The Changing World Of Analyst Firms

It’s interesting to read analysts writing about the changing world of analysts firms, especially the ones with apocalyptic pronouncements. As a soloist focused on a relatively narrow and young niche — social tools — I really don’t come into contact with large companies interested in conventional analysis like Gartner and Forrester provide.

HFS, Will the industry analyst business be dead in five years?

Short-term attention-span theater has taken over, and some analyst firms are oblivious. Very few people have the patience, or inclination, to read detailed reports any more.  Even just five years’ ago, many people only checked email two or three times a day, allowing them to focus on tasks that required a lot of deep-thinking, reading and writing.  Nowadays, most people are checking email constantly, scanning tweets, Facebook status updates, LinkedIn invitations and contributing to whatever social group or network with which they like to spend time. Research needs to be served up in bite-sized chunks to stand any chance of being read.  The analyst firms are slowly becoming aware that few people read their stuff anymore, but persist in “checking the boxes”, forcing their analysts to meet their report quotas each year.  Their problem is that their product and revenue model is based on numbers of reports and hours of enquiry time – they are serving up expensive macro services, where their clients now want the micro.

There’s too much “research” being produced that’s not telling us anything new. I am actually hearing major IT/BPO providers and C-suite buyside executives declaring that today’s “traditional” research “isn’t relevant to them anymore”.  They just don’t see the point in a lot of it.  They’ve figured out how to sell/buy their products and services, and dont need some primadonna in their ivory towers telling them what they already know, using big words such as “ecosystem” and “agility”.  They view analysts as useful sounding boards and occasionally get some competitive intel out of them, but that’s really all the value they currently get, beyond favorable positions in scatterplot charts and after-dinner awards.

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Buyers don’t read research.  Fact. I can tell you from years of experience that buyers will only read a research report if their job depended on it and it’s forced down their throats.  However, buyers love learning things that help them do their job better – they like listening to real experts and learning from each other.  Analysts need to spend as much time as they can talking with buyers and becoming a focal point for idea-sharing, knowledge, data and validation of their strategies.  While some analyst firms know this, many of their analysts rarely have more than two or three buyers in their Rolodex.

The large analyst firms lack rock-star visionaries. In years gone by, there were countless big personalities emanating from the Gartners, IDCs, Forresters at al.  Sadly, that number has dwindled as these firms felt the need to control and scale their corporate brands and keep their payroll under control. Moreover, the last thing they want are clients calling up demanding to talk with Bill, not Ben.  Innovation is bred from people with vision and personality – and the more analysts are “standardized”, the more the personality is drained from the product.  Analyst firms need to create new visionaries for clients – and maybe even dust off a few of the old ones knocking around somewhere in the blogosphere.  Hell – the retirement age is 70 now, so let’s bring some of the old egos back!

I agree that analyst firms have a morbid fascination with writing fat reports, perhaps because they have contrived a great deal of their operations around their production.

To the extent that conventional analysis firms persist in the near future, they will have to shift gears, or better yet, shift their gearing: they will have to adopt social media tempo and form factors, and craft interactive relationships with their clients based on a dramatically more open research approach than they have traditionally employed.

I also agree about the rock stars comment, in part. The very best minds with most distinctive voices are unlikely to accept being homogenized by a corporate machine, or being forced to paint neatly within the lines.

Blog Reports: Are The Traditional Analyst Firms Kidding?

I have maintained for years that the traditional analyst firms — like Gartner and Forrester — are, in general, way out of touch with what is going on at the creative fringe. To some extent, that makes sense, since their raison d’etre is to read the tea leaves for big, risk-averse, slow-moving, late adopter enterprises. With the exception of the occasional savant, like Charlene Li, the sorts of people drawn to these analyst roles, today, are a strange hybrid of journalist and consultant, with some of the positive and negative characteristics of both. They sometimes wrap themselves in the brand of the analyst firm, deriving their authority from the brand rather than their own experience and insight. Often, they seem to have no real business experience, like journalists.

