What  an experience!  Kaufman is undoubtedly one of today’s great vocalists; his voice may not be  as distinctive as tenor Richard Tucker’s or Jussi Björling’s but I must address what makes Kaufman  awesome: he has incredible voice control, is able to sing with complete flexibility from loud to incredibly soft, always with distinctive phrasing, emphasis, and ‘rubato’ ( applying flexible rhythm within musical phrases).

The concert was more than graced by Kaufman’s awesome piano accompanist, Austrian Helmut Deutsch .

The packed audience erupted in bravos at the formal program’s end .  Virtually nobody left until after Kaufman completed his fifth encore; people who finally began to leave, stopped in their tracks as soon as they heard him  again singing with amazing stamina, his  sixth  encore.

Kaufman is certainly terrific when singing opera, but  even better when singing songs. My one concern was that since voice projects directionally (forward), a soloist should rotate somewhat  while singing,  enabling most of the audience to at least occasionally savor the full glory of great singing.

This dance company was founded over thirty years ago, and while other ballet company’s talents might seem smoother (with quite a few having specialty features of one sort or another), this one seemed different to me. It had certainly tapped a large field of choreographers, not only from Brazil, but from all over the world (even including Israel). I guess most of them appreciated Brazil’s folk emphasis, and this company’s eclectic style, including seemingly impossible body positions (angles) as well as unusual and rapid motion both rhythmically and spatially.

My wife and I also noticed many examples of small subgroups of the on-stage cast, dancing at odds with one another but inevitably consolidating beautifully and meaningfully! In other words, while Cisne Negro seemed much less classical and ordered than I had been used to, the choreography was unique and entertaining, and likely meaningful when (and if) fully digested by the audience.

We have been lucky this summer to attend two of the very great companies, the Royal Danish Ballet (in NYC) and the Bejart Ballet (performing at Switzerland’s Verbier Festival). I feel for the career difficulties of dancers due to the physical strains they must endure, but for the audience, dance performance can be a significant treat.

As we moved forward, our responsibility was to continue analyzing the IT industry objectively for all our clients, and not about IBM in particular or for its benefit. Throughout the decade our company’s mission continued the education of all players in the IT marketplace, including those vendors who were meaningful, the large users and investors, and even the press itself.

Despite our unfortunate experience with Big Blue, we did recognize its strong points; but we also felt our continuing responsibility to impart confidence to our clients with regard to asserting their independence from IBM “Big Blue”, compared with how they previously followed Blue’s every whim and message!

We stopped ‘loving’ the firm, to say the least, and some of our analysts developed an extreme dislike, while we retained our influence. How could IBM alienate the firm which already had achieved the strongest influence with the largest IBM clients and their Data Centers across the country? Regardless, this was the beginning of an IBM downtrend which lasted for many years!

Our multiple relationships with large user organizations such as the Society for Information Management (made up largely of CIOs) helped to tell our customer base of special IBM deals which others were obtaining, which often resulted in such deals becoming general practice. Previously in the 1970s, IBM had been a fixed-price no-deal vendor.

We were present to give IBM’s customers confidence and security when they considered switching to other vendors such as the midrange Digital Equipment Corporation, the plug-compatible manufacturers (PCMs) Amdahl, Hitachi, Fujitsu, Memorex, Telex, Calcomp, and many others. The Japanese copy-cats especially thrived at IBM’s expense. Our Wall Street operation, “Gartner Securities” covered these PCMs, recognized their functions and viability, and documented and/or recommended them as stock market ‘buys’.

Justified by the normal journalists’ (and analysts’) responsibility to combine our knowledge and analysis, we developed a broad relationship with each of IBM’s competitors in every sector. All of them themselves did try to educate and impress us, perhaps improving our forecasting abilities. We were also able to pretty accurately forecast (on our own and with no inside information) IBM’s impending product announcements. This often led to cool its market for soon-to-be-obsolete platforms, though only temporarily.

One day IBM’s Corporate CFO in Armonk searched and found me in Paris; the phone rang and he complained, “Gideon, do you realize what you’ve done to the IBM company’s quarter?”

