fact, Gartner killed the Datapro product (a database of comparative product and vendor information including product features and functions, which it acquired in 1997) in the early 2000’s because that information was easily found on the Internet.
What the advisory analysts sell is personalized advice delivered via phone-based client inquiry using a retainer-based business model. You point out several times how valuable these conversations are for you. In fact, Gartner conducted over 300,000 inquiries and conference 1-on-1s in 2009, an increase of more than 25% over 2008. Why? Because in a recession, time-strapped IT managers are looking for more advice to help them manage risk.
Using Gartner again as an example because its numbers are available via SEC filings, Gartner added 962 large enterprise clients in the first three quarters of 2009 (Q4 earnings call is on February 9). These large enterprises spent top dollar in the middle of a recession even with – or because of – the explosion of alternative and free/low cost sources of information and advice. Gartner, Forrester, Ovum and others with similar business models continue to grow their enterprise client base because they have a very direct value proposition that they have proven over time, which is why clients consistently renew their annual advisory contracts, with the first being the most important:
1. We will SAVE you MONEY
2. We will save you time
3. We will help you manage the risk of technology
4. We will help you reduce your stress
That is not to say that bloggers and other alternative sources do not play an important role in providing enterprise technology buyers with important information and insights. In fact, we first wrote about the “Fog of Influence” in February 2008 to address the evolving influencer landscape.
This is only the tip of the iceberg when it comes to understanding why savvy industry analyst firms thrive in the age of social media. For more reading here is a roundup of articles on the topic of advisory analyst relevance in the age of the Internet and social media (http://sagecircle.com/index.php?option=com_wordpress&p=4327&Itemid=54). This round up has links to the individual articles. We look forward to a lively discussion on this topic. Some of the articles in this list include:
* Advisory analysts have an edge over blogs and Internet sites on vendor negotiation advice
* Don’t discount the business value of analysts’ 350,000+ phone-based inquiries with end-user clients
* Why Twitter is Useful for Analysts
* Research is commoditized – a dead idea
* Context, advice, reputation and time: How analysts can thrive in the social media age
* Published research is only the tip of the iceberg
* Influence is not a zero-sum game so analyst influence is not necessarily diminished by the rise of bloggers
* Introducing SageCircle’s Fog of Influence
THE experts on the analyst ecosystem and analyst relations best practices
Great story. It's no irony that the industry that technology analysts helped create is also helping chip away at their power and influence. This is not to take anything away from the quality of their pricey analysis, but more in recognizing that there is an ocean of great information courtesy of experienced technology professionals who write about their 1st hand experiences. The true spirit of cooperation and passing along the benefit of their experience is rewarding in itself.
There's also a certain amount of celebrity one can garner through blogging on relevant subject matter. Value is manifest directly in the number of hits, downloads and comments. It's perhaps a better measure of worth compared to the 30 page research paper, asking price $3,500.00 dollars.
I appreciate that there so many great technologists and good people on the Internet. They share thoughts, debate and jibe one another. It's seems it's in the spirit of advancing a greater cause and they're willing drag people along kicking and screaming. All of it without the need for signed contract or retainer. I guess I'd call it virtual unconditional love.
I like that.
Hi Renay! You're dead on. The big analyst firms used to have greater control over share of voice when (online) publishing required massive infrastructure. That barrier is gone, and now the smartest voices rise to the top, no matter where thy come from. Moreover, some bigger analyst firms drown out their analyst's voices by anonymizing and homogenizing their online presence (errr...most of the big ones you note come to mind).
Importantly, there's a big benefit to analyst bloggers who don't work at midsize or big analyst firms. A new breed has emerged, ones that work at real companies, in the trenches. Consequently, these "real working executives" often bring far more practical and grounded perspective to issues. I find them to be very credible, and they have less incentive to drive home the sensational quote.
And there's another big force threatening the traditional syndicated analyst business: that of online aggregators and weak firewalls (which is similarly challenging the news business). Moreover, analyst firms often will often release and publicize their best work, because it will drive headlines. Conversely, a lot of the poorer work goes unpublicized.
Still, there are a few analyst from traditional firms I still admire. But, overall, the importance of the industry is diminishing, particularly for the syndicated business lines. I suspect more effort will go into consulting and custom research.