One of several striking common factors, when we see the rise of newer analyst firms, is the way they are bringing together analysts to explore new value propositions. Great insights and good analysts are not enough to build momentum. A great example of that seems to be Constellation, a firm that’s passionate about disruptive technology with a futurologist and macro-level bent that reflects its leadership team and what seem to be independent analysts who pay a membership fee to be represented by the firm (Or is it? The comments below this article, the most for any host on this site hint that there’s another side to Constellation, and uncover a major shift in the firm’s business model that supersedes the account on its website).
Social media have transformed the way in which analyst firms reach out to end-users. With HfS, perhaps most obviously, its freemium model has allowed it to win a huge audience. Perhaps Constellation and Redmonk have an edge at understanding the ability to use social media as a collaborative community-building tool. Constellation certainly stands out, with Forrester, in having community at the centre of its self-image. As an example few firms (Constellation, 451 and Canalys come to mind) have the sort of apps that allow attendees to connect at events: perhaps the “late majority” clients of some other firms want to follow analysts rather than learn from each other?
That is amplified by the way that many firms are so far behind in their use of social media that, even if an innovative firm was to wait a few more years, it could still have a first-mover advantage.
One factor is that Constellation aims to serve a different niche in the global end-user market, which is currently underserved. That reflected in hiring people like Dennis Kanemitsu, a skilled operations leader from Forrester with great insight into the APAC market, but also in looking for new services to connect better with their target 20% of the end-user market: the segments of transformational market leaders and proactive fast followers. The firm’s client base is already impressive, and that’s reflected by the attendees, 70% of whom are end users, and sponsors at the firm’s annual executive innovation summit, Connected Enterprise. We expect that Constellation will bring its style of events to a global multi-city audience.
Community and peer services are clearly key opportunities for many analyst firms. Constellation’s has quietly launched its Constellation Executive Network, allowing individuals and their organisations to access research, inquiry privileges, peer networks, and events in one offering.
Another major trend is the need to professionalise the leadership and account management at firms, which was partially reflected by Bridgette Chambers‘ rather brief period as Constellation’s CEO. The firm’s new customer on-boarding processes are said to reflect a customer success design point.
What does this mean for Constellation’s traction in the market? We’ll find out when the Analyst Value Survey results come out next month.
P.S. Of course none of this means that Constellation’s rise is assured or painless; that is why there’s a question-mark at the end of the headline and why this article referenced both the short tenure of the firm’s CEO and the reality that the firm’s analysts are generally independent rather than employees (Constellation points out that most of its team are employees). Despite these issues, and the reality that Constellation does not seem to work for most analysts who join it (the majority move on quickly) its impact on clients is real. The chart above shows that just over 7% of the analyst firm users that responded to the survey said that Constellation is one of the firms they have used: that puts it in the top 20 firms worldwide, on a par with TBR and Digital Clarity Group. Many of Constellation’s competitors are uncomfortable with Constellation and its sharply- tongued founder, and the analysts who have made bad investments in the firm are understandably regretful. That does nothing to lessen the reality of the firm’s survival.
PPPS A followup comment is here on Constellation’s use of psychometrics.