There is a saying that dealing with industry analysts is like herding cats. The truth is that it’s said by both their managers and the client community (vendors, AR, PR). I’ve worked at two of the largest and most well-known industry analyst firms in the technology industry since 2005, but it was only after I attended an Institute of Industry Analyst Relations (IIAR) gathering that the real disconnect between the two “sides” was revealed. Therefore, in this post I hope to illuminate how analysts work and how the AR/PR/vendor side can better work with analysts in the future.
The Life of an Analyst
I’ve been an analyst since 2005 when I joined Gartner, and I love it! Since then, I’ve also worked at IDC as well. These are two of the biggest and most well-known and respected market intelligence firms in the technology industry. As an analyst, I have the opportunity to learn something new every day, utilize a diverse skill set (research, writing, presenting, advising, and consulting, etc), and perhaps influence the industry. To be sure, it’s a great gig! But, it also has some challenges, too.
We are entrusted with information under NDA, must be unbiased, and tell hard-truths to market participants. We must backup our guidance and advice with data, while providing insight on topics and challenges that are often difficult to quantify. Sometimes, analysts are consulted in the hope that our advice will validate decisions that vendors have already made. When they don’t, it’s equally frustrating for both parties. In any case, it’s a delicate relationship fraught with potential misunderstandings and a necessity for trust.
The unique nature of the analyst/vendor relationship is best illustrated by the need for an ombudsman to act as referee in some instances in which a vendor is not pleased with how they’ve been portrayed in a research document. These calls in which analyst/authors and the vendor representatives are in attendance can be quite heated “discussions.” An explanation of the criteria and methodology used by the analysts are juxtaposed to the fact that a vendor’s employee bonuses are often tied to the outcome of said research. Days in which ombudsman calls are necessary are the counterpoint to my more enjoyable days as an analyst but nonetheless, illustrate the differing goals of each “side.”
Different Goals of Analysts and Vendors/AR/PR
Analysts are tasked with researching, analyzing, and providing actionable advice on particular topics/segments of the industry using their industry knowledge, experience, and data to define and assess the industry, its trends, and participants as accurately as possible, irrespective of bias and influence. Vendors and PR/AR firms are tasked with getting positive press and mentions in well-respected publications and by those industry market research firms wielding particular influence and sway in the marketplace. Sometimes the results coincide, but the analyst’s research and data must first prove-it-out.
Analyst Backgrounds
I have had the privilege and pleasure to work with some of the most intelligent individuals in the industry analyst community. We often bring with us diverse experience, university degrees, and credentials, which enable us to identify trends and offer actionable advice and recommendations from seemingly disparate data sources. Some analysts have a technical background, while others come from the business-side of the equation. Regardless of background, some analysts have a particular affinity for writing highly-technical documents, which focus on features and functionality, whereas others prefer to focus more heavily on overarching industry themes. In my opinion, the best analysts are able to combine both of these components to the benefit of the vendor client. I highlight this element so that a vendor’s interaction with analysts is a more meaningful use of time and focus for both parties.
Analyst Agenda Planning
Every year analyst firms go through an agenda-setting cycle. Some firms dictate very specific criteria for analysts to follow (number, length, and type of document, date of anticipated publication, quantitative vs. qualitative focus, etc), while other firms believe that a more fluid approach to document publication lends itself better to the creation of thought-provoking research. In both cases, the analyst typically provides an outline of his/her intended document production schedule and topics for the year, while hopefully, allowing some modicum of flexibility in accommodating custom research requests and other unforeseen deliverables, such as presentations, etc., in a timely manner.
Therefore, it’s important for vendors/AR/PR to gain insight into analysts’ proposed research agenda in advance so as to not only better position themselves for inclusion in the reports, but to also potentially influence the topics the analyst might submit as agenda proposals. Fyi…unless a vendor is willing to commission in advance a particular report that they can then get re-print rights for on their website, a better approach might be to encourage an analyst to write a more generic report on a particular industry topic in which a vendor does business (think cloud, Big Data, IoT, etc). In this way, the vendor can then get re-print rights to the report without having sponsored it in the first place. Some end-user readers might be more suspect as to the validity/credibility of a commissioned report rather than one independently published by an analyst, although both have their merits.
