deal architect

Gartner-AMR – tipping the scales even more

Gartner is acquiring AMR. Congratulations to my friends there including Tony and Bruce. Tony has always been a gentleman, Bruce a worthy ambassador for the entire analyst community.

But…

…what in the heck is Gartner doing buying a primarily vendor revenue driven firm? Its own vendor side revenues have steadily grown over the last decade.

Why does that matter? Ever been to an industry event where it was primarily vendors? Oh, it’s a good time, but you get that empty, one-sided POV.

From past conversations on this blog and elsewhere in industry, Gartner’s position will be the balance is just fine. After all, this adds less than 5% to our revenue. 

Problem is it was already past the tipping point – and this tips the scale even more.

But hey, it’s their money. I mean it was their money …

Gartner lawsuit – Putting it on a pedestal

So, Gartner is getting sued over its Magic Quadrant.  The complaint says

Defendant’s wrongful conduct has had, and continues to have, the effect of destroying competition in the enterprise market for archiving. …

..In addition, Defendant’s conduct has harmed, and continues to harm, the creative forces of American innovation, and, consequently, the long-term competitiveness of the American economy.

Frankly, that’s putting them on a pedestal. And timed for week of ITxpo will make for plenty of conversation in Orlando and in Twitterland

But as I wrote here, there are a thousand points of influence these days and Gartner (and other analyst firms) represent only a few of those points - - more so at the “top of the sales funnel” than in the due diligence or negotiation stages in a technology procurement.

This report in TechTarget confirms that sentiment

“End users aren't as frustrated by Gartner's research, but said they use the Magic Quadrant report sparingly, usually during early research in vendor selection. Several IT professionals said they took the findings with a grain of salt and assume that top-ranked vendors were also Gartner clients.

Still, many said they had to take the rankings into consideration, if only to appease C-level executives in their own companies who track the findings. Top-ranked vendors typically publicize their rankings within the media and for customers.

How much impact does Magic Quadrant PR? Not much, several IT pros said. "I would say [the Magic Quadrant] has about a 20% influence on the overall vendor decision," said one former IT executive at a New York publishing company. It is "certainly not a deal maker or breaker."

As far as creative forces of innovation, I have had no problems cataloging over 1,500 instances over last 4 years on my New Florence innovation blog – less than .1% have been identified in a Gartner report.

“My integrity as an analyst”

My former colleague Tom Bittman blogs

“As an analyst at Gartner, I can’t describe how angry I get when I read bloggers spouting as “fact” their opinion that I and my teammates have no integrity. That we can be “bought.” “

I responded – below are some of my comments

Tom, like I said the issue is not as much with individual analysts. It is at the firm level.

So let me reiterate a few points I think would help Gartner’s independence image

Show how much revenue from vendors, the top 5, 10,.25. Many companies do that in their 10-K. I mean we live in a world of transparency, SaaS trust sites with SLAs for all to see etc why will Gartner not show how much IBM, HP, Oracle etc pay and how that does not influence what you as analyst say about IBM, HP, Oracle? No body can be as pure as Consumer Reports which does not take a dime from companies whose products it tests, but transparency would go a long way.

Gartner has rules around how vendors can use your published research. But there appears to be few rules around what your consulting, metrics etc groups issue and how that is marketed by vendors. I have seen at multiple clients where vendors attribute dated metrics to Gartner and then argue that is the market benchmark. That shades your credibility when compared against emerging cloud or other disruptive economics. You have ways to enforce vendor usage policies. When you don’t it looks like you are on their side.

On Magic Quadrant’s perception is reality. Go look at the 40 to 50 MQs you issue and see how few smaller, innovative vendors show up on top right. you have the data points – but with so many markets going through rapid change it rewards established vendors far longer than it should because they are more “viable” . Time to question the MQ methodology I would say.

I have been in your shoes, and know how hard analysts try to stay objective, but at the firm level Gartner looks like a mouthpiece for larger vendors. pro-status quo etc. You need to keep doing your solid work, but the firm could do many many things to help recreate the “voice of the market” image of yesteryear. Without that you will be tempted to shoot the messengers – bloggers and others – but not fundamentally change the truism in the market today

“In the 70s CIOs turned to IBM for advice
In the 80s to Accenture (Andersen)
In the 90s to Gartner
In this decade they rely on each other – unbiased peer input”

Un-hyping the Gartner Hype Cycle

Every summer, usually around July, Gartner issues its Hype Cycle for emerging technologies. It’s Jackie Fenn’s signature product each year and she is one smart analyst.

And it sets off a flurry of press releases from fans and detractors of the categories they catalog. So this year, I have heard from plenty – Cloud computing is overhyped. So is Green IT (both are at the “hump” of inflated expectations in 2009).