Our IBM-related conclusions continuing to be in great demand resulted from our formalized (and unique in our industry) “research process”, to be discussed elsewhere. And as IBM continued to be concerned and vigilant itself, it retained a sense of humor. I’m told that at IBM’s Armonk NY corporate HQ, a repeated joke at lunch was, “Have you spoken to Gideon lately?”

But IBM itself had also blundered in the face of both market and internal complexities. Its marketing ploys, overselling by its Data Processing Division sales force, development delays in its plants, and over-reliance on financial officers, together with its high prices and huge market share encouraged the Japanese and other copycats. Finally, it was hurt by its financial decision to sell off a large part of its huge rental base to boost earnings. The sale of IBM’s rental base led to longer term cyclicality compared with its prior financial predictability.

Despite IBM’s clear ‘invincibility’ during the early 1980s, Gartner Group (now called Gartner Inc.) was the first and most explicit documenter of many of its down trends…But after years of downward spiral, our readers know that IBM has had several strong rebounds!

IBM climbed from $10.43 in September 1993, up to $137.38 in June 1999 = 1217% growth in less than 6 years…and although it fell to 58.31 in July of 2002, IBM again has risen, gaining 214% to $183.65 in July of 2011 — 25% above its 1999 peak.

Read Part 1: “Know the Most About a Little”
 
Read Part 2: Trade-Secret Witch Hunt?
 
Read Part 3: Who Ever Sues the Press?
 

Here’s how the drama continued to unfold:

In early March 1993 I was shocked to receive a call followed by a personal visit in my office by two people associated with IBM: Tom Barr and Nicholas Katzenback. Tom Barr was Cravath Swaine & Moore’s most famous lawyer and was handling the entire IBM account. Nicholas Katzenbach is a Rhodes Scholar, former professor at Yale and the U. of Chicago, a former U.S. Attorney General, and now General Counsel for IBM!

Imagine how nervous I felt as Mr. Barr calmly and respectfully told me that copies of Gartner presentation charts were found stapled to IBM “Confidential-Do Not Copy” documents during discovery proceedings in the IBM vs. National Semiconductor Corp. lawsuit! This was one of two major lawsuits which IBM initiated in its efforts to control its Japanese competitors and their U.S. Partners. IBM apparently wished them to “cease and desist” from the design and production of “IBM Compatible” mainframes, since those lower-cost copies which were penetrating IBM’s major revenue source: its huge installed-base of large systems.

After some idle chatter, Tom said that we were not the subject of an investigation or the target of litigation, and “of course” IBM was skeptical that we were necessarily the source of this material. BUT, he asked me respectfully to look into this matter, and within 20 minutes, the two left to return to Armonk, IBM’s corporate HQ. I recall wondering why Mr. Katzenbach had come along; he had hardly said a word.

Wow! As soon as they left I huddled with David Stein my partner, and we instantly and simultaneously concluded what had transpired: The Gartner analyst who led our ILCM service (IBM Large Computer Machines) would more than sometimes entertain our Japanese clients from Fujitsu and Hitachi, the  primary manufacturers of these huge IBM clones, and National Semi was their major semiconductor supplier. One of our conference rooms was near my office and David’s, I recalled I had been casually surprised by the size of each Japanese group, but most important,  I knew that our analyst had a girlfriend who worked at in one of IBM’s major laboratories, in its education department! Q.E.D.?

We immediately walked into our analyst’s office and confronted him with the situation. He did not even attempt to refute our suspicions, and agreed to pack up at once and leave our offices, permanently! I should note that somewhat later we determined that “IBM Confidential” and “Do Not Copy” were the lowest forms of security control within the firm, compared with “IBM Secret”, “IBM Top Secret” (I don’t recall the other security terms), and that the source of the document was an IBM classroom where dozens of these documents were exchanged with few further security controls.

We watched our analyst leave, and of course notified IBM of our finding and the his firing. But still, IBM continued to harass us. We believed we were at the boundary of being sued despite IBM’s initial representations, as we suffered through constant negotiations and cost, with our new major attorneys who had been recommended by our board. Weil Gotshal’s Dick Gruenberger, with the active assistance of his firm’s famous chairman Ira Milstein, who would have to deal with  the extremely tough Tom Barr. I believed we had a strong case that these were not trade secrets  but with no trial we were nevertheless soon forced to a ‘consent settlement’ with IBM, a better result than being sued which would likely have bankrupted us. Yet, we did suffer what I considered a forced punishment, as follows:

We were given a detailed document as to IBM’s version of what it believed should be our rules of behavior which we had to distribute annually to all staff who had to read and sign it! Also, our lawyers Weil Gotshal had to commit to visiting us at the same time annually in order to review,  face to face with all analysts, our various obligations with regard to IBM’s rights.

