AR I Knew Ye Somewhat

Recently I departed the walnut-lined hallways (ha, paperboard cubicles actually) of IT Industry Analyst Relations for product marketing, and therefore, no longer being an AR hack, have decided to pass on IIAR board reelection.  However, I strongly encourage AR professionals to participate in the IIAR:  You need an industry body that acts as your combined voice of AR with analyst firms and a safe place to share best practices.  The IIAR is not-for-profit and has only one goal – to help the AR pro.

My connection with AR is not completely severed – I will continue to lean on Gartner, Forrester, IDC, etc., for market intelligence.  But strictly in terms of AR, I am off the beat. It has now been over 15 years since I shifted out of product development/management into the analyst realm. How are things different than they were 15+ years ago when I first stumbled into IDC as a development tools analyst?

The More Things Change, the More Things Change, 5 Things Specifically

  1. The Digital Analyst:  The Internet and Mobility revolutionized so many things, including AR.  Today analysts’ phone numbers, emails and Twitter handles litter my smartphone, and tweets and blog posts pop up like weeds in an untended lawn during a dry July, and social web sites and blogs crawl with contacts out of the analyst ranks.  Hey, there were online communities back pre-1995; remember Compuserve?  It is still there!   Back then if you wanted to find tech influencers, there you went.  Today you go to FB, LinkedIn, or all kinds of “open” .orgs or other communities sites – and analyst sites of course which were not existent pre-1995.  This has led to the near death of analyst firm physical libraries.
  2. Coverage Overlap:  Because Internet/mobile enable and reward convergence, the circles of coverage are not as discrete as they were during the “client/server” era.  Overlaps due to the nouvelle technologies have forced analysts to think more outside their historic boxes.  Analysts who stubbornly remained totally in a silo have lost some ground.
  3. Analysts Doing Research, Researchers Doing Analysis:  Pre-1995 analysts were either IT advisors or statistical geeks, but those boundaries are blurred.  The qualitative analysts are somewhat more quantitative, and vice versa.  There is still room for improvement on both sides of that equation though.
  4. Sprouting of Small Analyst Firms:  Pre-1995 there was the big two, but today Forrester is usually included as tier-1, so now there is the big three – plus a few thousand others.  Today there are many independent analysts and very small firms, enabled by social media and the ability to type quickly on a mobile device – I think small fingers are a help to indie analysts
  5. PR Masquerading as AR:  Pre-1995 AR was more often aligned with product management, product marketing, sales and/or strategy/executive.  Today AR is more aligned with PR, and often treated like an adjunct to PR.  In my opinion, though, the best AR programs are balanced, and treat all of these constituencies with equal attention and budget.  Show me an AR program that follows in the trail of PR and I will show you a vendor who is unnecessarily losing battles of influence in the sales cycle.

But Some Things Stay the Same… 5 Things Specifically

  1. Pay-for-Play Remains Unchanged:  Several analyst firms have addressed it,  but blatant quid pro quo has not disappeared despite the occasional hypocritical piece written about it by someone in the media.  Heck, some “analysts” are nothing more than 3rd party marketing sites for their vendor customers.   Some day maybe I will name names, but suffice it to say that money to say something nice about vendors is still a legitimate business model.  Gartner remains quite pure though, even if they treat vendor customers like customers today, more respect and less disdain – thankfully.
  2. Relationships First:  A glass of wine still beats a Tweet, or email, or other electronic communication.  You want to form a trusted relationship with an analyst?  Spend some time face-to-face, make the human connection.  I don’t care if you have the most sophisticated social media listening technology in the world, it can’t compare to a handshake, a smile, and a genuine conversation.  Don’t forget we are in this together.
  3. Research wins:  Not every day, but the analysts and analyst firms who really have a survey leg to stand on will stand the longest.  Those that do their homework and share their findings in easy-to-digest fashion were around pre-1995, are around today, and will be around when the “Cloud” is considered legacy.
  4. Gartner is still #1:  Gartner’s imminent demise has been predicted for years. Some have said that peer networks or social media will destroy Gartner. Sorry, I don’t buy it.  Gartner seldom falls asleep at the switch, and they still possess, by far, the largest cadre of strong analysts.  Follow how Gartner has adapted over the past 5 years and you have to take your hat off to them.  But damn they are expensive.
  5. Get a Haircut, Wear a Suit, Take a Shower:  Okay, after lauding Gartner I have to make a complaint that is 15 years old:  some Gartner analysts are poor consultants, so spend your SAS dollars carefully.  Some of them never acquired the chops that professional consultants possess.  Gartner Consulting has those chops, but many Gartner analysts lack those chops.  I think Forrester is in the big three today largely because they hired analysts who could truly consult; who could dress, converse, carry themselves professionally and socially.   Some of those excellent Forrester analyst/consultants burned out because Forrester realized how yummy the margins were on a $10,000 per day consulting gig.  Some of those analysts went out on their own, figuring they could charge around the same amount, and sop up the overhead for themselves.  Maybe that is why some Gartner analysts remain untamed as consultants, but if I were Gene Hall I would require my analysts to attend consulting finishing school.

