deal architect

Burning Platform: Analyzing the Analysts

For the 120th episode of Burning Platform, we host John Taschek, Chief Market Strategy Officer at Salesforce.

We go through his two decades at the rocket ship called Salesforce and how he has handled industry analysts differently than most other vendor executives.  His humility through out the conversation is striking.

I ask him how he got comfortable with boutique firms and independent analysts when most others prefer to deal with institutional analysts like Gartner and Forrester. His philosophy is he prefers to rely on the knowledge and the curiosity of the individual. and not the firm.

“Instead of tiering the analyst firms, why don’t we tier the analysts? That opens up the world quite a bit when you get away from just Gartner or just IDC. You look at all the independent analysts who have really unique point of views. I did it when Salesforce was very young and we could learn a lot from individual analysts, but I have never shifted from that position.”

We discuss how he has benefited from being on the Product side of the business versus the Marketing side

“I pushed early on to be on the product side. Because being closer to the product gives you a whole bunch of benefits when you are talking to analysts. You have more collaboration with the product teams, which are developing the strategy. I was against being positioned in marketing or comms… because that’s much more outbound. I didn’t want to be a pitch factory, just saying stuff about what we did and how great we were.”

We cover the massive new opportunity around Generative AI and the huge growth in their Data Cloud. We also spend a few minutes on monetizing data and impact on trust, emerging global opportunities and my upcoming fiction book – a thriller where an analyst helps the FBI around the disappearance of a Silicon Valley AI billionaire.

We discuss improvements he would like at analyst firms (too many silos across analysts, the “walls” between the sales and research sides of the firms) and the fact that “the bigger firms have great analysts who are doing great research. But overall, they are seen as safety nets for decision makers.”

As I mentioned earlier, his humility shines throughout. It is a truly enjoyable 40 minute conversation with plenty for both vendor executives and analysts to learn.

"Being an Analyst (and Vendor AR) in a Chaotic Time"

Paul Greenberg invited me to one of his video channels to “analyze the industry analyst market” especially in a time of so much change.

Watch the whole conversation below. We cover a lot of ground:

• The history and evolution of industry analysts
• Where analysts have done well
• Where analysts are not leading the market: I share examples around 3 areas – vertical edge applications that have become viable in the last few years, localization in a dramatically changing global landscape, high payback Gen AI use cases
• How IT analysts compare to geopolitical advisers and energy and other vertical analysts who are handling even more volatile landscapes
• How vendor AR needs to itself evolve – get a balance between influence and intelligence they should expect from analysts
• Why vendor AR needs to evolve beyond 30 year old market categories and the “institutional” analysts  

As Paul mentions we could have gone much longer. If we had, I would have worked in a few more comments

• I talk about the massive impact Gartner had in the 90s, and I should have also mentioned how influential they were in highlighting the Y2K challenge, including doing briefings for the US Congress.
• People say Gartner is $6 bn in revenue - 7X as large as when I was there in the late 90s, ergo it is even more of the 800 lb gorilla in the sector. Not really. It has consolidated the market – made 25+ acquisitions since. As we have seen with vendors like IBM and Oracle, past acquisitions are not a good indicator of contemporary relevance unless you invest heavily in changing markets and new products
• I should have mentioned a fourth dimension where analysts need to step up - accelerating customer migration to new architectures and covering automation in such migrations. It is shocking after 25 years of cloud computing how many customers are stuck with on-prem and custom developed applications.
• I highlighted some of the strategy firms in the 80s like Nolan Norton and Index and the Big 8 accounting firms which were influential in technology decisions. I should have pointed out today’s influencers include strategy firms like McKinsey, Bain and BCG, VC firms which are funding new market categories and many more new players
• In the section about globalization, he mentions how NetSuite was a leader in localizing for several countries. That momentum has slowed down just when it needs to accelerate. Localization covers the UX to include scripts (right to left, double byte characters), tax, sustainability and other compliance, local support and partners etc. SAP towers over other application vendors with its slate of countries supported, regional user groups and on many other metrics.
• Paul asked me somewhat rhetorically how analysts can change and lead. I say that was rhetorical because no one told him, me and others to start writing blogs or books, generate tons of video and social media content over the last two decades. But we did, and we should not need reminders to lean into new areas given the massive changes and turmoil we live in. No industry or geography is unchanged. There are plenty of market signals that analysts and vendor AR need to evolve – rapidly and dramatically.