Third, the major item for me, was IBM’s applying what has been called in the trade a “snitch clause” whereby any offer by any outsider to provide information which might possibly be considered confidential, would have to be reported immediately to IBM counsel. This seemed ridiculous, if not onerous, but that was that. I assumed it was primarily to keep us on our toes.

In retrospect, this legal nightmare had caused us much agony, wasted time which hurt our productivity, and incurred huge legal expenses. In my view it was an unnecessary and vindictive action on IBM’s part, and which it should have known in the long-term might ironically hurt it more than helped!  After all, we were a form of “the press”, which digs for protected content all the time, and who ever sues the press?

Read Part 1: “Know the Most About a Little”
 
Read Part 2: Trade-Secret Witch Hunt?
 
Read Part 4: Have You Spoken to Gideon Lately?
 
 

Several months passed  after having spoken to IBM’s Don Otis I received another critical phone call, this time an indirect call from Ron Rolfe of Cravath Swaine and Moore, IBM’s counsel and the acknowledged heavy hitter of the entire U.S.’s legal profession! So once again the lawyers were getting into the act, always persistent, always a serious development.

Ron and I had crossed paths before, but positively. Now, he confided that the O.A. issue with Dean Witter was about to blow, and that we might end up finding ourselves in the middle of IBM’s overall investigation despite our past, and still constructive relationship. IBM was clearly narrowing the focus of its search for “deep throats” and perhaps we were doing it a disservice by not cooperating more aggressively. He concluded by casually reminding me that after all, as O.A.’s past boss I could be implicated by former association!

Ron then offered the following syllogism:

1. IBM  assumes that we somehow have some squirreled some IBM documents into our files (where was that assumption born, and was IBM assuming we had them, or guessing?)
2. IBM is concerned about the employee privacy issue and does not wish to go on a witch-hunt, but…
3. Document evidence would be of great assistance, thus…
4. The only way for us to put distance between us and O.A. was to cooperate; turn over all IBM documents, and if not, we would be under suspicion!

Nice of him to alert us, he sounded pretty sure of himself, and of course this made me much more nervous. Our lawyer Marty Mushkin, was concerned that some of the material we were disseminating might in fact be be considered ‘trade secrets’ “because there would be an economic advantage to competitors if they had it”. I almost simultaneously learned that Tom Crotty, who ran our Wall Street investment business, inserted himself in the growing crisis by speaking with an IBM senior executive Watts Humphrey! What was that about? Had the witch hunt begun? Where was this all heading?

In those days I naïvely felt that truth was an absolute defense, and while our models were partly fed by the rumor-mill, nothing specific was transmitted to clients. It was just speculation. Despite Rolfe’s visit, the tension soon softened, even as our analyst team (including ex-IBMers like me) watched. Our respect and admiration towards the IBM company began to erode.

I accelerated our need for analysts to document their honestly obtained evidence about IBM, certainly when there was even a hint of their ‘bashing’ the firm. We nevertheless continued to “call a spade a spade,” whenever right. My internal Gartner Inc. problem was that the aftermath of IBM’s threats had resulted in too many of our analysts developing a negative bias towards it. As Gartner was becoming an even stronger name and force in the industry, if our analysis looked biased, that would likely be noticed by our public!
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Read Part 1: “Know the Most About a Little”
 
Read Part 3: Who Ever Sues the Press?
 
Read Part 4: Have You Spoken to Gideon Lately?
 

After leaving Oppenheimer to create, launch and manage Gartner Group in 1979, I continued to personally write and publish about the IBM Corporation — just as I had done previously for my financial buy-side clients (banks, insurance companies, et al.).

Forbes quoted me in 1972: “there is nothing IBM does that fails to impact every aspect of the industry…I prefer to know the most about a little, rather than a little about most”.