Data Sources
A lot of data (especially for quantitative market products, such as quarterly statistics and market rankings) is provided by the vendors themselves (although, some vendors provide more data than others). However, in most cases, vendors provide most (if not all) of the data requested from analyst firms for inclusion in these quarterly products and are thus, a very accurate representation of current market conditions from which the data is drawn. Since it’s a “closed universe,” it’s important that end-users understand that the quarterly statics provided offer a very narrow focus on that particular segment (think storage, server, or networking in isolation from the rest of the vendors’ offerings). This is an important consideration, since sales in one segment may have been facilitated by the fact that a particular vendor offers end-to-end technology solutions, for example.
Whether the report or quarterly market statistics are new offerings, established products, or one-offs, relevant vendors will be included in the report, regardless of their cooperation and data input. It has been my experience that if a vendor is not doing particularly well in a specific segment of the industry, they do not wish to participate in the data collection phase of the research process. Apparently, they believe that if they provide no information the analyst will simply leave them out of the intended research. However, this is not the case. In fact, it would be a glaring omission to leave a vendor out of a research document covering a technology segment in which they play and would ultimately raise more questions about the vendor than if they had merely participated in the first place. Therefore, a vendor has little room to complain if there are inaccuracies specific to that vendor or in comparison to their competition, since they refused to participate.
So, vendors should be under no illusion: non-participation only serves to hurt the vendor, since they’ll be included in the document nonetheless. At least by participating in the process a vendor has the opportunity to actually speak with the analyst/author of the report and attempt to frame the discussion to the best advantage of the vendor itself. Afterall, a vendor’s silence can speak louder than words…and do you really want someone else putting words in your mouth?
Data is also obtained via surveys. These are usually conducted annually and often focus on a particular segment, depending on which department of the market intelligence firm is funding the survey or if it’s funded by vendors themselves. Some surveys are also conducted in real-time (during an analyst presentation, for example). These types of surveys sometimes offer interesting results, which might influence an analyst’s future research direction. In either case, vendors would be wise to consistently interact with analysts via vendor briefings, etc, in order to not only present their firms in the best possible light, but to take the opportunity to influence an analyst’s future research and to possibly contribute to the inclusion of certain questions you’d like asked on upcoming surveys.
Regardless of the data source (primary vs. secondary), a lot more data is collected behind-the scenes than ever sees the light-of-day in print. On the one hand, this seems like a terrible waste. On the other hand, it provides a rich foundation upon which an analyst bases his/her advice and recommendations.
Analyst Ecosystem and Structure
Change in any organization can be glacially slow but in the technology field, it can be deadly. Analyst firms used to operate in silos (some still do). However, this is not how technology has evolved. Analysts track the trends and have advised vendor clients to break-down the silos in their organizations, while oftentimes still clinging to old organizational models themselves. Fortunately, this is changing…for both vendors and market intelligence firms. The former segmentations may have made sense at the time, but evolving technology “solutions” have increasingly made that structure artificial and irrelevant in today’s market.
Today it’s no longer a matter of storage, servers, and networking, for example. Instead, it’s about cloud, Big Data, and IoT (all of which contain elements of storage, servers, and networking, among many other segments). It’s also important to cover political and economic events worldwide, because they can have a significant impact on the technology industry as a whole, as well as how a company goes-to-market. This is especially true when a company looks to expand its business in particular countries. Therefore, in my opinion, greater focus and an integration of these factors should be incorporated in future research in order to provide a more holistic view of the industry, as well as a more accurate one.
Recommendations to Influence Research Directions
Vendors should periodically participate in vendor briefings with analysts. Don’t wait for new product announcements, and try to include a broader spectrum of analysts so as to give an overall general update on the whole company, not merely a segment of it (such as only storage, servers, networking, etc). In this way, the analyst/vendor interactions aren’t merely event-driven but instead, intended to provide a more holistic view of the company (which is how end-users often purchase their technology solutions anyway).
Learn the agenda-setting schedules so that you have the best chance to influence the direction of the research in advance of any submission deadlines, etc.
Participate in data gathering, when requested, since you’ll be included in the report anyway. It’s better to provide accurate data for your company, rather than the analyst having to “guess”or “estimate” the information. It also serves to help frame the discussion in such a way that helps to soften the blow of less-than-spectacular performance or gives the analyst insight into how your company plans to proceed in the future and improve results (i.e. – there’s only an upside to vendor participation).
Reader Input and Comment
If you’ve read this far, I hope you’ll be invested enough to provide feedback and comment on not only what’s contained in this particular blog post, but on how analysts and vendors/AR/PR can better communicate with each other. What needs to change in the analyst industry?
