Do analysts suffer the same economic pressures as the rest of us?
When people cut costs, what industries feel the pressure?
Gartner predict themselves that things are going to be tough in 2008. Mark Raskino explained:
For businesses with global reach, we note that the clouds are gathering rapidly over the UK, US and Japan…
Forrester also share this view. Andrew Bartels echoes Gartner’s comment:
Most technology leaders know where to look for savings in the IT budget: delays in capital investment in equipment; cutbacks in contractors and consultants; cancelling projects with marginal returns on investment; re-negotiation of vendor contracts; and greater use of efficiency tools, such as outsourcing or consolidation. Calculate potential savings and risks, then identify projects or investments that need decisions now.
Often I feel that we are talking ourselves into a recession – however, there can be little doubt that uncertainty is one of the chief catalysts for a downturn in the economy. Companies around the world may not be cutting costs but they may be more cautious before spending any money.
In this time of greater diligence, I wonder whether analysts weather this storm. One view could be that seeking advice on procurement is the best way top cut costs. Ovum for example set a target of saving their software clients $1bn in procurement costs this year.
But what about the many analysts whose income is largely derived from vendors who use them for intelligence gathering. Will these firms do as well?
I am not so sure.
There is a view that IBM keep the analyst market alive. I do not believe for an instant that their investment in boutique analyst houses affects the output from them. I have discussed and praised the patronage model and believe that the world needs more than a few global analyst firms who are often more agile and can get to the heart of a matter far quicker than their counterparts.
Nevertheless as I write this I am interested to know which companies will be around in a year. Mergers and acquisitions aside I am concerned about the level of investment that the smaller analyst firms will receive whilst this ‘dip’ lasts.
Perhaps the real litmus test will be to evaluate how Gartner fair – which will be revealed when they share they financial results for Q1 2008. The call and webcast are scheduled to begin at 10:00 a.m. Eastern time on Thursday, May 8, 2008. Listeners can access the webcast live on the Internet. A replay of the webcast will be available for approximately 90 days following the call.
Of course, there is a personal side to this too. What about the people who service the AR industry. AR professionals need to ensure that we continue to bring value to our clients and adapt in troubling economic climates and focus our clients limited time and resources on activities that will have the biggest impact – no matter which firm that may be with.
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