Industry Analysts - in a time of upheaval

I watched a replay of a webinar run by Carter Lusher and Duncan Chapple which focused on Gartner’s and Forrester’s recent earnings and their influence on technology markets. Both Carter and Duncan are long term watchers of IT Analyst Firms and if you are into “analyzing analysts” you will find the replay available here pretty interesting.

They touch on revenues, events, number of salespeople, reprints of research reports and other metrics as measures of an analyst firm’s “influence”. One perspective Carter presented “Gartner explicitly said for the first time that 75% of their contract value are in users. So this is all about the end users, and the influence on buying. On the other hand, Forrester has been stagnating for a long time.”

I run into Gartner, Forrester and IDC analysts on a regular basis at vendor events. I have watched firms like Constellation and Diginomica mature over the last decade. We analyze technology markets, not analysts and there we get plenty of independent input from work on our books, video series, advisory projects etc. So, I will defer to Carter and Duncan – their analysis of analysts “in the moment” is spot on.

However, I am working on a project which looks at the history of IT and of industry analysts and how in some ways we may be coming full circle to the dawn of enterprise technology. In the last couple of years I have also studied research for other projects from energy and healthcare analysts, and geopolitical advisers. So it has been interesting to see how IT industry analysis has evolved (or not) since my time at Gartner from 1995-2000.  

First let me explain my “full circle” comment. In the 80s and earlier, corporations truly did not understand the power of “data processing” or how to account for its costs and payback. Consulting firms like Index, Nolan Norton, Booz Allen and others helped companies with such analysis.  Analyst firms – which blended publishing and light consulting/advisory - weren’t popular yet. Most applications were built, not bought. Packaged software had its own convoluted acronym – COTS – Commercial Off the Shelf.

In many ways, we are back in that world. Clearly Generative AI is causing major upheavals. However we have been going through other megatrends tumbling into each other for the last decade – massive digital transformations, COVID, Ukraine-driven energy shock, climate change, supply chain and labor chaos. It's trite to say it, but it has been relentless upheaval.

And we are back to where many executives are baffled by the complexity of technology and don’t know its real cost or payback. Suites were supposed to cover wall to wall processes across the enterprise. Many companies have ended up with 50, 70, 90 surround applications around these “suites”. Cloud computing was supposed to be the end state, yet 70 to 80% of vendor’s customer bases stick to their old, rusting previous generation applications even as vendors guilt them of “technical debt” and warn them of recruiting challenges and compliance risks. We are back to building many applications. In fact, for many the most promising use case for Gen AI  is developer productivity. They find very few vendors have COTS solutions for their changed industries and global regions.

In this world, consulting firms like Bain, BCG and McKinsey are helping companies with technology strategies more than analyst firms. VC firms have led the way defining new operational metrics for startups and defining new market categories much more so than market watchers.

I hear from buyer executives: analyst firms still sell FUD and insurance. “You can tell your board you followed our recommendations”. We did that decades ago. Today, that’s lazy, un-customized advice.  

In my 5 years at Gartner, I estimate I did 10,000 “GAMECs”. That was an internal log of every query call we did with  a client. They would be looking for Y2k compliant applications and ask us to validate their short list, or rely on us for negotiation advice or for help identifying the right SI for their implementation. The subject matter varied from call to call, but with so many data points our Magic Quadrants wrote themselves. We truly had our finger on the pulse of enterprise customers. Now I hear vendors complain that analyst firms instead have them take months to fill out surveys that they use to create their MQs and MarketScapes. What happened to first-party conversations with decision makers?

In 2000, when I left Gartner, its revenues were under a billion. Last year they were just shy of $6 billion. However, much of that has come from over 25 acquisitions Gartner has made since. Many of Gartner’s acquisitions like AMR and CEB extended its vertical and business process capabilities, but have they used that to reshape their definitions? My little firm has been tracking edge applications in verticals and emerging markets as the world re-globalizes. Surely the analyst firms can do similar and dramatically broaden their definitions for market categories they launched a decade or two ago?

I have heard vendors complain they find ex-CEB folks have process excellence but very little knowledge of their products or that of their competitors. They say Gartner acquisitions have not been fully integrated even after years and the advice is consequently fragmented. Don’t you hear about similar slow integrations at acquisitive software vendors?

Some of the first few advisory projects we did at Deal Architect showed us how many professionals beyond industry analysts are involved in a software decision. It led me to write about the “thousand points of influence”.