Other analysts at Gartner also commented on IBM because it influenced the entire IT space, and more than a few of our clients came to believe that we knew more about this firm than all the other Wall Street analysts put together. Those of us who were ex-IBMers respected it, while understanding that our obligation was to observe and document a neutral view, while inserting subjective comments and suggestions. This actually contributed to our rapidly growing marketplace impact.

This era’s large IBM computer systems dominated, and by socializing with couple of Leasing Company firms, I outlined the parameters of a possibly useful forecasting model. Dave Stein and Michael McFarlane developed it and ran the business in the early 1980s we called RAVIS (RAV=Residual Asset Values), which turned out to be of incremental value to our firm’s early growth. The model developed probabilities of how IBM’s planned program might evolve, including product cycles, possible price cuts, and more. We guessed well, strengthened our credibility, but soon learned that IBM was concerned and was ‘watching’ us. The model provided value for our clients, but as we later learned, it also increased IBM’s neuroses.

My former Oppenheimer (Opco) assistant who I’ll call O.A. had left Opco soon before I did to form his own intelligence operation at Wall Street brokerage firm Dean Witter, and because he was somehow suspected to be directly privy to confidential information from European sources, IBM’s focus on leaks shifted to him. On August 28, 1980, Watts Humphrey from IBM called me to say that Dean Witter (that is, O.A.) had likely broken the law re privileged information, that IBM was not ready to sue, that it would take its lumps, but it would like our support to convince Dean Witter to cease and desist running its “intelligence” (G2) business given the SEC implications.

I did not know anyone at Dean Witter except for O.A., and did not call the firm, never finding out why IBM had not complained directly to that Wall Street brokerage. But within a few days Hank Herrmann, IT analyst at the giant investment firm Waddell & Reed and one of my brightest Wall Street clients when I was at Opco, (and now CEO of that huge firm) called to tell me O.A. was already talking to other Wall Street firms about employment! I wondered why.

On September 20 another IBM executive, Don Otis, called me. He said IBM was watching O.A. “like a hawk”, and we had to watch our step as well! Don also criticized one of our recent client communications “suggesting” certain specifics of IBM’s build plan and its backlog. I didn’t know what Don was talking about, and responded that he must know that leaks from IBM salespeople were rampant, often “shooting their mouths off to IBM’s large accounts”.

I added that we wished to be kept out of all IBM/O.A. matters, we did not want to be sucked into a general Wall Street purge. But I did agree to avoid the Leasing crowd which was disseminating hearsay, to maintain an ethical stance towards all interested parties, and to definitely not compete with O.A.’s “proprietary methods”. (He was reputed to invite knowledgeable IBMers alcohol-rich parties he hosted in Europe!)

Within a week or so I spoke with a contact at National Semiconductor (NSC), Alan Baumgartner, who had a good mix of skills (mostly telecom market research, but was strong on inside dope, as he was a true networker and knew lots of people). Alan had actually once hoped to hire O.A., but he had reversed fields and was now dumping on O.A. despite his having just recently closed an arms-length deal with Alan’s firm:

“O.A. responds to all our requests, is often right-on with his G2, was right on about IBM’s Newport at 3.6 MIPs, new cache memory at 16K, and 4X interleaving [note: such IBM leaks rarely found us!], …and you [e.g. me and my staff] should develop an equivalent source!”

Alan had also found out that Duane, O.A.’s new boss at Dean Witter, “was nervous about him”. He concluded the conversation by indicating that National Semiconductor would likely approve becoming a Gartner client by year-end! Luckily, my O.A. issue dissipated when he left Oppenheimer and he was soon to be pushed out of Dean Witter together with the new CIO clients he had accumulated. We rarely heard about him, let alone from him, again.
 
Read Part 2: Trade-Secret Witch Hunt?
 
Read Part 3: Who Ever Sues the Press?
 
Read Part 4: Have You Spoken to Gideon Lately?
 

Are the days of the traditional industry analyst firms numbered?

I’m copying a public post by Phil Fersht, adding a few minor edits and comments below.  Phil asked the question: “Are the days of the traditional industry analyst firms numbered?” and offered his doubts to the public (in some detail). Perhaps his conclusions were overstated, but perhaps not; some version of today’s Advisories will undoubtedly survive. But the comments seem to support his views (13 of which I edited, and are found below the post; and of course, new readers are welcome to add their comments).

