Why social media scares the analyst firms and vendor AR teams

icon-social-media-blue.jpgIsn’t it ironic that the CIT (communications and IT) analyst firms and the vendor AR teams are often lagging adopters of new technology and techniques when it comes to doing their jobs? Social media, aka Web 2.0, like blogs, social networks, microblogging and the like offer great opportunities for the CIT analyst firms and the AR teams to be more effective and efficient. However, moving to incorporate social media also introduces significant risks for both groups. Putting their heads in the sand and hoping that social media will go away is not

 a viable option. Analyst firms and AR should take a systematic and phased approach to exploring and adopting parts of social media that make sense for their specific situations.
One of the reasons why I co-founded SageCircle with Dave Eckert was to have to the time to research how social media will impact the analyst industry and the implications for AR, research consumers and others. This is a topic that strikes a nerve with analyst firms. For instance, see the HP Corporate AR post Will established analyst firms become dinosaurs to the new media-oriented analysts? and all the comments and related blog entries it got from big and small firms. I have also been told by analysts and other staff at some of the major firms that this post got circulated around quite a bit. On the AR side, my chats with AR professionals have surfaced skepticism about the relevance of social media to their jobs.
Frankly, it’s easy for me to use the word “should” in telling firms and AR to get on the social media bandwagon. However, there are some legitimate concerns for both groups, whether analysts delivering client services or AR educating the analysts. Some of these concerns include:

     o    Direct challenge to business model of charging for every word of content and advice
     o    Direct challenge to the analyst role of being brokers of information between parts of the marketplace
     o    Direct challenge to the carefully built perception that analysts are infallible experts
     o    Direct challenge to employee performance metrics that today measure analysts on research published, client inquiries, consulting, sales support and so on
     o    How to obtain the capital and human resources
     o    Why do it when clients are not beating down the door asking for new forms of interaction
Vendor AR
     o    Major firm analysts want private access to vendor executives, and are reluctant to engage in open forums
     o    Top analysts are often road warriors with little time for e-mail much less other forms of communication
     o    Spokespeople might not want to participate for a variety of reasons
     o    It would cause significant changes to how AR does business –and require new skills, new infrastructure, new priorities, new budget pressure and so on
     o    Why do it when analysts are not beating down the door asking for new forms of interaction – in many cases analysts are already overwhelmed by vendor communications

For social media to become an important part of the analyst landscape, these concerns and others have to be addressed. That said, neither group can dawdle too long in this volatile time. Remember what happened to Polaroid and Kodak who waited too long to address the threat and opportunity of digital photography. Another example is the newspaper industry that ignored the danger that Craigslist represented to their classified advertising cash cow and largest profit pool.
This is the first in a series of posts on social media and its implications for the IT industry analysts and the multiple communities that interact with them.
Bottom Line: Social media is here to stay and can be a powerful addition to the analyst landscape. All parts of the analyst landscape need to start researching what this trend means to them.


  • IT managers – Would you use social media if properly implemented by analyst firms?
  • AR teams – What is holding you back from adopting elements of social media?
  • Analyst firms, large and small – What other challenges concern you about social media?
  • Reporters – Would you find social media a useful tool to interact with analysts?
  • Financial analysts that cover Gartner (NYSE:IT) and Forrester (NASDAQ:FORR) – Are you questioning firm executives on how they are addresses the potential opportunity and threats of social media?

0 thoughts on “Why social media scares the analyst firms and vendor AR teams

  • I can appreciate why some analysts and AR pros will be cautious in adopting social media. Though, as you say, it’s here to stay. So they ignore it at their peril. I’m a marketer, not an analyst, but it seems that showcasing some of their insights and methodologies can only increase their credibilty and client list. Analyst firms do this kind of thing already when they provide executive summaries for free and charge for their full reports. Don’t give away the store in the “free” blogs, but give current and future clients a taste of what’s in store. The social media are also terrific sources of informationa and insights for analysts, it would seem. Jeremiah Owyang (http://www.web-strategist.com/blog/), who is an analyst at Forrester, already walks this line effortlessly.

  • Hi DJ, I agree with you. Before Jeremiah, Forrester’s Charlene Li started her very successful blog. So Forrester does get it somewhat. However, there are still debates inside some firm whether they should provide press quotes! Very intrenched mentality that will take effort to break.

  • You may be interested in reading the Net-Savvy Executive who compiled a list of analysts who write about social media – you can read their list by following the link.

    Cheers, Jonny

  • I think it is important to avoid lumping all analyst firms and analysts into the same bucket. Like any industry sector – adoption rates for social media will vary for a variety of reasons. For example:

    – Some firms will perceive certain aspects of social media as a threat to historical business models.
    – Some firms will raise concerns over intellectual property.
    – Some firms will worry about research consistency.
    – Some firms will worry about conflicts between established positions and on-the-fly commentary.
    – Some will struggle with evolving from a “publishing” model (where research is formal and controlled) to a “stream” model (where community participation and interative refinement to positions is constant).

    And the list goes on.

    I do believe that actually this is a very exciting time for analyst firms. Personally, as an analyst, I don’t feel threatened at all by social media.

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