Gideon Gartner's Analyst Firm of the Future

Is there room in the marketplace for another influential research and analysis powerhouse to rival Gartner? Gideon Gartner thinks so.

At Knowledge Capital Group's recent Analyst Relations Summit in Orlando, Gideon noted that there are 50 million enterprise IT users worldwide. However, only a fraction of them -- 20 thousand -- have advisory seats with the Stamford, CT-based research firm that bears his name. (Gideon, by the way, cashed out a long time ago -- though his name still hangs on the billion dollar research firm.)

Given that Gartner is the "900 pound gorilla" in the analyst research world, its opinions carry enormous weight. Analysts at that particular firm have the power to make or break a deal (or vendor). So, when companies launch thought leadership marketing initiatives, they are often responding to or building on research produced by the firm.

While other companies such as Forrester, IDC or Tower Group may be influential in particular market segments, Gartner -- which gets the majority of its revenue from end users and therefore, is relatively independent -- remains king of IT analysis.

Gideon believes there is great opportunity to go down market and reach all the other individuals who need research and an expert's advice to make a smart IT decision. So far, no one has really jumped at the challenge. A new model, he believes, would rely on the expertise of a network of independent analysts -- much as his previous firm, Giga (which was later sold to Forrester), did.

The problem, he believes, is capital. As he noted, it takes a lot of money to bankroll a sales force that could go out and sell these services to a wider audience.

But what if these services were sold on a direct marketing model? Perhaps there's an opportunity to sell IT advisory services on a wider scale by adopting a new marketing model that isn't dependent on a large, expensive field sales force. It might sell these services the way CDW or Dell sell computers to the SMB marketplace.

Any takers? I think it's a cool idea. If you buy the premise and see a way to make it happen, please give me a ring.

Comments

[Duncan]

Services like marketresearch.com go part of the way here, because they make individual reports available to a wider audience.

However, the obstacle is that the written research by itself is not so valuable. Here at Lighthouse AR [ www.lighthousear.com ] our annual CIO surveys shows that users who only get research are unsatisfied with the analyst community; it's only the users who are able to get both personal advisory time with analysts as well as the research who really feel their needs can be met. And that is a complex sale that's hard to take direct.

Garter's made a wise choice in focusing on $1bn plus firms in North America and Western Europe, and in closing its APac consulting business. Without research and advisors in other languages and rooted in the different tech-buying cultures of other regions it will be costly for analyst firms to really win in the high-growth markets where analysts advice is most needed.

[Britton Manasco]

Thanks, Duncan, for your thoughtful comment. I agree that truly high value analyst services would include analyst advice (and not just printed research).

The key question for me is whether this can be sold by other means than a brute force field sales force. My suspicion is that strong direct marketing campaigns supported by an intelligent inside sales crew could pull this off at far less expense than the enterprise-focused marketing/sales model associated with conventional analyst services. It may make sense for Gartner to continue to spin around in the stratosphere of elite corporations. However, I sense they are vulnerable to a classical disruption (a la Clayton Christensen) from below.

The disruption would involve a change in both sales/marketing and distribution/production. The issue here is that no one has tried this option. It is neither proven or unproven. What seems clear is that the analyst industry is stagnant. Time to think different. Here's an alternative approach. I think it could work, but what's the evidence to think otherwise?

I welcome further exploration on that question.

[Davin Juusola]

Hi Britton,

Info-Tech Research Group has been doing exactly what you are suggesting for 10 years now. In that time, we have built an active client base of more than 20,000 members at more than 8,000 companies, primarily in the SMB space. We use a combination of direct marketing and inside sales to reach new prospects and to manage our existing client base.

While I understand Duncan's comments about analyst access being a critical part of the analyst experience for clients they survey, I imagine his survey respondents are (a) primarily from large enterprises and (b) mostly Gartner/Forrester clients who have been weaned on a diet of mediocre research written by smart analysts. To get full value, clients are almost forced to talk to an analyst.

Duncan's premise holds less water in small and mid-size enterprises where the planning horizons are shorter and where the gap between current practices and known best practices may be larger. These clients want practical, tactical research that helps them get the job done more effectively. Don't get me wrong, analyst time is always valuable (we sell it ourselves), it's just not the be-all, end-all for mid-sized enterprises.