So it comes as little surprise when you stumble across a title like this — Forrester Research: Blogging: Not Even Close To Mainstream — and come to find out that blogging is not mainstream.

Of course, this Forrester piece was written back in 2003, and is countered by Charlene Li’s recent “Blogging: Bubble or Big Deal?” report, which exhorts corporations to get on with it in order to influence the influencers.

At least in the world of blogging, the old dumb stuff we wrote back in 2003 is concealed in the archives, and not pulled up in the face of every visitor based on some keyword search.

But still, I believe that this is just another example of how the analyst firms trying to bank on making timid recommendations to their clients, playing on their fervent hope that tomorrow will be like yesterday. I bet that a quick analysis of the leading firms reports on blogging prior to the 2004 elections would have generally supported the view that blogs are out of the mainstream, cater to greasy-haired geeks, and can be conveniently ignored. How many corporations would have been significantly farther down the road with social media today if more people like Charlene had been coaxing them to take giant steps toward the 21st century, instead of keeping their heads in the sand?

Steve Boyd on RSS “breaking through”

Don Dodge — who is on a tear recently — posts about The new way to launch your product or company:

It doesn’t cost anything to publicize your new product or service. Simply engage a couple of the “A-List” bloggers (Michael Arrington, Robert Scoble, Dave Winer, Om Malik, Steve Gillmor, Cory Doctorow, Richard MacManus, Stowe Boyd, and others) by sending them a link to your new product or service. Tell them what problem it solves and why it is cool. When they blog, people listen. When their stories hit Tech Memeorandum, Digg, TailRank, and other services the story explodes across thousands of blogs within hours.

Nice group to be included in.

In effect Don is suggesting that these uber-bloggers are becoming gatekeepers, and as they discover something neat, or innovative, or fun, and then blog it, gazillions of others follow.

The power law at work again.

And of course companies are not blind to this. That’s why I am getting five or more emails/calls from companies in the process of launching new products, every week.

And I am certain that PR firms all over are honing their “blogger relations” skills, as these uber-bloggers begin to fill the role that “analysts” from Gartner, Forrester, and other analyst firms used to fill, and to some extent still do. Except now it’s specific analysts who have proven their mettle, and not just because of the Gartner brand.

As I wrote a few weeks ago …

[from Who Are The New Gatekeepers?]

It’s a dynamic system, where individual authority — good writing on a topic — leads to emergent authority (as many swarm to read a great post), which allows Technorati to mine those readers’ links, which leads to increased individual authority, and so on. Meanwhile, individuals combine into groups — like the Web 2.0 Workgroup — which confers an almost institutional authority, or are included on exclusive lists in aggregation, like the tech.memeorandum 2000 bloggers.

So, the answer is: there is no gate. There are many waypoints, many street signs, and many ways to go, but no one is barring the gate, or deciding who is let in. This is confusing if we try to apply the old map to the new territory, but not if we try to perceive the new media universe as it is.

But even though things are fluid, and constantly changing, and even though there are a million niches out there, companies will try to simplify the system for their advantage. When they are getting ready to launch new products, the entrepreneurs want there to be gatekeepers, so they can talk to 20 or 30 people instead of millions.

So uber-bloggers are filling an economic and social need, based on the trust and authority that they have developed, and acting as a filter for others. And the entrepreneurs, on one side, and the greater reading blogosphere, on the other, are keeping the lens focused on a short list of a few hundred tech bloggers, whose influence is spiking.

The odd things is how the prior arbiters of tech viability have fallen, and how little they have done in the blogosphere. You expect that Gartner, Forrester and so on would have created hundreds of successful, influential bloggers, rather than just a handful. It could be that the writing and analytic styles of the two worlds don’t jibe, but that seems wrong to me. Perhaps the pay-for-advice model of the analyst firms, or their use of the imperial “we” in their analysis, just don’t make the transition to the blogosphere very well.