My own attitude is described somewhat on other posts, and I did not tamper with the conclusions.

I’ll first extract parts of Phil’s discussion, in bold and with ‘quote marks’, and then include 13 of the original comments to this post. Of course new ones can be added, and I include a final comment from Phil.

Phil Fersht’s Post:

‘I’ve been both analyst and consultant during my career, and work with many buyers, sellers and intermediaries of both technology products and professional services. I’ve worked with the best and worst analysts on the planet.  I’ve seen great research developed that was truly unbiased and objective, and also – sadly – been witness to some that was, quite frankly, not… seen analysts ride waves and become rock stars, and then lose the plot somewhere along the line… before either exiting… or plodding along on the vendor-briefing circuit… I also know level-headed analysts who quietly go about their job and produce decent stuff… I’ve also worked with egomaniacs who pander to paying clients and scare the living daylights out of anyone who dare criticize them or refuse to buy their services… I’ve also worked with absolute numb-skulls who somehow remain employed, despite knowing very little about anything… and I’ve worked with analysts who really know very little, but somehow persuade the world they are visionary thought-leaders’.

Wow, Phil calls a spade a spade about analyst variability.

‘many analysts are plodding, biased, lose the plot, depend upon vendor briefings, produce  ‘decent’ stuff, are egomaniacal, pandering to those who pay, scaring those who criticize or who don’t pay, are numb-skulls, and know little while parading as thought leaders’.

Phil asks ‘whether there’ll be much of an “industry analyst” business left in another five years ’? And, he says…‘short-term attention-span theater has taken over, and some analyst firms are oblivious’.

He also suggests that much analyst written product goes to waste because ‘very few people have the patience or inclination to read detailed reports any more’. Today, ‘most people are checking email constantly, scanning tweets, Facebook status updates, LinkedIn invitations and contributing to whatever social group or network with which they like to spend time’.

In other words ‘Research needs to be served up in bite-sized chunks to stand any chance of being read’ so the Advisories ‘ force their analysts to meet their report quotas each year’and so forth, providing ‘macro services’ rather than micro.

And Phil thinks that the situation is even worse: ‘there’s too much “research” being produced that’s not telling us anything new’, ‘more executives declaring that today’s traditional research isn’t relevant to them anymore’….‘don’t need some primadonnas in their ivory towers telling them what they already know…’, analysts may be ‘useful sounding boards and (we) occasionally get some competitive intel out of them’, they use ‘the word “cloud”’ at every opportunity.  He says that’s the value clients currently obtain from Advisories, include ‘favorable positions in scatterplot charts and after-dinner awards’.

What the  buyers do want is: ‘learning things that help them do their job better – they like listening to real experts and learning from each other….be a focal point for idea-sharing, knowledge, data and validation of their strategies.’

Needless to say,  other analysts were quick to respond to Phil. For example, Ray Wang said that:

‘The large analyst firms lack rock-star visionaries’…‘in years gone by, there were countless big personalities emanating from the Gartners, Forresters et al, but sadly, that number has dwindled …for financial reasons, and I assume because they were doing well even w/o good research…. Moreover, the last thing they want are clients calling up demanding to talk with Bill, not Ben.  Innovation is bred from people with vision and personality – and the more analysts are “standardized”, the more the personality is drained from the product. Analyst firms need to create new visionaries for clients – and maybe even dust off a few of the old ones knocking around somewhere in the blogosphere.  Hell – the retirement age is 70 now, so let’s bring some of the old egos back!

Here are  other comments from the web, slightly edited re grammar; please excuse any errors in transferring the comments:

