The Bane of Technology Analysts Is ... Technology?
Can technology analysts survive the onslaught of new media? Is there as much value inherent in their quick takes on industry issues when the blogosphere is filled with "analysts" whose commentary may be based on less -- or different -- research but is perhaps equally insightful?
01/15/10 5:00 AM PT
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 benefitted from their tireless hours of research, their trendcasting, their ability to synthesize their analyses in a pithy quote or a 20-second soundbite.
Obviously, I'm not alone among broadcast, print or online journalists in this regard. Ever since the explosion in business news in the mid-to-late 1990s -- especially in television and the then-nascent online venue -- analysts have become stars in their own right, thanks to their willingness to share intelligence: the kind they gather like CIA field agents and the kind that God gave them.
Of course, it helped that their companies wanted them to appear on TV with me during my CNBC days; hence the installation of cameras on brokerage firm trading floors and mini-studios set up at tech firms like Forrester and Gartner. Even when I moved to CNN and Headline News and focused more on the tech analyst firms because of my desire to provide more mainstream and less financial-arena coverage of technology, the leading analysts would give me 3:30 of their time to talk up the latest in consumer electronics, e-commerce, cybersecurity.
All of this continues in the post Web 2.0 era, and I still rely on tech analysts from firms big and small for their insight into issues like connectivity/smartphones/mobile computing, gaming, social media and the like. They are a smart bunch, to be sure, and many of them also sound like the kind of people you would want to talk tech time with over a beer or two. (For the purposes of this column, I will be focusing on technology analysts, not the securities analysts who pass along "buy" and "sell" ratings for tech company stocks. As the dust settled from the dot-com bust, the latter group was hit by highly publicized scandals involving some analysts who enthusiastically pumped up vaporware companies, and others who gave clients encouraging feedback on companies they covered while privately trashing those stocks to colleagues.)
Joining the ranks of analysts who work for big firms like Forrester, IDC, Yankee, etc., are others who aren't associated with big firms, but are still able to share their tech knowledge and predictions with the world. We call these people "bloggers" (Insert air quote fingers here, a la Dr. Evil). Does the top executive of the oldest technology analyst firm in the industry admit that they -- along with the growth of connectivity and more readily available information -- have changed their industry?
"Absolutely," Yankee Group CEO Emily Nagle Green told me over the phone. "We've had to raise our game and get better at what we do. We can't have any areas of latency or nonproductivity."
Green discusses the technology revolutions that brought about this situation in her book, Anywhere: How Global Connectivity is Revolutionizing the Way We Do Business. However, I also wanted her views on something Alex Williams wrote this week on ReadWriteWeb regarding Gartner's US$56 million aquisition of The Burton Group, a smaller research firm.
Williams' contention is that the analyst industry is becoming dominated by top-tier players like Gartner, Yankee and Forrester, and that fewer firms means less diversity of opinion and choices for IT professionals needing consulting on everything from equipment purchases to business practices. Then again, Williams adds, the rise of bloggers and social media hounds who are themselves viewed as "analysts" (maybe their resume includes time at a research firm, or reporting for tech trade publications) has robbed traditional analysts of some cachet.
He does some forecasting of his own, predicting that the analyst job of the future will be a blend of research-gathering, white-paper-writing AND Twitter-stalking/social media monitoring. Williams cites Altimeter Group, featuring rising analyst stars Charlene Li and Jeremiah Owyang, as an example of this hybrid.
Green, as you can imagine, believes that analyst firms like hers will adapt as they always have -- and much in the same way they are urging clients to adapt regarding hardware, software and online strategies.
"In the earliest days, we filled an information need," she said. "There were very few ways to learn, if you were a buyer of computers, what a company's intentions were in terms of their product. Since then, the role of the analyst community has evolved many times. The last big change was in the '90s, when the Internet appeared. Analysts were sending reports to a printer and getting them back in big boxes. The community had to reinvent delivery of insight, to use the Internet the same way everybody else did."
The Web's impact on research-gathering -- forcing additions to telephone-based surveys and in-person visits -- has resulted in "vastly larger and more frequent kinds of research. But while the sources (of information) have mushroomed, we've actually had the opportunity to get better. We all haven't done that, but some of us had. One of the jobs of an analyst is to conduct research, gather information and synthesize that, and not just pass it along, but add value to it."
Green acknowledges that social media must find its way into the traditional analyst's toolbox, just as it must with journalists. Access to direct connections and two-way, real-time communications means "we can ask questions almost immediately and we can disseminate our ideas almost immediately. This is bringing about a transformation in the analyst community, with the roles of blogging and tweeting, and how we collect commentary. These are tremendous new gifts made to the analyst community as to how we do our job, but they also come with more competition."
Yet Green believes (no shock here) that firms like Yankee will be able to avoid the same kinds of Web-driven pitfalls that are threatening media businesses like newspapers, which have been "exchanging analog dollars for digital pennies." The smaller, social media-driven firms are loaded with talent and enthusiastic insight, but "can they build a business model in which people pay annually for subscriptions for ideas when there are so many sources? I don't know."
Analysts ANYWHERE and Everywhere
In Anywhere, Green interviews some of the major players who have helped enable the computing and communications revolutions and their subsequent impact on business; executives of companies that have no doubt benefitted from Yankee's proprietary research at one time or another. The book is intended to help both established companies and startups figure out what they need to do regarding partnerships, product development and customer relationships (monitored perhaps via Twitter feeds?).
"I'm not going to claim that I'm the first preson to say, 'Gee, wow, connectivity could reach everybody in the planet and reach more things in our lives,'" Green said, "but in the last year or two, we've passed some pretty significant milestones on that journey, and the larger audience now needs to wake up to that inevitability."
Those milestones? Mobile phone market penetration, pervasive and perpetual wireless data -- "we're all walking around with the Internet in our pockets" -- social media, app stores, companies like Google making smartphones. The democratization of information access builds on what happened in the late '90s with the democratization of financial information and market access, thanks to the advent of electronic trading.
Yet during that heydey, we also saw day traders skew markets, and message board rumors and speculation pump and deflate Nasdaq stocks. Green reminds us of an oft-used phrase: The facilitation of collective intelligence can also mean the facilitation of collectivity stupidity. "Not only can we collectively chew on something and add decimal points to the value of pi quickly, we can also promulgate misinformation and rumors -- Nigerian kings looking for support and cashing out Swiss bank accounts."
Green's Yankee Group and other tech analyst firms employ some very smart people whose insight and intelligence I've come to value -- especially when they return calls before my daily deadlines. I know that the same forces Green talks about in Anywhere have tripled the number of people asking for analysts' help in decrypting the latest developments in technology, and we're all on one kind of deadline or another.
However, I've also interviewed bloggers and fellow technology journalists who have shown expertise and an articulate way of explaining the latest smartphone app or e-commerce trend.
My only prerequisite? Keep showing me kindness. Trying to keep up with the flood of technology developments has brought me close on occasion to Blanche DuBois-style madness. Analysts of all kinds keep my head from going under the waves permanently.
TechNewsWorld columnist Renay San Miguel started his journalism career with his hometown newspaper in Texas in 1979. He moved to television in 1985, anchoring, producing and reporting in Austin, Dallas and San Francisco before joining CNBC as a technology correspondent from 1997 to 2000. Following a stint with CBS MarketWatch, which included filing tech stories for the CBS Early Show, San Miguel joined CNN Headline News in 2001 as an anchor/tech reporter. He also contributed digital content for CNN.com. After his 2007 departure from CNN, San Miguel founded Primo Media and now freelances in television/online reporting and media consultation.