Guys, don’t take the hype cycle literally.  Neither clouds nor green showed up in the 2007 Hype Cycle below. Not on the radar at all. In reverse, Fixed Mobile Convergence and Mobile TV which were at the hump in 2007 are nowhere in the 2009 graph.

What does this mean? 

a) Category names morph as they mature. Many converge into others.

b) Never before has there been so much simultaneous innovation in so many tech categories. I mean I can easily average 500 innovation posts a year on New Florence. One Gartner graph with 50 or so categories is not going to cover them all.

c) Gartner is  inconsistent at the category level – e.g.“Web 2.o” at the same level as  “Bluetooth in automotive”- some are products, some are concepts, some are markets with many products 

d) They real strength of Gartner is summarization of their conversations with hundreds of buyers and vendor clients. That allows for good short term confirmation, but not always long-term or even mid-term forecasting.

So take the hype cycle as one snapshot of innovation in the market. And with a grain of un-hype.

Is small a handicap?

That is the point I raised in a comment on the blog of my former Gartner colleague Carter Lusher. Then I see John Drovak raise questions about US CIO Vivek Kundra with (among other things) a skeptic tone that a company Vivek started had only one employee – himself.

As John Hagel says the world is moving to scalable networks of small suppliers with deep specialization. The average CIO spends 85% of his budget with vendors. That is a 1 to 6 leverage and that is the future of the industry – small teams which bring plenty of leverage.

I mean here is Carter, part of a 2 person firm whose clients are some of the biggest vendors in the industry. Here is John, a sole blogger, whose story no matter what you think of it got a reaction from the White House.

Talk about influence way beyond your small size. I am proud of their success, and hope they similarly are of other small businesses.

Fellow rebel, Ray Wang

Readers of this blog know I quote Ray Wang often. Ray has just announced he is leaving Forrester. Over the last couple of years I have come to admire Ray. He is generous with content (and blogs and Tweets) when analysts are told to hide behind their firewalls. He says it as he sees it when most analysts have turned mealy-mouthed. He smiles a lot – every meeting with him leaves you energized though not sure if vendors he covers leave with the same feeling :)

And he is amazingly brave. He had no earthly reason to leave for Mumbai, India when the terrorist siege there last year was far from over. He did so because he had a presentation commitment he felt obligated to keep. Everyone I know calls him a “superstar” analyst – he was everywhere.

At a price. At an event where he sat next to me, I told him I was concerned how sleep-deprived he was. For what?

Analyst firms like Gartner and Forrester, unlike investment banks, do not really encourage “superstars”. Ray’s compensation was likely less than 10% of revenues he was  directly or indirectly bringing to Forrester. It’s funny because I had the same realization precisely a decade ago about how under-compensated I was.

Whatever he does next, I have no doubt Ray will continue to impact the software industry.

I hope he does not mind calling him a fellow rebel. Glad to have you part of the Force!

Bloggers are “cynical”

Says Roger McNamee

I wish Roger were right.

Read Dennis Howlett’s take on fellow bloggers’ lack of cynicism about Google’s ChromeOS announcement

Go to Twitter and see prominent influencers regurgitate press releases and “research” from their vendor clients. The only cynicism they show is for the intelligence of their followers.

Now Roger is one savvy investor and has been a tech industry fixture for a long time. In fact he was on Gartner’s board for a while, so understands the influence game pretty well.

Catch him over a cold one or relaxing after one of his guitar sessions, and he will likely say “I don’t want influencers to be cynical about my portfolio companies. But yes, I do want them to be cynical about everything else”

I must have been one of those “drunken frat guys”

Michael Doane describes in his post throwing eggs on the wall. The post highlights some of the problems with Magic quadrants and waves and other highly summarized charts and research most industry analyst firms are famous for.

I am not sure he gives analysts enough credit for having a constant pulse on the finger of specific sectors they cover. So I can confirm that in the 5 years I was at Gartner I did 1,000+ calls with clients each year. They would call and ask about SAP versus Oracle or Bearingpoint versus Deloitte or specialist budgeting or recruiting tools they were looking. Or they would lament about implementation overruns and Y2K budgets. That input usually got reflected in our Magic Quadrants, not just from the vendor provided references.

Now, of course there was a wide divergence in analysts. Some analysts would go out of their way to avoid talking to clients. They enjoyed presenting and traveling and would rather just take raw research other analysts were collecting.

The other big difference was even though Gartner is famous for having recognized the Hype Cycle, the Magic Quadrants did not overtly recognize where a particular market segment was in the cycle. So in a young market, a quarterly quadrant may have been justified, in a mature one may be one each year.