And with that, buh-bye AR, and thanks to the few CMOs out there who actually appreciate AR – you are an unfortunate rarity.


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V3: It’s All About the Analysts

There is a kind of Google out there in the realm of IT industry analyst firms, a purveyor that turns the successful models of the “Big Three,” Gartner, Forrester and IDC, on their proverbial ears.  This little firm does not market itself very much; it rather eschews the “branded analyst firm” approach where analysts largely become subsumed in the one-to-many brand-first approach, hoping for margins that impress boards and investors.  Rather it aims for some simple values:  It purely focuses on serving its affiliated analysts and helping its affiliated analysts service their clients.  Maybe you have heard of “V3.”

I challenge you to find V3 on the Web:  The URL is actually not www.v3.com but www.valleyviewventures.com – like International Data Corporation goes quite strictly by “IDC” these days, but the URL just hasn’t been changed yet.  You will not be awed by the V3 web site, but that doesn’t matter one iota to Fred Abbott, V3’s founder, who says with utter sincerity, “It’s all about the analysts.”

Fred started V3 in 2002 out of his home after working in sales and sales management at places like Gartner, Giga, IDC and Hurwitz for two decades.  Fred didn’t have any grandiose business plan, didn’t crawl up Sand Hill Road with a Powerpoint and an open palm.  Instead, during the dot-com bust a few analysts who had gone independent were looking for someone else to handle the sales and contract management aspects of their fledgling businesses so they could concentrate on being analysts.  Ever-well-connected Fred agreed to help them out – simple as that.

Five years into V3s slow-growing but flourishing role of acting as the business development and contract management arm for independent IT industry analysts, Linda Ziffrin joined Fred at V3.  Linda’s background is in selling HR applications, and she spent seven years at PeopleSoft during the 1990s. Fred had the desirable problem of too much work to do, so Linda stepped in to help.  Today the amiable, easy-to-do-business-with yet highly effective Fred and Linda, a.k.a. V3, act as the sales arm, either wholly or partially, for some of the most famous and influential analysts in the world including: Rob Enderle who is the most quoted industry analyst in the world; Charles King who writes much of and facilitates the widely distributed and read Pund-IT, Roger Kay ranks as one of the most oft-quoted PC experts; semiconductor guru Jim Handy; and Altimeter Group which houses an exclusive club of top analysts such as Charlene Li, R “Ray” Wang, Jeremiah Owyang and Michael Gartenberg.  This is just a partial list of V3’s affiliates.

Unlike the Big Three who drive their brand at most opportunities, Fred, instead of looking for scale and geographic reach, looks to work with analysts “that could use a little help” and particularly with analysts who like to collaborate with other independent analysts.  Check out Pund-IT at www.pund-it.com and you will find many of the other analysts in the V3 sphere authoring IT industry perspectives.  Fred and Linda also prefer to work with analysts who prefer to market themselves rather than a brand.  Yes, Rob Enderle’s company is “Enderle Group” but everyone in IT has heard of Rob Enderle.  Similarly Charlene Li, Ray Wang, and Jeremiah Owyang made Altimeter Group, not the other way around.  Do many know that Roger Kay’s official research company name is Endpoint Technologies Associates?  Not sure, but many know of Roger Kay.