Gartner had a remarkable run in the 90s. Concepts like Hype Cycle, Total Cost of Ownership, Service Oriented Architectures are impactful even today. The application group I was part of defined market categories like ERP and CRM which have similarly survived. We were encouraged to challenge, not just praise vendors or go along with fashionable industry commentary. I don’t see that kind of “bravery” in IT analysis any more. Even fellow bloggers focus more on reporting from vendor events and doing cutesy social media stuff.

In contrast, I do see some spunk in energy analysis and in geopolitical advice. Those analysts do so even as they are under a lot of pressure to support woke political positions and to not piss off ruthless dictators around the globe.  IT market analysts, in contrast, are afraid to offend far less powerful vendor executives or bureaucrats.  

In my Gartner “boot camp” in 1995 I heard a comment from a truly curmudgeon analyst -“Sacred cows make the best hamburger”. It has stayed with me for the last 3 decades.  We all need to adopt that critical mindset about the industry, for governmental mandates and about our analyst community. We look silly otherwise with so much upheaval around us.

Gartner and Oracle: Why I am missing their major events this week

Analyst Cam: CRM Watchlist

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission) as part of my Analyst Cam series.

This time it is Paul Greenberg, Managing Principal, The 56 Group, LLC. He summarizes the results from his latest CRM Watchlist survey. He is a repeat guest and was last on the Burning Platform episode where we discussed generational shifts in content creation and distribution.

This is the 19^th edition of his signature, annual project. He describes how the effort has evolved over the years. Lot of factors go into his scoring and they change every year. As he says, he looks at a vendor’s strategy and scores it on how well they executed on what they said they would. He then measures the impact they had on the market. Impact as a company – so not just their architectural excellence or financial performance or social responsibility posture. And it is based on the vendor’s stated strategy and market focus – which allows smaller vendors to be evaluated fairly depending on how they delivered against their geographic, vertical or size of customer focus.

He does factor in what he calls “intangibles”. His scoring for that category is a bit less transparent considering how much he guides vendors about the others. But he shares one nugget - he deducts points for “competition bashing”. Good for him.

He is tough and thorough, but very fair. Does not matter if you are a client of his or a close friend. This year, he evaluated 59 vendors reading every word of the 4,682 pages (yes!) if they were submitted to his guidelines. It is a testament to his market impact that vendors spend so much time and effort on their responses.

He has three winning categories -Winners, Winners with Distinction, and Elite. Only a handful have qualified for the Elite designation over all these years. There were 4 winners with Distinction this time around – Oracle, ServiceNow, Thunderhead and Zoho. He discusses another 12 in the Winners tier. Zoho scored highest in total this year. It also submitted the longest response at 259 pages. Paul insists there is no correlation between size of the response and his scoring.

He also shares the vendors who scored highest for each of his categories and summarizes with 4 promising and 2 concerning trends he gleaned from this year's responses.

I have run competitive evaluations of software vendors and outsourcers for many a client. At Gartner, I ran similar structured reviews for Magic Quadrants and other long-form content. I feel no shame saying I did not ever come close to evaluating 50+ vendors or reading 4000+ response pages for a single deliverable.

Next year, Paul says will be the final Watchlist. I suspect he will get an even larger population of vendors who pay homage by participating. In the blog post he said “Since this upcoming one is the very last one so, if I'm you, I'm registering to take a crack at it. Even if most companies don't win the award, they more often than not appreciate the exercise that you go through to put together the submission because it, when completed, gives you a holistic look at your company that you otherwise do not have.  It's worth it for the workout.”

I will absolutely bring him back for to describe the process for the 20th in the series. In the meantime, I need to have him back around his other passion – professional sports. We can discuss Tom Brady’s “un-retirement”, the return of baseball after a near shutout and so much else.

A tribute to Kurt Marko and to social media friendships

Jon Reed of Diginomica called this morning with some shocking news. Kurt Marko passed away - he describes what we know so far here. As we were talking, it struck me the lengths Jon had gone to find out about a colleague across the country, including getting local police to go visit his family. 

It brought back memories of countless messages of concern I had received when I had my health hiccup a decade ago. We may argue like crazy but we have made some really strong bonds via social media.

Jeff Nolan said nicely in his tweet “His wit was just as sharp as his analytical brain, perhaps only overshadowed by his independent spirit.” I can vouch for Kurt's independence - we had many spirited conversations (most unrecorded) on a variety of STEM topics.