1. Jonathan Yarmis Posted June 19, 2011 at 4:41 pm 
   I think you’ve actually missed a few of the things that are rendering Gartner — let’s call them out by name — less and less relevant.
   • Gartner’s core is the IT organization. More and more IT dollars and decisions are coming from end users. Gartner doesn’t know how to talk to them and even if they did, that users want something different: great accountability!  Sound bites are not the answer. Helping me make smarter decisions more quickly is! Know thy business!
   • We used to have too little information. Then, Gartner could be king, as the one place you could go to reliably find an answer. Now we have too much information and Gartner is just another voice in that cacophony. Even worse, it’s a voice that can’t be found by Google. I want someone who can solve my information overload problem, not contribute to it. I could write another 10 pages on this subject. To answer your big question: no, the industry analyst business won’t be dead in 5 years…unless we fail to respond to these new market requirements. The time for market disruption is right. Let’s see who understands and capitalizes on this opportunity.
2. PhilFersht Posted June 19, 2011 at 5:03 pm  
   @jonathan: i wasn’t poking the finger solely at Gartner – and in reality, if the business does crumble, they’ll likely be left re-arranging the deck chairs on the Titanic. I would also add that buying decisions are being made far beyond the IT department as the traditional analysts struggle to relate with non-IT executives even more than they do with IT ones. As IT/business process boundaries blur further, consumers of information will extend even more prolifically to finance, marketing, operations, procurment etc. These execs tend to spend their dollars with consultants when they need help – convincing them to drop $100K on a Gartner subscription is a big question mark! PF
3. Jonathan Yarmis Posted June 19, 2011 at 5:31 pm 
   Phil, we are actually in violent agreement on the point re buying decisions being made way beyond the IT department. Let me be so bold as to say that they won’t spend that kind of money on a Gartner subscription, or anyone’s, without some greater level of accountability. Yes, today they go for consulting, a largely unleveraged and thererfore pricy model. The challenge in my mind is to find that middle ground. Not as leveraged as Gartner but not as costly as consulting. I’ve been chasing that challenge for 14 years now…and I’m still chasing.
4. ferd4 Posted June 19, 2011 at 5:34 pm 
   Will the industry analyst business be dead in five years? I don’t think so, but I agree that firms that don’t keep up with the times will die (as your article states). Actually, I think there will be a resurge in opportunity for industry analysts, because so many businesses have been and are continuing to dump their seasoned expertise in favor of cheaper (and probably off-shored) labor. Already many technical businesses have lost their former core competencies and are run by bean counters who don’t understand how the business produced salable objects – but they  noticed that they’ve drastically lost market share and profits. As they wake up, they’ll want quick answers about how to right their ships. They probably will want that information in short bites of multimedia, but they’ll be happy to pay anybody who is a good presenter. There could be Government incentive programs too. So I wouldn’t worry about your future, as long as you are willing to convert from paper reports and PowerPoint presentations to full multimedia “TV show” presentations
5. Kieran Dempsey Posted June 19, 2011 at 5:48 pm 
   Phil, loved reading this. Jonathan also adds a good point that in the old days there was a lack of quality information in IT. Today it’s everywhere, so how do the Gartners and co. stay ahead of the curve? Clearly, they need to do a better job of being relevant to the changing buying needs and delivering it in smart ways that will get their customer’s attention. Remaining “relevant” is the operative word!
6. KR Posted June 19, 2011 at 6:46 pm 
   Hi Phil, The market is shifting to market makers for advice and influence. The convergence of various market makers will result in the new “analyst” or influencer of the future. It’s happening across the board and the traditional definitions will fall by the way side as new business models emerge. Here’s the original post. At the end of the day, if we meet our clients needs for sound, pragmatic, and objective advice, we can apply this to line of business, IT, or the C-suite.Cheers and great post.
7. Jonny Bentwood Posted June 19, 2011 at 6:46 pm 
   The analyst business will continue to evolve for sure but die off ? – not a chance. Without doubt as purse strings were tightened over the past year, I have seen a smaller number of analysts in the market producing less research. The real challenge though to analysts is the sheer influx of other credible influencers who do not wear an analyst hat and yet provide similar services. The reports themselves that analysts write are little more than PR tools shouting out “if you like this report, then speak to the author and I will tell you the real story”. Fact – nobody buys a IT solution based upon reading a piece of research but they may do so after seeking advisory support. Where does this leave the analyst industry? Simple: compete with influencers and either improve their own firm’s brands (like Gartner and Forrester) or supply well known rock stars who can make their POV heard above the noise of a saturated market where anyone with a blog and a twitter account can claim to be an expert. Analysts need to be cognizant of this change and nurture their USPs of independence and quality output and not get lazy. After all, it is the lazy analysts that have been the root cause of many companies seeking advice from elsewhere.Will the analyst industry be dead in 5 years? No, but this period in time will see a good number of the poorer quality firms and analysts find themselves without sufficient income. Evolution for me is not such a bad thing; from an AR perspective we will focus on the best analysts and the best influencers.