Just how important is V3?  Well, if your primary metric of “influence” are press citations by analysts, then we might have to change the “Big Three” into the “Big Four.”  Mind you that I believe that the realm of AR has become too PR-centric, probably because the other arenas of influence plied by industry analysts, namely IT buyers and investors, treat interactions with industry analysts with strict privacy.  It is virtually impossible to measure, for example, the number of short list placements an AR team won for a vendor by doing better work than the competition.

But regardless, the “analyst in the press” metric is certainly helpful in measuring analysts in the media communications channel, and here the V3 affiliated analysts shine.  According to tracking of “tech analysts in the media” by IT Memos’ reports (see http://memos.itdatabase.com published on April 6, 2010), V3 had the #1, #3, #6, #9 and #10 most quoted analysts over the past six months.  Gartner had three of the top 10, Forrester one of the top 10, IDC zero.  In fact, if you look at the 50 most quoted analysts from the IT Memos report V3 affiliated analysts reaped 1196 quotations, Gartner had 977, Forrester 612 and IDC 368.

I cannot vouch for IT Memos’ technique.  For example the analyst quote counts were associated with an analyst, and a firm like IDC gets quoted extensively for market share and forecast statistics without naming an analyst.  In fact, another metric IT Memos tracks called “Firm Mentions” resulted in a Gartner runaway with 6978, IDC was second with 3935, and Forrester third with 3308.  The next closest IT analyst/research firm in terms of mentions (IT Memos included firms like “Goldman Sachs” in their list – not sure that was intended, but I am ignoring those counts) was iSuppli way down at 1304.  So at least in terms of analyst firm branding as measured by firm mentions the Big Three are indeed the Big Three.

But in Fred Abbott’s model, who cares about firm mentions?  The V3 brand doesn’t show up at all but the affiliated analysts are at the top of list!  Fred and the independent analysts are doing things differently, and it is working quite well thank you.  Give credit where credit is due:  V3 is right up there with the Big Three in the named analyst quotes metric (note that IT Memos didn’t know that many of the top analysts they listed were V3 affiliates, or at least didn’t report it that way).

Hey industry analyst, tired of getting paid a straight salary for traveling extensively and performing pressure-packed consulting sessions that your firm charges out at $1000/hour or more?  Even if you are making a healthy salary, your cut is maybe $100/hour pre-tax.  These consulting sessions yield gross margins that would raise the eyebrow of even a Larry Ellison.  Analyst, think you have enough connections, credibility and savvy to go out on your own, and either gain better control over your time, your research agenda or how much of that consulting day fee you actually keep?  Fred and Linda will charge you straight 15% commission for your work, and you don’t have to stick your nose into too many of the business details, you get to primarily focus on being a superior analyst.

Do you think you have what it takes to impress Fred and Linda enough for them to take you on?  Fred doesn’t ask for a business plan either.  He will talk with you, help you figure out your approach for no fee, and he and Linda only get paid if you are successful.  As Fred said in my interview with him, “With a new analyst we can try it out for a few months and see if it works.  What we try to get them to understand is that it is all about them, not V3, that marketing themselves is what is important.”  I find it deliciously ironic that V3’s affiliates include some of the most sophisticated analysts at wielding digital marketing and social media, yet Fred keeps V3 down to a bare minimum – no V3 fan club on Facebook last I checked.

Just as open source bedeviled the purveyors of proprietary Linux and Windows, Fred’s antithetical approach has to have some folks at the Big Three scratching their heads.  Despite dubious attempts to tie-up analysts with non-competes (which do not apply in California so not coincidentally Cali happens to be the home of many of V3’s top affiliated analysts), to mix in events and consulting, to outsource some of the lower end research jobs to places like India, to acquire strong niche firms, the Big Three have not undercut the quiet march of V3 and independent analysts.  V3’s straightforward, honest approach has turned the industry analyst community 90 degrees.  Why?  How?

“It’s all about the analysts.”– Fred Abbott, Founder and President of V3.  How refreshing.

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