As was common with Kurt, he did not say what was politically expedient. As a Stanford electrical engineer, he could and would speak with a lot more authority than so many who claim to be “science based” in their opinions. You can see that on this Burning Platform episode on energy trends we recorded during the COP 26 Climate Change summit in Glasgow. There I mentioned “Kurt has the uncanny knack for demystifying complex technical topics."

My one regret – I never met him in person. We had arranged to meet in his hometown in Idaho on one of my trips and I had to cancel that trip at the last minute.

Somebody asked me a while ago if I missed anything about not working for a large company. I said “Christmas parties”. I then told this person “I hope we can convene once travel opens up, a holiday party for folks who mostly meet over social media and don’t have a corporate event to celebrate”  

Over New Year’s Eve, Kurt had shared with a few of us the wine from the Loire Valley he was planning to open that evening. Kurt, when I do convene that Christmas Party, I promise we will have a bottle of that and raise a toast to you.

Cheers, my friend.

Burning Platform: Analyzing the Analysts

In the 65rd episode of Burning Platform, we host Duncan Chapple, Co-Director of the Analyst Observatory at the U of Edinburgh.

He presents a summary of their 20^th annual Analyst Value Survey. It is a fascinating discussion of how the influencer space keeps evolving.

We cover dramatic shifts in technology buying centers  – verticalization and the impact of the pandemic, the growth of Asia/Pac, shadow IT and the fragmented landscape of advisers they turn to – traditional firms like Gartner, advisory firms like Everest, the Big 4, peer review sites like G2.

We discuss the changing role of the Analyst Relations functions in vendors and the likely move away from somewhat static, formulaic approach to market research to more scenario based planning.

We discuss several other topics – using analyst firms for influence v intelligence, the perception of analyst independence and the value of their content and market research.

The session ran long but we could have easily gone much longer. As an example we did not touch much on the impact of strategy consulting firms like McKinsey and BCG especially in complex digital transformations , and the advice, blogs and videos a small firm like mine brings to this landscape.

Unit4 pioneers the “hybrid analyst summit”

Since Workday held its first Analyst Summit in 2010 - I had called their effort exhilarating - I have encouraged vendors to adopt a similar format. User Conferences are more for customers - I find analysts intrude on their time when we are invited to those events.

Since then, vendors have become increasingly creative in their summit formats. Plex used to combine them with customer plant visits. Workfront co-mingled one with a customer advisory board meeting. Others have used them to also showcase their new real estate - Infor and SAP in New York, Zoho in Austin.

During the lockdowns of the last 18 months, vendors moved the summits to virtual format. Recognizing every one’s digital fatigue, most vendors kept them short and spread them out. But as Jon Reed of Diginomica and I discussed - see starting at 26.15  here - the virtual format has been somewhat flat. I have compensated with lots of 1:1 conversations and shared over 300 of them in my Analyst Cam, Burning Platform and other video episodes. 

So it was good to spent time with Unit4 executives last week, first virtually, then in person in Boston. The virtual part was broadcast from their X4U user conference. The in-person portions were a dinner, followed by a 6 hour event at the very pleasant Intercontinental which harkens memories of the Tea Party in 1773. The access to Unit4 executives in all 3 segments was impressive and they had safety protocols in place with certification requirements, masks etc. Not overbearing, just prudent.

The content in the in-person day was particularly striking. CEO Mike Ettling described how he had focused Unit4 in his 3 year tenure- as he described it they had accumulated a variety of "hot dog stands" he had cleaned out. He presented on how they adapted to the pandemic. He discussed the ‘dikes’ they raised - operating principles to keep them protected. He had described some in this episode. 

He also discussed the move from Advent to TA Associates as their lead private equity investor earlier this year. In the middle of the pandemic, they had face to face meetings and due diligence with 15 PE firms before settling with TA. Off the record, he had described to me more of the intense 4 month process. PE firms are a mystery to most of us - this would make for a dramatic book. I hope someday he writes it. Or let’s me narrate it for him.

He then invited Morgan Seigler, a Managing Director of TA and co-head of TA's Europe Technology Group to present their perspective and expectations. As he told us, they see ‘riches in niches’ and are investing in a variety of vertical enterprise software vendors.

That was a good segue for later sessions which featured the product - an update on the ERPx rollout and the Industry Mesh they announced - see image below, with plans to verticalize for Unit4's target industries. It also included a customer section which profiled Buro Happold – a global firm with 1,700 staff who consult with architects and engineers - in line with Unit4’s vertical focus on service- and project-focused businesses. 

