Contentious conversations in analyst relations
Contentious conversation 1 – integrity of analysts and the future of AR
Blog my Tom Bittman from Gartner – A Rant – My Integrity as an Analyst
Summary: Gartner analyst angry that he has to justify his integrity
My view: Edelman trust barometer consistently shows that over the past few years analysts are the most trusted
Key comments: Vinnie Mirchandani questioning whether Gartner’s reliance on large vendor subscriptions means that their reports are truly representative
What this means:
There is an ongoing fight regarding how independent an analyst can be if they receive money from vendors. Whereas some firms in the past have been ‘White Paper for hire’ houses, they tend to lose industry respect very quickly and go bust. What can not be in doubt is that in subscribing to an analyst house, you have the ability to pay for more time in front of the analysts leading to a greater chance to educate them – often this will result in a more favourable position. I am not saying that to be successful in AR you need to have subs, it is more a case of – it helps.
The secondary argument (and possibly more important) is by having a look at who the key participants in this debate are. On one side we have the analyst and the other we have the IT advisor. The latter group frequently comes from an analyst background (see Vinnie Mirchandani, ex-Gartner; Ray Wang, ex-Forrester) but in their current role do not have a research agenda. By default this does not make them (in their mind) an analyst.
However, I believe we are playing semantics. Our view in AR needs to be simple: if they affect IT buying then they are an influencer and need to be dealt with accordingly. AR most closely deals with these individuals – we may need to adapt a different name so that they don’t get upset by being labelled analysts but they will remain a key audience for us to engage with and should continue to enjoy the same disclosure benefits that traditional analysts enjoy. With the growth of firms like Altimeter Group, this fundamental shift towards a larger influencer group will become more important than ever over the next few years.
Contentious conversation 2 – analysts liable for ‘incorrect’ positioning
Article in IT Knowledge Exchange – Email archiving vendor sues Gartner over Magic Quadrant
Summary: Claiming that Gartner’s MQ constitute “disparaging, false/misleading, and unfair statements” about its email archiving product that have done damage to its sales prospects, ZL filed suit for damages of $132 million to account for lost sales.
My view: This fight has caused great PR for ZL but someone’s position in an MQ should not be a surprise. If a vendor believes they are unfairly positioned the time to argue this point is before the quadrant is published.
Key comments:
The power of a positive ranking in Gartner is immense because it is often the case that large purchases of technology are based exclusively on the MQ Reports…For instance, the Office of the Inspector General, Department of Veterans Affairs (VA) recently conducted an investigation into the use of the Gartner’s MQ reports in connection with the VA’s $16,000,0000 purchase of certain leases and services from Dell. The Office of Inspector General reported that the VA made this large purchase based solely on the leadership rankings in the relevant Gartner MQ report. (source: initial complaint)
In Mark Logic’s excellent analysis of this case, he makes the following comment about whether having the best technology means that someone should be positioned superior to another company who simply has better sales and marketing.
While Ingres arguably had the best database technology in the 1980s, Oracle’s sales and marketing prowess caused it to win the market and any analyst who — focused solely on the technology — would have recommended Ingres at that time would have done his customers a disservice.”
What this means:
Like it or not, Gartner are the original 800lb gorilla. Whether it is right or wrong, the fact remains that their MQ inherently has an influence in IT buying behaviour. What AR pros need to do is work with the analyst ideally six months prior to any publication to fully understand what success criteria are to be better positioned as a leader and work towards those goals. A great way to understand how to work with an MQ can be seen in the great IIAR White Paper.
We have to accept that the firm with the best technology does not always win (see Betamax vs. VHS) – for a company to be successful, they will need to have a great product that is complemented by a sound go-to-market strategy. Luckily for us this is where AR can help.
Filed under: analyst relations | 6 Comments
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Technobabble 2.0 
Questioning of integrity never goes away even if you have a great reputation. It has been happening for years, I can remember when a freelance consultant in the early ninety’s wrote for my previous firm and also wrote for another research firm and the preceived problems it created. I can also remember when Gartner bought DQ questions were raised regarding independence. The answer I have found after handling over 50 analysts and consultants over the years is very simple- if an analyst follows his original thinking, a robust methodology and always calls it as he see’s it, he/she will stand out over time and will be regarded as impartial. This does not mean they will not be accused of being partial – it will frequently happen when a vendors original viewpoint is not reflected by analysis – but they just have to take it and let their peers, vendor executives and AR, client CIO’s speak for them.
As regard to the second point, again this will not go away, remember CA and Oracle refusing to work with certain Analyst firms some time back – all you can do is fall back on your methodology and show transparency of application.
At the end of the day we live in a world where everyone has views and they all contribute to our greater understanding.
Mitul
Mitul, you make a salient point. Everyone’s views do contribute to greater understanding, particularly in the conversation economy of today – as peer endorsement is more easily shared and found online (through blogs, tweets, SlideShare, YouTube, networks like LinkedIn), does this begin to fade the dominance of the “600lb. Gorilla Analyst” in the greater mix of opinions around any given technology?
As my CTO asked in his blog post today, does this lawsuit even matter anymore?
This is interesting and may have come up (yet again) because other firms that are 800 lb gorillas as “analysts” were recently shown to have been covering things up due to their relationships with their paying customers.
#1) A while back … ratings firms for the banks. The banks sold them a bill of goods (oh look how we’ve spread out the risk so well, this junk is now all AAA) and it was complex enough that the ratings agencies either couldn’t or just didn’t dig far enough into it to find out that it was still mostly sludge.
#2) Very recently, PwC’s purchased report for AHIP where they were told to ignore anything that made the bill look less expensive and to only analyze the spending side to come up with a false number. Again, PwC is supposed to be a respected analysis company, but they sure walked away with a black eye on this one and even had to publish a sort of apology stating that they did just what they were paid to do.
Given these, in addition to vendor complaints as well as some user complaints, it is no wonder that Gartner, as the biggest target, would get some push-back in this area.
All that said, it really is up to the individual analyst and some of them do indeed shine brightly, but (probably due to their size) there are too many that don’t due enough of their own thinking and due diligence, and therefore become almost a branch of their favorite vendor.
Chris – Fade the effect of the “600lb Gorilla Analyst” yes but only up to a point. My views on the market changing dynamics are given here http://iiar.wordpress.com/2008/06/24/around-mitel-mehta-of-tekplus-in-10-questions/ (point 2). If you see what happen before Gartner, you will get an idea of how numerous data points and views came to the market via numerous delivery channels. I believe we are at that point again and dilution of the leading firms will happen as smaller/individual players show their depth of knowledge, independence and transparency. (it will first go through the stage of the one that shouts the loudest before it filters out). However having been in the market for a long time one thing you can always say is that the leaders will always be in demand at the large clients as buying habits are hard to change and nobody gets fired for taking advice from a leader! – some cheques are meant to be written for certain companies.
Mitul
Interesting points, but I think it is fair comment to say that the MQ is by far the most influential “single element” in the IT procurement process today.
There may well be thousands of data points available, but in my career I have lost count of the IT managers and CIO’s that have told me flatly that if it isn’t in the top right quadrant it is not going on the short list. I am yet to hear any one express the same or similar conviction about blogs or social media.
I am an analyst and have been for a long while, I know many people at Gartner and have deep respect for some and frankly less for some others – that is to be expected, for the argument here is not with individual analysts, but with an opaque business model that blurs the line between buy and sell side analysis.
Best
Alan