Whilst public relations and marketing are mainstream in commercial companies, most analyst relations (AR) professionals are often at pain to describe their role.
AR is a relatively new discipline, tracing its origins in the last 15-20 years when a handful of very large ICT firms institutionalised a function to handle consultants and analysts relation. Nowadays all major technology vendors and services players have established sizeable analyst relations (AR) departments –50 to hundred strong for mega-vendors such as IBM or HP. Its raison d’être is to liaise with industry analysts, providing them a single point of contact and managing the relationship between them and the suppliers.
Who are those analysts?
Industry research firms and independent analysts share one thing and can be segmented by in three business model categories. What they all have in common the monetisation of information asymmetry. In layman’s terms they live through the insight gained through their unique vantage point: as they take briefings from all vendors and for some also survey and speak to technology and services buyers, they are in a position to recoup data, verify information and spot trends. Armed with this inside knowledge, they can generate qualitative of quantitative research which then they can sell as their own IP to both the buy and sell sides.
The three categories of analysts are:
- The prescribers. They have both the sell and buy sides as clients, though received wisdom is that the bulk of their revenues is on the end-user side. They directly advise technology and services buyers on technical and commercial aspects and have a propensity to compare vendors. Example of prescribers firms are Gartner, the 800 lbs gorilla with its 750 analysts and $1b revenues, followed by Forrester and vertical specialists such as Celent in the financial industry. They’re usually not afraid to take an aggressive stance towards vendors to re-enforce their image as independent users advocates.
- The number crunchers have vendors as their main clientèle but also supply data to the equity analysts. IDC is the best-known firm, although Gartner is also in this category of firms that gather and sell quantitative market data (shares, forecasts, etc). Their qualitative reports tend to be vendor neutral or positive.
- The pundits, have ICT vendors as their sole clientele and constitute an extremely diverse population, ranging from analysts-who-blog (and bloggers who analyse) to serial white papers churners, from columnists to renowned experts on a theme.
Some entertain the argument that the advent of social-media tools brings an era where access to information is no longer an issue ; the corollary being that everyone can be an analyst. The reality is a little different: just like everyone can have his/her fifteen minutes of fame though few are truly famous. So, while we’re drowning in RSS feeds, twitter streams and torrents of social network status updates, more than ever we need help to make sense of it all. Gartner would love to see their portal as an ark but a more detailed look shows that a small set (http://bit.ly/vN9GUs) of the online population influences perceptions through content creation and curating. Targeting opinion A-listers is indeed more effective than ever, as their influence reaches farther thanks to the groundswell (http://amzn.to/vf2M4G).
How can vendors and service providers leverage industry analysts?
There are two sides to our relationship with this community.
- On the inbound side, we engage with analysts when we brief them but can also hire them to get their feedback on our strategy –being challenged is a good health check. More frequently, consultants can gain time by leveraging their research both in RFP and in delivery stages –to get up to speed quicker on an industry or understand technology trends for instance.
- On the outbound side, the AR programme aims at generating a goodwill capital with those influencers to then condition the marketplace.
See also this IIAR best practice paper:
- New IIAR best practice primer paper: Who are industry analysts and what do they do? (post)
- IIAR members will find this paper on our Huddle extranet here
- This paper is also available for the general public on this link
I think it’s important to split the prescribers into RAS and non RAS. The availability of inquiry is rare outside the big two and really changes the advice characteristics and engagement model. That’s related to how KCG gets to the four quadrants of its landscape map.
Stephen, How can one be a prescriber w/o inquiry?
Very few firms do REAL inquiry, with good availability of analysts to end user clients, scheduling systems, inclusion of inquiry in the contract etc. But it is, after all, your definition. The other potential axis of delineating on the buy side is general vs. vertical – which is what we use at KCG.
I agree Stephen, very few firms do real inquiry -and are prescribers.
I think both of you are missing out on analysts who influence buyers in other ways than “real” inquiry services, and you both seem to be going that consciously. Why would you do that? They are limited to large analyst firms in the English-speaking developed world. But there is other influence. For example, 4,000 channel partners are consuming Canalys via candafero; and 450+ ICT leaders in Germany have access to PAC for free via the ICT Research Board. And there’s a hundred other channels of influence. Why would you want to discount those because they don’t have a good scheduling system??
Duncan, I don’t disagree there are other types of influence but I was discussing about the “prescribers”. See my AR Compass paper for what those other type of influencers can do for AR: http://iiar.wpcomstaging.com/2013/05/10/iiar-best-practice-webinar-the-ar-compass/
I low-balled both those numbers: Candafero had over 6,000 users and 1,000 DACHs IT leaders are in the ICT Research Board (but around half log in during any one month).
I think there is massive confusion here between “readers” (a measure of simple exposure) and clients (a measure of an influential two-way relationship). The difference between a Gartner type analyst’s ability to gather and synthesize advice based on many points of true user input and a publisher’s ability to collect and comment on speeds and feeds is confusing a lot of AR folks and – worse still – their bosses. Let’s not add to that confusion. KCG interviewed hundreds of Fortune 10K CIOs just two years ago and there was absolutely no sign that publishing or social models were making any impact on their choice of sources for actual buying advice. Look at Gartner’s revenue growth for further proof.
Hi Ludovic. It’s too easy to say that the firms that prescribe purchasing are only those with Gartner-style inquiry services. Of course, the AR Compass outlines that there are various forms of value that different analysts will produce. But the analyst firms which are largest outside the US and UK influence buyers in other ways. Firms like CCID, PAC and Arab Advisors Group clearly are influential, and the mechanisms for analyst influence outside the US and UK still exist despite not resembling RAS inquiry calls.
I get tremendous value from my non-traditional analysts inquiries. I get results quickly; the results are fast and specific and the analysts spend little to no time trying to put it in a bucket or pass it to a peer. Additionally because the analysts at smaller firms cover larger areas – they understand the connectedness of my conversations on different level.
Beth’s last point especially I found interesting. Coming from a smaller firm as I did – though one that’s grown into a medium-sized one (451) – we had to cover fairly broad areas and developed those talents of linking trends and spotting shifts in markets.
Now I’m in AR, what I find frustrating sometimes is small firms all covering the same area from the same angle, which smacks of a lack of imagination or genuine insight, which then pushes you to the larger ones which although quite silo’d, might be able to actually tell you something new about your market or open your eyes to new market opportunities. Some small firms, e.g. Redmonk, have a distinct audience and angle on things, but too many small ones are merely following the larger herd.