oAR people in the software industry need to pay much more attention to the growing influence of services analysts and freemium firms on their market.
Digital Clarity Group just pipped HfS Research for third place in Influencer Relations’ Analyst Firm Awards for 2014, but the fact that both those firms are in the top five speaks volumes about how freemium has changed the analyst firm landscape. Using the data from the Analyst Value Survey, our awards looked for the firms that people in the software industry said were delivering the most value. These are the top ten.
- Digital Clarity Group
- HfS Research
- Everest Group
- 451 Research.
The context for this is the rapid professionalisation of sales and marketing in upstart analyst firms, where Digital Clarity Group, HfS Research and Everest Group have been narrowing the gap (HfS most notably having taken the wise step of hiring Bram Weerts, a Gartner alum who I think is the world’s leading expert on how upstart analyst firms can grow sales profitably).
Freemium reinforces that. When more people are reading research from upstart firms, they give new clients an experience of their value, they also commodify the core product of Gartner and Forrester: research. That reduces the barrier to market entry posed by Gartner’s huge sales force.
But it also reflects a broader plurality of opinion in the software industry. Both the demand side and supply side are less concentrated around IT people: more line of business managers are using research, and analysts are often not technical experts but people with a business background. More people are using analyst research, and the rise of freemium compounds that by making it easier for new analyst voices to be heard and to win an audience.
That poses challenges for AR people. Gartner and Forrester are still the most influential, by a long way, but the ‘long tail’ counts for more. Over time all AR professionals need to be reassessing how much effort they allocate to different tiers of analysts. Not only are some freemium firms moving up from a lower tier to a higher one, but the influence of mid-ranking analysts is generally growing. That means that most AR teams face an increasing reputational risk for their firms if they continue to focus too narrowly on a sall number of analysts.
Sadly relating to the long tail increases the risk: the same effort distributed across more people will increase the overall knowledge of, and favourability towards, a firm. However that will also mean a weakening of the relationships with top-tier analysts as resource moved from them, and increased expectations from mid-tier analysts. It will also mean more fire-fighting as more our colleagues get anxious about the wider range of unfamiliar analyst firms commenting on companies. No-one said it would be easy, but in this respect analyst relations is simply getting harder.
Luckily, the Analyst Value Survey has the seeds of a solution. If we can focus AR outreach more on the analysts who are really valued by our audiences, then we can shift effort away from less productive areas with more speed and more confidence.