But apart from the inconsistency in analysts and coverage, the big aha I discovered in my second year at Gartner was buyers did not really read our stuff. They were too busy doing their jobs (or in all day meetings and digging out of thousands of emails – the curse of most corporations).

Vendors on the other hand watched your research like a hawk. I am convinced the science of microscopy owes its existence to vendors who compared how much their dot moved from one Magic quadrant to the next. And even more so, how much their competitors moved.

And Michael is right – they had discovered the art of “outrage”. And the one of threatening their friendly analyst salesperson with cancellations if the research was not less outrageous.

More on Gartner blogs

My post Gartner Blogs, er Markets touched a nerve with Nick Gall of Gartner – see his comment at bottom of that post.

At his invitation, I decided to give Gartner blogs a test drive. Update: see Nick's comment below. The Gartner search functionality is broken; if you use Google search with the syntax he suggests you get many more hits on some of the terms below, though not all. Rimini drew a blank, and Zoho was referred to tangentially. Not sure why Gartner does not fix the search when it is trying to showcase its blogs.

I started with the blog post he linked in his comment – and I agree he should be proud of it. It drew 3 comments and 12 trackbacks (though Gartner’s blogging software does not distinguish between the two)  – which is what blog conversations should be about.  I would have preferred if he had linked to someone non-Gartner in his post (like an external blogger, a trade report or God forbid, a Forrester report), but I nit-pick.

That was six months ago. So I went through to see what else he has posted on his blog. It’s mostly about travel and superheroes and other interesting stuff, but not what I would call about disruptive or innovative trends in the tech industry.

Then I went through the blog search feature to see what else his colleagues  are sharing on blogs about burning disruption or exciting innovation topics in many sectors of the industry.

I used 8 key words – 4 which I consider ripe-for-disruption tech sectors and disruptive vendors, and 4 many would agree define innovation areas or products.

Here are my results:

A. Disruption related

Maintenance

One of the hottest topic in the enterprise software market as readers of Dennis Howlett, Frank Scavo, Ray Wang (a Forrester analyst who is unafraid to take positions on his blog), Brian Sommer and my blog read week after week about the low payback from software maintenance.

I found one post on Gartner blogs by Pat Phelan – with the detail deleted with message “This user has elected to delete their account and the content is no longer available”

Rimini

The poster child for third party maintenance – and disruption - giving vendors like Oracle fits.

No Gartner post

Roaming

One of the most criticized aspects of the iPhone/AT&T relationship is the out-of-sight international roaming voice and data charges . Reported on my blog and hundreds of others. Being disrupted by Skype and others.

No Gartner post

Storage

One of the most expensive pieces of IT infrastructure. Being disrupted by cloud vendors.

One Gartner post  by Tom Bittman - Will Cisco unify computing? Not exactly related to storage , though. Cisco is is converging servers, network gear and virtualization, storage is actually not the focus in the first go-around.

Two more posts on collaboration – storage seems ancillary to that

Innovation related

Telepresence

sector with one of the hottest Cisco product introductions ever.

No Gartner post

Zoho

along with Google Apps redefining desktop apps

No Gartner post

Twitter

Love it or hate it, every CIO wants to hear what to do about it

Two Gartner posts – in January

iPhone

Widely considered one of the greatest product introductions in history

One post – by Daryl Plummer 

At the risk of having Nick calling me worse than “mean-spirited”,  I am sorry but it just proves my point. On some of the burning and exciting issues in the industry, Gartner blogs are silent or anemic.

Gartner blogs, er markets

My former colleague at Gartner, Jenni Lehman now has an influential job guiding its research methods and structure.

She recently met with Hill & Knowlton and touched on Gartner guidelines to its analysts as they blog

“…avoid inflammatory subjects, don’t post information and advice for which clients pay Gartner, protect and enhance the value of the Gartner brand.. ”

Cut through all that and it says – use blogs as a Gartner marketing tool, not necessarily to add to industry debates and conversations.

I recently wrote about my sources of blog materials beyond RSS and Twitter. It was not a slip that I did not have Gartner research or their blogs in my list. Because I focus on disruption and innovation – I don't get much from Gartner that is disruption and innovation focused ( I do from individual analysts like Jackie Fenn or Jim Holincheck when I run into them at a conference)

Because that would be "inflammatory". Let's face it  Gartner is a status quo market leader defending status quo, larger vendors. My friends there will vehemently disagree, but their Magic Quadrants reinforce the notion that status quo, larger vendors are the leaders and safe choices. And their other famous tool, the  Hype Cycle reinforces the risks with disruptive and innovative new vendors. 

Jenni does say Gartner encourages its analysts to “be personable and have fun”. Jim Holincheck did write - and other Gartner analysts are welcome to write about their hobbies - in my guest column series.

You too, Jenni :)