The variety in the sessions and the generosity in executive access truly stood out. Brad Everett and Antonella Crimi who head their corporate marketing and AR efforts did a really nice job coordinating the complex logistics of the hybrid agenda. Either in virtual or in person mode, I think they managed to engage over 50 analysts. 

I think every vendor can learn from the Unit4 event, but I should point out not every vendor had bought into the in-person summit format even prior to the pandemic. In fact, I got feedback from one they were offended that I had recommended they adopt the format. This vendor also turned down my offer to profile some of their execs in my video series in the last year. They appear comfortable with having analysts wander the halls of their user events. Travel should be a lot easier next year, but I do hope the hybrid format takes off and vendors get even more creative.  

 

Burning Platform: Acronyms, Buzzwords and Customer Realities

In the 56th episode of Burning Platform, we host Jon Reed, a co-founder of Diginomica.

He is a fellow Enterprise Irregular who blogs and videocasts on enterprise trends. One of his most popular, regular features is Enterprise Hits and Misses. He is incisive, snarky, funny all at once.

We start off dissecting a Gartner slide from their recent Symposium, a list of 12 of what they call "Top Strategic Technology Trends for 2022" like Hyperautomation.  We use that as a launching pad for a discussion on what we think customers are looking for after the turmoil of the last 18 months. Jon makes a great point - he wishes he could see Gartner's hype cycle around each of their 12 trends.

We discuss the need for application/business process vision in addition to architectural evolution, and the need for OT (operational technology, especially industry specific) in addition to an IT focus.

We also discuss virtual events in the industry. Jon has been particularly forceful in pushing for an evolution in that format.

We also bring into the conversation a fellow analyst, Ray Wang and his new book, Digital Giants. Ray had presented about it in the Analyst Cam series here. 

It is a peek into conversations that us market watchers often have when we are away from tech vendors and buyers. Actually both of us are pretty well behaved - we can be far snarkier when there is no camera in sight:)

Thinking outside the Magic Quadrant

First an apology, I could have it titled this post as well with the Forrester Wave or the IDC MarketScape.

Next a mea culpa, I unleashed a few MQs during my tenure at Gartner in the 90s. However, in the years since I have become much more aware of the disconnect between tech buyers and vendors about the value of such tools.

When I was at Gartner, its revenues came largely from buyers. In the run up to Y2K, my colleagues and I did thousands of calls with buyers actively making ERP decisions. Coming up with the MQs - the leaders, challengers - was pretty easy with that market driven data. We did not have a composite win/loss analysis but we could make some pretty educated guesses about market share and momentum.

In today’s much more fragmented IT marketplace, especially since analyst revenues have become more vendor centric it must be so much more difficult. Analysts have to poll vendors for what we used to gather from market signals. You hear vendors whisper in frustration at how much effort it requires on their part.

The bigger issue is how buyers use MQs or Waves. It is just the tip of a spear. It is used to come up with a short list of vendors to evaluate. Detailed RFPs, demos, site visits, reference calls, lengthy negotiations are far more influential in the final decision. Nearly 15 years ago, I wrote about the ‘1,000 points of influence’. With growth of social media, the influence points have only grown. In composite, they help buyers derive their personalized "Interactive MQ".

Also, once they have decided on a vendor, most buyers don’t pay much attention to that MQ category till their next purchase - that could be a couple of decades. Oh, if a vendor drops precipitously from the Leader to the Niche quadrant, they would be concerned, but such moves tend to be glacial.

Vendors, in contrast, get their microscopes out to measure how much they moved from one MQ to the next. It’s fodder for press releases. I especially enjoy the Triple Crown announcements. “We are a leader in Analyst A, B and C’s tools.” I want to ask them - and how many buyer steps above did that eliminate?

MQs and similar tools also tend to reinforce silos in analyst firms. That can drive what I have described as Addressable Market Myopia 

There is a whole community of very committed Analyst Relations folks at vendors. Ignoring MQs would be suicidal, but does so much talent need to be invested every year on the MQ/MarketScape process?

Some of them will ask me what would you do differently. I am happy to help them think outside the box - ok, the square - in how to directly help their sales colleagues in their pursuits. How to help their companies think about and present their products differently and much more creatively. How to look around the corner - the analyst intermediary.  

No press release needed.