Saturday, January 20, 2007
Response to Industry Analyst Alex Fletcher...
Alex Fletcher left a comment in my blog that I figured deserved a public response...
Alex, asked the below question:
I think I have several ideas in this regard. First, many enterprises who have the services of large analyst firms are probably deep enough in terms of wanting to gain additional insight into yet another set of vendors and their offerings. The value proposition of analysis has to be different than us enterprisey folks practicing productecture.
One thought that happens in the real world is the simple nature of human beings and them wanting to compare themselves to the others. We all know about the Jones and how the grass is greener on the other side. I know my boss would for example love to know how our enterprise architecture practices compare to those in our vertical, to those in our neighborhood who could be in other industry verticals and so on. As you can probably assume, IT executives would spend lots of money to purchase research that makes them look good relative to their industry peers especially at annual review time.
My second thought says that small industry analyst firms need to increase their visibility to the demographic they target and pretty much all of them have gotten this wrong. My employer in terms of its media relations policy, is pretty helpful towards allowing analysts to gain insight into our environment. The issue though is when you are talking to us in this context, we don't expect to be pitched as the internal demographic is all wrong. If we are the subject of research, the issue becomes analogous from our seats that you would be the equivalent of New York Times, Wall Street Journal or InformationWeek. The pitch should come in situations where we are attempting to be consumers and not when we are attempting to share.
Minimally though, small analyst firms should also acknowledge that you really shouldn't bother attempting the pitch over the phone. While we understand you are small, we still won't pull the trigger and cut a check for something relatively significant in terms of price when we haven't even met face to face. Consider the fact that large analyst firms hold conferences. Just because you are small, doesn't mean that this cannot happen. Likewise, pay attention to models such as those used by Gartner in this regard where they have a Mid-Sized Enterprise Summit where attendees aren't required to pay a fee and all the expenses are underwritten by software vendors. What would happen if ZapThink, Redmonk, Elemental Links, Nemertes, CBDI Forum, Macehiter Ward-Dutton, CMS Watch and so on where to collectively figure out how to put on a conference?
I guess I am saying that small guys have to figure out how to work together and form partnerships with each other. Within your research, you will uncover insight for us in Web Services that outlines how Microsoft and IBM who otherwise compete can come together and create standards and have figured out how others do it but yet haven't figured it out for your own business model. Analyst firms can retain their unique value proposition while also figuring out ways to partner with each other.
In terms of other coverage areas if you find it too difficult to do anything other than the usual pattern of extracting monies from vendors then I would find opportunities to do so in demographics that are of importance to us that are not covered by the big guys. Ask yourself this question? Do you believe that my employer spends more monies on operating systems and J2EE containers or more monies on enterprise applications related to our industry vertical such as policy administration, deritivate securities hedging and so on? Intuitively you would have probably figured out that we spend on order of magnitudes more on stuff that is specific to our vertical than on stuff that is generally available commoditiy software. Do you think we would buy insight into helping us make better decisions on spaces where we spend more money?
Another thought may be to consider providing more depth on certain topics. Since you are in the open source space, let me provide some examples. Consider from our seats we have heard that open source will allow us to mitigate against a vendor going out of business because it can be sustained by the community. Let's say that we are also interested in a wonderful ECM product by the folks over at Alfresco. Would we gain insight if we had a deeper understanding not of the financials of Alfresco and the features of the product but instead understood what are all of the other avenues in which we could get credible support? For Alfresco, I know that other Fortune enterprises are contributing to the source code but if this were more public, would I be less hesitant on going open? Consider the fact that we tend to make our decisions based on ROI, would Alfresco be a great candidate where I may be able to afford the opportunity to take two full-time employees and dedicate them to the community and support myself while also giving back?
Consider the situation where an enterprise loves to buy products but still spends a lot of money on integration. Likewise enterprises are also faced with rising expenses related to compliance with various legal and regulatory acts. Consider a previous blog entry entitled: ECM and Security where the discussion around how two different concerns could be unified emerged. Could you help us understand how to close gaps across silos? You are probably aware that if I were to have this conversation with any ECM vendor I would get a cordial response indicating how thoughtful my ideas were but likewise would be immediately followed up something that sounds like, I haven't heard any of our other customers articulate that need. Reality says that sometimes the problam may be that us enterprisey folks don't use a consistent vocabulary across each other while at other times we may know only the problem but not the solution. Either way, we have no way of understanding whether the vendor is sincere in their response or simply bullshitting us.
Wouldn't it be wonderful if an industry analyst could own such problems for us. After all, we would like for vendors to do stuff that meets our needs but yet we really don't want to spend a lot of time thinking on the details. Consider the situation where I want to close security holes in ECM and I took it to the Liberty Alliance where they charged me say $50K. While I would have the privelege of interacting with the likes of Conor Cahill, he may not have the same priorities as me. Likewise, if I could spend the same $50K and the analyst firm would go out and find all the folks that do care about the same problems I face and unified us and then presented it to a vendor, which one would first require less effort on my part and second which one is a better predictor of success from my seats? Less effort and more success are one in the same if analysts participate in other than distilling and echoing conversations from software vendors. We need real research...
| | View blog reactionsAlex, asked the below question:
- James, What do you think is a good starting point for smaller analyst firms to begin opening the dialogue with larger Fortune XYZ enterprises about the type of research/insight in which they are most interested?