8. Jonathan Yarmis Posted June 19, 2011 at 7:02 pm 
   Jonny raises an interesting question. What is the difference between an analyst (and an analyst firm) as compared with an “influencer”? I would argue that one critical difference is that analysts have a research methodology and process whereas influencers have opinions and insights. If analyst influencers ever lose this rigor, we’ll have lost everything. I’ll concede that many customers don’t necessarily value that process but I would argue that’s the fault of the analysts and not the clients. It’s up to us to create relevance, to show that it produces more reliable insights and judgments. In this sound-bite world, that’s a hard message to deliver. But I’m betting that the pendulum will swing back, and if we’re not prepared to answer the challenge when customers come to realize the value of sound process, that’s unfortunate for all of us, analysts and customers alike.
9. James Posted June 19, 2011 at 7:03 pm 
   Excellent piece – and some insightful comments. Gartner and Forrester will be around in the future if they can evolve their models. I agree with Jonny about the “lazy analyst” issue – those that simply follow the trends and make minimal effort to come up with new thinking are the main cancer to the analyst industry today. I see that as the largest threat to the big two. However it does concern me if we end up with a duopoly situation – does this really incentivize the big two to innovate and stay ahead of the pack? Isn’t that why we have lazy analysts today, and won’t this get worse? The smaller analyst firms  producing lower quality research will die – and likely before another 5 years. They’re increasingly irrelevant and are overshadowed by newer market influencers. Simply producing vendor-related marketing will not keep them in business.
10. Andrew Wagoner Posted June 19, 2011 at 7:21 pm 
    As IT increasingly becomes a commodity, it’s harder and harder for analysts to stay ahead of the curve. The new innovations are happening in social media, mobility, cloud computing and globalization/outsourcing. I don’t see any of the traditional analysts taking the lead in any of those areas – it’s the new influencers / bloggers / smaller analyst firms at the helm. It’s a struggle for the traditional firms and we may be left with a smaller number still in business five years from now (and with more consolidation).
11. GW Posted June 19, 2011 at 8:06 pm 
    Why does Gartner have to change? Most IT departments don’t know where else to go, and vendors keep feeding the beast. It’s the rest who should be worried – if they can’t embrace new media and hire top analysts who can lead insight and research, they will be gone in five years.
12. Ajay Posted June 19, 2011 at 9:42 pm  
    They’re too large and bureaucratic to change with the times. The day of new influencers is coming and we’ll see most of the old-style analyst firms slip away in time. But Gartner will never die and IDC will continue to churn out data; the rest are going to struggle.
13. Tony Posted June 19, 2011 at 10:20 pm 
    When I was a buyer, most analyst reports were read by IT, but decisions were business driven so they were also read by middle mgmt (directors and managers). Some of the material was good, but less than 25% was usable. Analysts were almost always helpful on the phone. Senior management and business-side buyers hired consultants to answer their questions. Again, some of the material was good; 80% was useful, but half of that was regurgitation of client thought or to  supplement employees. Hiring better staff would eliminate that half.  All of this was expensive. The gap is the analyst model for business owners. Leaders don’t need advice from someone who hasn’t walked in their shoes. They save their investments for rainmakers, and deliver services and research with far less costly and less capable resources, and they then dilute their brand. Great: everyone is well paid. But the clients need to be served better. And I don’t think the dominant players do that yet. At least not consistently. TF

Phil Fersht: The view among many – and I’m sure many people will get upset with me for calling it how it is, while others will just say, “tell me something new, Phil”. I chose research and analysis as my chosen profession and believe passionately in the value that good expertise, broad thinking and data-driven guidance can bring.My firm, HfS, couldn’t survive alone merely peddling research reports – we have to deliver products, data and networking opportunities our clients need, to help them do their jobs better.  Research has to be about bringing together the voices shaping industry, providing real data to help guide decision-making, and also forcing people to stop, think, and take notice. At the end of the day, research is discretionary spend – we’ll have another recession one of these days and we’ll have further secular changes to industries, like the last one.  Just look at what happened to the worlds of media and journalism.  I fear that the analyst business could fall victim, if the 13 Comments which seem to be in cahoots, are realistic.