Asymmetric Competition With the Gartners of the World

I just finished listening to Kea Company’s three-part podcast, The New Industry Analysts, Who Are They? Although I have already talked to several of the panelists about the subject, I still found the conversation to be compelling.

Generally, Michael Coté and Phil Fersht were skeptical, yet realistic about the future of the analyst industry. As a whole, I tend to agree with their assessments. Phil said that in this age of “headline scanners,” people are just not willing to pay for insight. Michael said that companies are instead willing to pay for third-party content that validates a product or technology decision. Across the board, I heard negativity associated with what some people call “pay-for-play” content. In other words, there is a widely held belief that industry analysts are biased because they receive money from the vendors they cover. Alas, this is also the only type of product or service that vendors reliably pay for.

Horace Dediu and William Tincup represented the new industry analysts that have entered the market. Horace produces analysis for free on his blog and sells a subscription to a newsletter that included even more insights. They both have niche expertise and had already been recognized as thought leaders before they started their own analysis firms.

Since the original panel discussion was broken up into multiple parts, I’m going to provide my own analysis in a few parts. Here are my first two takes:

Gartner/IDC Under-utilize Their Research

I think I heard William Tincup say Gartner and IDC are over-serving their customers. In other words, they have lots of data, but not a lot of insights with causal statements. The big analyst shops’ business models encourage them to provide more reports and data about more and more subjects. Yet, the Gartner/IDC business models discourage making bold authoritative statements that independent analysts can provide. Some really great, prescriptive analysis is being done behind closed doors by elite Gartner/IDC/Forrester analysts. Unfortunately, this often does not end up in published reports.

I think demand for “big thinking” analysis is overstated. This type of analysis shows up in speeches and blogs, but who is actually going to pay for reports or consulting of this kind? When there is a relationship or clearly established expertise, a strategy or consulting engagement can be very valuable, but this does not make for a scalable business. And without a way to create recurring revenue streams, even a star analyst will find it stressful to stay in business over the long-term.

Instead of saying that the big research firms are over-serving, I instead believe they are just under-utilizing their resources. Independent analysts salivate over Gartner/IDC data. Is there an economic incentive for these companies to share their resources?

As anyone who has tried to access a Gartner report knows, they are notoriously difficult to read to unless you’re a client. Client subscriptions and reprint rights are the company’s life blood, but letting a third-party use data/charts creates more exposure and marketing for Gartner’s research. If Gartner were less interested in increasing revenue via  for subscriptions and reprints, then they would be might be more willing to share reports with third-parties that do not have the budget to actually become customers.

I do know that at least Gartner competitor Forrester is focused on expanding its business with increased sales of data and consulting services. In this scenario, the company’s analysts are often engaged because of their access to unique data as opposed to their actual expertise. Even in these cases, I firmly believe that companies can still provide a lot of their data for free because truly valuable, actionable analysis can only be undertaken with complete access to the underlying data.

One way to take advantage of this situation is for a group of smaller analysts to compile their own list/directory of free data and resources. There are so many reports that are made available for free. If somebody were to curate the freely available reports, then independent analysts would be able to take the freely available charts, images and data points and integrate them into their own presentations. As an example, take look at Kapost’s curated content marketing stats, which is a simple approach. Or, if you’re like me and like bells and whistles, then take a look at how ion interactive presents in this Demand Metric report. By using interactive tiles, any analyst can take existing, publicly available charts and provide their own original take.

What to Do With All Those Vendor Conference Posts

Phil Fersht says he knows many “analysts” who make a living by getting flown to vendor conferences and then blogging about it. The vendors get value because they have their message being rebroadcast by an “influencer,” but there is very little analysis occurring. Fersht’s criticisms are similar to those heard about journalists that parrot the messages they read in press releases. Even when there is analysis being added to the reporting it is still framed by the vendor’s point of view. The end result is that the audience gets information it wants but not the analysis and perspective it deserves. In addition, this type of coverage falls into the trap of much tech journalism – it lets users skim the headlines but there isn’t much that can be used to enable an actual action or decision.

I am not opposed to vendors paying for analysts to attend vendor conferences. I think the analysts’ readers are willing to read their coverage of announcements. The only problem with this situation is that there are lost opportunities to provide less biased, more prescriptive analysis.

In this context, would it be useful for a consortium of analysts to republish these types of blog posts, but with value added analysis on top of it? For example, let’s say Analyst John posts a story about SAP’s latest product announcement. Then, Analyst Jane writes a critique of the post with additional information, links or recommendations. Would anybody want to read this? A weekly summary of these critiques could be a product unto itself, sort of like a week-in-review political show that realizes people already read the news but are still interested in getting caught up on subjects.