I think I have several ideas in this regard. First, many enterprises who have the services of large analyst firms are probably deep enough in terms of wanting to gain additional insight into yet another set of vendors and their offerings. The value proposition of analysis has to be different than us enterprisey folks practicing productecture.
One thought that happens in the real world is the simple nature of human beings and them wanting to compare themselves to the others. We all know about the Jones and how the grass is greener on the other side. I know my boss would for example love to know how our enterprise architecture practices compare to those in our vertical, to those in our neighborhood who could be in other industry verticals and so on. As you can probably assume, IT executives would spend lots of money to purchase research that makes them look good relative to their industry peers especially at annual review time.
My second thought says that small industry analyst firms need to increase their visibility to the demographic they target and pretty much all of them have gotten this wrong. My employer in terms of its media relations policy, is pretty helpful towards allowing analysts to gain insight into our environment. The issue though is when you are talking to us in this context, we don't expect to be pitched as the internal demographic is all wrong. If we are the subject of research, the issue becomes analogous from our seats that you would be the equivalent of New York Times, Wall Street Journal or InformationWeek. The pitch should come in situations where we are attempting to be consumers and not when we are attempting to share.
Minimally though, small analyst firms should also acknowledge that you really shouldn't bother attempting the pitch over the phone. While we understand you are small, we still won't pull the trigger and cut a check for something relatively significant in terms of price when we haven't even met face to face. Consider the fact that large analyst firms hold conferences. Just because you are small, doesn't mean that this cannot happen. Likewise, pay attention to models such as those used by Gartner in this regard where they have a Mid-Sized Enterprise Summit where attendees aren't required to pay a fee and all the expenses are underwritten by software vendors. What would happen if ZapThink, Redmonk, Elemental Links, Nemertes, CBDI Forum, Macehiter Ward-Dutton, CMS Watch and so on where to collectively figure out how to put on a conference?
I guess I am saying that small guys have to figure out how to work together and form partnerships with each other. Within your research, you will uncover insight for us in Web Services that outlines how Microsoft and IBM who otherwise compete can come together and create standards and have figured out how others do it but yet haven't figured it out for your own business model. Analyst firms can retain their unique value proposition while also figuring out ways to partner with each other.
In terms of other coverage areas if you find it too difficult to do anything other than the usual pattern of extracting monies from vendors then I would find opportunities to do so in demographics that are of importance to us that are not covered by the big guys. Ask yourself this question? Do you believe that my employer spends more monies on operating systems and J2EE containers or more monies on enterprise applications related to our industry vertical such as policy administration, deritivate securities hedging and so on? Intuitively you would have probably figured out that we spend on order of magnitudes more on stuff that is specific to our vertical than on stuff that is generally available commoditiy software. Do you think we would buy insight into helping us make better decisions on spaces where we spend more money?
Another thought may be to consider providing more depth on certain topics. Since you are in the open source space, let me provide some examples. Consider from our seats we have heard that open source will allow us to mitigate against a vendor going out of business because it can be sustained by the community. Let's say that we are also interested in a wonderful ECM product by the folks over at Alfresco. Would we gain insight if we had a deeper understanding not of the financials of Alfresco and the features of the product but instead understood what are all of the other avenues in which we could get credible support? For Alfresco, I know that other Fortune enterprises are contributing to the source code but if this were more public, would I be less hesitant on going open? Consider the fact that we tend to make our decisions based on ROI, would Alfresco be a great candidate where I may be able to afford the opportunity to take two full-time employees and dedicate them to the community and support myself while also giving back?
Consider the situation where an enterprise loves to buy products but still spends a lot of money on integration. Likewise enterprises are also faced with rising expenses related to compliance with various legal and regulatory acts. Consider a previous blog entry entitled: ECM and Security where the discussion around how two different concerns could be unified emerged. Could you help us understand how to close gaps across silos? You are probably aware that if I were to have this conversation with any ECM vendor I would get a cordial response indicating how thoughtful my ideas were but likewise would be immediately followed up something that sounds like, I haven't heard any of our other customers articulate that need. Reality says that sometimes the problam may be that us enterprisey folks don't use a consistent vocabulary across each other while at other times we may know only the problem but not the solution. Either way, we have no way of understanding whether the vendor is sincere in their response or simply bullshitting us.
Wouldn't it be wonderful if an industry analyst could own such problems for us. After all, we would like for vendors to do stuff that meets our needs but yet we really don't want to spend a lot of time thinking on the details. Consider the situation where I want to close security holes in ECM and I took it to the Liberty Alliance where they charged me say $50K. While I would have the privelege of interacting with the likes of Conor Cahill, he may not have the same priorities as me. Likewise, if I could spend the same $50K and the analyst firm would go out and find all the folks that do care about the same problems I face and unified us and then presented it to a vendor, which one would first require less effort on my part and second which one is a better predictor of success from my seats? Less effort and more success are one in the same if analysts participate in other than distilling and echoing conversations from software vendors. We need real research...
