The black hole of industry analysts… SMB
For many years I have complained that the major analyst firms do not take the SMB market seriously. They have little inclination to put the necessary resources behind what is undoubtedly a very tough market and give solid advice.
When Dale Vile at Freeform Dynamics conducted on online survey with The Register, I think he may have found the reason why. What’s more, the data that he has captured fundamentally changes what the perceived impact of Tier 2 analysts are.
I should point out at this stage that Dale sent me his findings from his barometer study (complete with raw data) and allowed me to make any conclusions I see fit. This study was largely UK/US with 500 corporate respondents, 500 mid-market and 900 SMB.
What I like particularly about this research is that it provides some metrics behind what many people have previously ‘knew’ but without having any substantial facts to back this up.
The first conclusion is that in small and mid-market companies, the head of IT controls the purse strings.
Not a massive shock I understand but if you take into consideration a further point regarding access to analyst research, you can make some interesting deductions.
What does this show?
IT Managers in small and mid-market size companies, who largely control the decision making, have virtually no access to analyst research.
This is quite startling for two reasons.
Firstly, it shows that customers of Gartner, IDC and Forrester etc. are not maximising their use of their subscriptions. The statistics show that only 60% of the IT management within organisations that subscribe have access to the research – let alone all the practitioners who are also involved in the decision making. My message to companies that do subscribe is ‘make good use of your research and send it throughout your organisation’.
Perhaps the most important conclusion is that two thirds of IT managers in the corporate sector don’t have access to big analyst firm research so are relying on other information sources to keep them informed and help them with decision making. It is this point that brings me back to my initial rant.
Small and mid-market companies have no access to ‘Tier 1 analysts’ so use online methods to help them make a decision. Analyst houses that give away their research online (e.g. Quocirca, Freeform Dynamics), get it republished through online channels (e.g. Freeform Dynamics, MWD), use social media effectively (e.g. RedMonk’s use of blogs and twitter) or are regularly quoted in the media (e.g. Dean Bubley) hit these people and influence their decision making.
The SMB market spends a huge amount of money each year but large companies cannot expect them to subscribe. What the smaller firms have realised is that the route to these firms is via the channels they are influenced through already. These smaller ‘Tier 2’ firms are routinely dismissed by some vendors as not being important – no doubt because they are viewed as being unable to influence enterprise buying. Without going into this argument again, I believe that this evidence gives extra weight as to why it is important for companies to work with Tier 2 analyst houses if only to understand how to hit the SMB market.
Personally I can think of $4oo billion reasons why analyst houses should pay a bit more attention to the SMB market.
Filed under: analyst relations | 10 Comments