Is a new breed of analyst finally arriving to disrupt the legacy model?

Firms like HfS Research, Constellation and GigaOm have built their brands very quickly, in just a few years, and are now more visible than more established firms.

–Duncan Chapple, Influencer Relations, June, 2014

As if by some freak of nature, the very next day after we stirred the pot questioning whether analysts needed regulating (or self-regulating), the industry’s leading analyst/influencer observer, the venerable Duncan Chapple of Influencer Relations and Kea Company fame, penned a blog that clearly demonstrates the sands are shifting in the analyst world when it comes to wielding influence over enterprise buying decisions:

Click to Enlarge

Several analyst boutiques are out-influencing their much larger competitors

As these results reveal from Analyst Equity and Kea’s recent Analyst Value Survey of several hundred research consumers, Chapple states that “Firms like HfS Research, Constellation and GigaOm have built their brands very quickly, in just a few years, and are now more visible than more established firms. A great example of this is shown by the Net Influence Score from our survey, shown above.”

The Net Influence Score shows, for each firm, the net percentage of the respondents mentioning a firm as having rising or falling influence. This chart shows the percentages for the firms about which the most respondents had an opinion. Chapple continues, “Newer firms like HfS and GigaOm are coming from a lower base of awareness: that makes it all the more remarkable that HfS was not only one of the two firms which the most people commented on (alongside Gartner) but also had the highest Net Influence Score. GigaOm and Constellation’s scores were almost as high, but far fewer people commented on them. This also reflects HfS’s successful 50:50 income split between vendors and end-user clients, developed through compelling offers like its Sourcing Executive Council.”

Does this mean the analyst industry is going to change overnight?

I believe it is unlikely that we’ll see many new behaviors coming from the incumbents as a result of the gaining traction made by several of these upstarts. While Forrester seems to be making some more dramatic recent moves by replacing several traditional analysts with consultants to sell more strategic/consultative product to clients, the established “big two” of Gartner and IDC are persisting with the same firewalled model and approach that has served them so well for decades. And why change their successful models until they have to?  Surely they are entitled to feel immune to disruption and innovation from nimble competitors… they are, after all, comprised of analysts who cover innovation and disruption for a living.

However, what is changing is the emergence of boutiques, often with much deeper specialization, more open collaborative models and a more engaging, personable approach to working with clients. What is also happening is the capability of small firms to influence and make a damn big noise to industry – often bigger than the incumbents.  Analyst firms which are steeped in social media and “born in the cloud” are simply more nimble, less costly to operate, and much easier to engage with in an open and collaborative model. They are also not steeped in legacy business practices and bloated bureaucracy that is highly resistant to change.

Duncan Chapple is MD for Kea Group's Influencer Relations Practice (Click for Bio)

Whether these boutiques will ever grow to be the size of Gartner is highly unlikely (those days are over), but it’s clear that the legacy model is being slowly eroded – and – as so many people pointed out in my recent blog-rant, regulation shouldn’t be necessary as many industries a way of evolving and disrupting themselves.  Personally, I would like to see the analyst industry impose upon itself some form of self-regulation, but I do not believe we will have many willing accomplices who would join us on said mission.

The Bottom-line:  Change is coming – and not everyone will be ready for it

Net-net, just look at how social media and the open information market have disrupted other content-based industries such as PR, media, advertising, publishing and education… surely it’s now only a matter of time until the analysts and consultants get turned on their heads with the nimble, engaging disruptors coming along to change the model forever… there’s a whiff of change in the air and it maybe coming sooner than many of us realize.

You can read more insight on this topic at Duncan Chapple’s new blog post entitled “Mid-sized analyst upstarts are creating value faster“.

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13 Comments

  1. Eric
    Posted June 5, 2014 at 6:12 am | Permalink

    Wow – this really shows how smaller can be more impactful in today’s market!

  2. Gaurav
    Posted June 5, 2014 at 7:20 am | Permalink

    Phil,

    You must be very proud. Duncan Chapple is highly respected as an analyst observer and this survey really shows how the industry is changing. Congratulations!

    Gaurav

  3. Chris Butterworth
    Posted June 5, 2014 at 8:06 am | Permalink

    Many congratulations to HFS. An outstanding performance,

    Chris Butterworth

  4. Justine Small
    Posted June 5, 2014 at 8:11 am | Permalink

    Am not surprised to see the smaller analysts starting to have a real impact. This is what happens when the incumbents in a market stand still,

    Justine

  5. Larry
    Posted June 5, 2014 at 8:26 am | Permalink

    Phil – kudos to you and your team. You’ve been a sustained breath of fresh air for the outsourcing industry,

    Larry

  6. Tarry Singh
    Posted June 5, 2014 at 8:35 am | Permalink

    It’s refreshing to see what Phil and his team writes and the researches they conduct. Wish there were more of these kinds in the industry.

  7. Mike
    Posted June 5, 2014 at 9:13 am | Permalink

    Good to see 451 doing well – they’ve been producing some great quality research and becoming established as a genuine top tier player.

    Great blog – keep it up Phil and team!

  8. Alan Walsh
    Posted June 5, 2014 at 10:34 am | Permalink

    Phil – many congratulations to you and your team – you must very proud.

    Question for you – the Gartner data seems very split – the same number sees them rising as falling. Why do you think this is?

    Alan Walsh

  9. Posted June 5, 2014 at 11:24 am | Permalink

    Thanks for the mention Phil. The colours in my chart have flipped around a bit: you can see the original version at http://www.influencerrelations.com/2691

    Alan, there are just very different perceptions of Gartner in the market (and some wishful thinking). There’s some more data on that at http://www.influencerrelations.com/2487 as well as http://www.influencerrelations.com/2511

  10. Seamus Walsh
    Posted June 5, 2014 at 12:12 pm | Permalink

    It looks like the big firms aren’t too big to fail, that is good news for everyone.

  11. Pooja Mittal
    Posted June 5, 2014 at 12:36 pm | Permalink

    Phil,

    Change is the only constant :) congrats to you and your team. much needed disruption !

    Pooja

  12. Gabriel Gheor
    Posted June 5, 2014 at 1:21 pm | Permalink

    I wonder how new generations of research consumers will impact the analyst world… after all, analysts need to adapt to the demand, which may change radically in the near future,

    Gabriel Gheor

  13. Posted June 6, 2014 at 12:47 am | Permalink

    congratulation Phil Fersht .

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