Authors: Phil Fersht and Ray Wang: Industry Analysts who still give a sh*t
(This is a collaboration and represents our individual points of view and not necessarily our employers. Oh wait, that’s us…. moving on…)
We called it three years’ ago and we can now officially proclaim that the industry once known as “research” is close to meeting its maker.
Okay, the reality is it’s rare these days for analysts to comb for obscure facts, ask the hard questions, reach out to customers, dig deep with the system integrators, and circumvent corporate communication teams by going direct to employees for the inside scoop.
In fact, the alarming observation of analysts, especially in the large firms, is that most of them are spending all their time on evaluation matrices (e.g. MQs, Waves, Marketscapes, etc.). There seems to be precious little (or any) research coming out of these places anymore. Where are the big ideas? Where’s the insight? Where’s the thought leadership? What do these people stand for anymore?
When we sat down to talk to our client base, our analysts, and our clients, we determined that there were eight common reasons, namely:
1. Legacy business models are built on scare-to-play. The only way the legacy firms are making money is through selling reprints of vendor positionings. Sales folks tell vendors that if they don’t pay for briefing hours and advisory time, analysts will ignore them.
2. Tele analyst approach reinforces an ivory tower image. Today’s legacy analysts have no other means of getting data. Sadly, most rarely ever talk to buyers of services or users of technology. The situation is so bad, that many vendors are forced to provide 15 to 50 customer references because the analyst has no means to reach out to real customers.
3. Stone soup research model reflects the laziness of analyst firm methodologies. They are essentially having the vendors do their “research” for them. Another way to look at this, legacy analyst firms are strong-arming vendors into providing references as their primary method of reaching out to customers. Some analysts today are demanding three hour briefings with vendors to educate them – they are essentially making vendors pay to give them the knowledge they need to appear smart.
4. Egotistical narcissism drives power trips in evaluations. Legacy analysts love the attention of vendors pandering to their demands. In one case, a legacy analyst asked for 35 client references for a scatterplot chart. Vendors humored him just to play along.
5. Information often confused as insight. Many legacy analysts have precious little fresh insight of their own. Often legacy analysts operate on limited data and base “facts” from old surveys run at the corporate level. The result – dated insight not grounded with the reality of the buyer’s point of view. In fact, many have become so enslaved to the vendor evaluation model and have forgotten that they really are an analyst who’s supposed to provide insight to the world – not simply regurgitate vendor-fed marketing hype.
6. Limited practical experience hampered by siloed’ coverage areas. The legacy analysts firms create specialists blinded by the big picture and intensely focused on the hyper specific. Clients often express frustration in having to schedule conversations with multiple analysts who often can not match experience with context.
7. Lowered expectations reinforce lowered standards. Let’s face it, the legacy analyst firms have lost touch with their clients when it comes to research. Clients aren’t expecting insight anymore, and most the analysts just aren’t producing it.
8. Failure of research firms to bring in visionary leaders. Most of the traditional analyst firms prefer to have 20 year veterans as their lead visionaries to the market, many of whom have never worked in the real world and refrain from hiring dynamic analysts who can outshine them. Many refrain from talking to clients, speaking at conferences as they have lost touch with their customers – and are not incentivized to inspire – simply keep their money machine cranking along. They have become slaves to their internal politics and P&Ls, as opposed to shaping new ideas and insights to delight their markets.
The Digital Chasm Among Analyst Firms Is Growing
Buyers must seriously ask if legacy analyst firms are still analyst firms or are they merely advertising agencies for vendors smart enough to play their game? With the dearth of enterprise journalists and media, has the analyst become the new media for the enterprise market?
Gartner’s model is smart. It continues to create more categories to include more vendors with the goal of monopolizing a vendor’s resources and time. Many vendors now have multiple FTE’s dedicated to just Gartner’s evaluations. This model crowds out other independent voices and puts pressure on the other legacy analyst firms. Those dedicated to the analyst relations function have little time to see a different point of view.
We believe that should this continue, there may not be a research industry left in 2 years’ time. We believe that this model of racking and stacking vendors will no longer be sustainable.
The Bottom line: The only way to resurrect research is to bring back talent – and motivate it
We can talk about new business models for hours, but the one missing ingredient in today’s fading research business is the lack of passionate people who want to know everything about their area, who are talking to the people who buy and sell technology and services… who care about what they represent and articulating what they think and do.
Where are those people? Are they hiding, did they retire, or did they just give up? Or did they just figure out how to check the boxes as analysts and give up caring about their careers?
Without passionate talent, we’re doomed and research can – and will soon – be put to bed as a distant memory that once was. Maybe a couple of smart individuals will save this industry, but it needs some serious saving…