A common client inquiry we receive is in the context of someone negotiating with Gartner. Our clients want to know why in the midst of a terrible economic downturn, when vendors are cutting budgets left and right, that Gartner does not exhibit greater flexibility (i.e., cut prices) when it comes to contract negotiations. The short answer is that due to its end-user advisory market dominance – we estimate that Gartner has ~70% of the end user contracts – it does not have to be flexible.
However, this issue is a little more complex than slapping a “monopolist” tag on folks over on Top Gallant Road. The reality is that there is an effective duopoly with tacit partner Forrester which gives them both the flexibility to be inflexible with it comes to negotiations. The last time this market saw pricing and packaging that in anyway favored the buyer was the mid-90’s when Giga and later META used significantly lower prices and “all you can eat” research seats to take market share from Gartner and Forrester. Alas, today there are no such firms that can play that role to counter Gartner and Forrester. As a consequence, the Big Two’s CEOs habitually inform Wall Street that they are maintaining their pricing and discounting discipline.
However, it is possible to reduce spending – notice we did not say “save money” – with the Forrester / Gartner duopoly without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to wrangle a better discount from the sales rep. Rather it takes:
- Knowledge about the firms’ business models
- Knowledge about the firms’ research methodology and analyst culture
- Knowledge about the true business value of […]
In conversation with an AR manager we received an interesting question: “What is the shelf life of published research?”
Answer: Somewhere between fresh fish (goes bad in days) to a Twinkie (a quasi-food snack that is rumored to last for infinity).
Formal analyst publications, e.g., a research note, can have a long gestation period due to going through peer review, management review and editorial (mostly good things) and get stuck in email waiting for minor changes while the analyst is out of the office (a bad thing). As a consequence, some formal analyst research can be out-of-date the day it is published.
That is why clients, whether end user or vendor, need to critically review the research for “freshness” and leverage inquiry […]
Rarely do analysts call out another firm on perceived failures in research, but Rob Enderle does just that in Liars, Damn Liars and Statistics: Gartner Goofs on Server Numbers. Money quote:
“…However, the accuracy of these numbers even inside corporations (given how deals are accounted for) would suggest that getting within 5 percent of actual sales would be very difficult, let alone having a high level of confidence that under 1 percent actually signified real market leadership. …”
Rob then goes into an interesting discussion of the shortcomings of market share numbers and the methodologies used to create them. The article is well worth reading. It would be interesting – fun even – if more analysts engaged each other in the marketplace of ideas rather than having a monologue with clients.
SageCircle has long said that market share numbers from the market research analysts can provide interesting insights into the direction a market is going. However, relying on the numbers alone without […]
(After an interesting Twitter-based conversation with Illuminata’s Gordon Haff and former IDC analyst Ida-Rose Sylvester over the use of the word comprehensive, we have decided to use the word all-inclusive instead. )
One aspect of the analyst industry that is not widely known by technology buyers (aka end users, usually IT managers) and vendors is that industry analysts do not have the resources (e.g., time and travel budget) to conduct and publish comprehensive all-inclusive research about a market. Advisory analysts gather most of their data from client inquiry and vendor briefings. The major firms do not conduct product evaluations, lab tests against specifications, or quality of service investigations.
This point was highlighted by Forrester analyst Jeremiah Owyang in Starting the Forrester Wave: White Label Social Networks and Community Platforms about some research he is working on:
“…I made a call for the vendor product catalog in this market, (and via email and twitter) that document is a detailed index of over 40 vendors in the space, (aprox 50% of the market) and will be available to Forrester clients…”
“…Due to the rigorous methodology … The Wave will only include several vendors.”
There are two key points here, one is that the vendor catalog is only a subset of the market and, two, the Wave will be a further subset of the vendor catalog the analyst assembled.
For vendors in this market these points should send a shiver down their spines. If they […]
You can minimize analyst firm price hikes by buying the right services from the right firms at the right price. This post is the first entry in a series* that will discuss how buyers of industry analyst services can manage their analyst contracts and minimize the impact of price hikes on their budgets.
Since Gene Hall took over as Gartner’s CEO in August 2004, he has diligently worked to raise Gartner’s ASP (average selling price) by eliminating discounts, enterprise-wide agreements and competitors while instituting price hikes for legacy products and launching new premium services. Under the cover that Gartner offers, other firms – especially Forrester – have been raising their prices as well. While it is entirely the firms’ right to price their products as high as the market will bear, these price increases are putting a burden on clients’ budgets. As a consequence, IT managers and vendor market research buyers need to carefully evaluate their analyst services purchasing decisions to ensure that they are maximizing the return on their purchase.
There is the old saying in the US and perhaps elsewhere that “two wrongs do not make a right.” For this series, we are going to flip that saying around with the idea that “five rights avoid a wrong.” The right actions that analyst services buyers need to take are:
- Right reasons – Evaluate why you are purchasing analyst services
- Right services – Align the services you buy to better match the […]
SageCircle promotes the use of inquiry and we have offered suggestions on various topics for both Enterprise IT research consumers and Communications and IT vendors. In general, vendors spend far less time doing inquires than they should. This both decreases the business value they are receiving from the analyst contract and misses some important soft dollar benefits that are hard to achieve in other ways. Not getting value from the inquiry contract also contributes to the perception of some vendor executives that advisory analysts like Gartner and Forrester are “pay for play,” otherwise why spend the money on the annual contract. In this post we will look less at the techniques and more at the realized benefits of a program of regular analyst inquiry.
Gaining real information
The stated purpose for inquires is to gain greater depth and understanding of an analyst’s research and opinions. As always, you should review the currently published materials before scheduling a briefing. However, inquiry can provide insights into an analysts’ work-in-progress and allow you to […]
For the most part the SageCircle blog concentrates how various members of the tech analyst ecosystem interact more effectively with the analysts (e.g., AR best practices and research consumer tips). This post is an experiment to give the community a chance to give a few friendly tips to the analysts.
SageCircle heavily encourages the use of inquiry for both communications and IT vendor AR teams and end-user client researcher consumers. While most analysts are well prepared for inquires we have personally experienced and received comments from members of the analyst ecosystem about those analysts that might have needed a bit more coffee before getting on the phone. One not so amusing story is the analyst who could not discuss the research he had written, could not remember writing it and […]