My former Ovum colleague Mark Wiggins has sent me an interetsing comment, with perfect timing now that The ITXpo has closed and Symposium is slowing down. Mark is now at Infiniti Research, where they specialise in delivering the sort of custom research services that Gartner has recently decided to forego. While not agreeing with all his comments, there’s a serious argument….
With Gartner’s annual Symposium ending at DisneyWorld, Florida, I wonder whether the world is watching with the same degree of interest compared with a decade ago. Certainly, most CIOs of the Fortune 1000 trust and use Gartner – www.gartner.com , and to a lesser extent Forrester – www.forrester.com , to gain assessments of emerging technologies. These firms typically evaluate a technology’s business case for adoption; whether there is a killer application; its viability against rival technologies; the ROI and vertical market timing-curve case; whether it will cross Geoffrey Moore’s chasm and when; and its compatibility with existing and evolving architecture.
After the IT/Telecoms/Internet crash earlier this decade, the IT advisory industry was confronted with numerous challenges, particularly:
- • Role of IT. IT became a support function. The CIO’s IT Strategy, previously built on the assumption of a mandate to push “revolutionary”emerging technologies on to the business (where process follows technology), is now geared towards following ‘Business Strategy’. Technology is simply another delivery channel for achieving a company’s business goals;
- • Consolidation. Fortune 1000 IT Departments’ annual advisory research budgets culled the best-of-breed providers in favour of one-stop-shop offerings like Gartner and Forrester;
- • Scepticism. The Fortune 1000 became sceptical and sometimes disparaging of the archive of rosy pronouncements by IT Analyst firms (particularly Forrester) on the apparently massive market potential of (what seemed to be almost) every emerging technology.
In response to a shrinking and consolidating market, there has been considerable innovation over the last couple of years by new entrants,
- 1. Immediate Analysis. The desire for immediate analysis on a product launch, Merger, Acquisition, Economic Data release, CIO survey, Large IT Vendors Qtry results etc – spawned a number of companies (eg., ComputerWire, Current Analysis) that offered annual contracts for delivery of daily analysis of the IT & T news;
- 2. Peer-to-Peer Best Practice. The smart mover in this space has been Corporate Executive Board – www.executiveboard.com , who sensed a disenchantment with the evangelical “you should do this because we know best” approach of the traditional firms. They created a portfolio of services (eg., forums) for job-functions rather than business areas eg., CFO service, CIO service, CEO service, HR service etc where the analysts did not decide which areas to research. Instead, CEB polls its members to define the research agenda and has created a virtuous circle of researching its membership exhaustively to isolate ‘best practice’;
- 3. Sector Specific Practice. Realising, like Corporate Executive Board, that it would be foolish to take on Gartner and Forrester head to head in the IT User market (a market 50 times bigger than the vendor market), many Tier 2 firms have gone to sector specific practices eg., Government, where there are often lucrative niches. For example, a growing market for some is the provision of advice on negotiating optimal software licensing contracts with vendors such as SAP.
- 4. Thematic Research. The Tier 1 and 2 Management Consulting Firms (PWC, KPMG, Deloitte, McKinsey, Booz, Boston, Bain, Roland Berger etc) found themselves in direct competition with Gartner, Forrester, Ovum and IDC for major consulting contracts in the ICT sectors. So to demonstrate their understanding of the space, they invested in small internal research teams to produce either: (a) Emerging Horizon visionary stuff (eg., like Gartners Hype Cycle); (b) ICT Trends and convergence. These ‘Trojan Horse’ offerings are generally free to clients, prospects, website visitors and the media.
Charles Darwin would be delighted that the big 4 players (Gartner, Forrester, IDC and Ovum) have responded by adding the innovations of the new players (1-4 above) as paid or free components of their IT advisory portfolio.
However, is the rise of business networking sites an opportunity or threat to the IT advisory firms? If these IT advisory firms have lost desktop ownership of their major clients, how might they get it back? Today, do corporates already pay more attention to the IT user experience conveyed online in ‘blogs’, ‘chat rooms’ and ‘user forums’ than those of the analysts and vendors waxing lyrical at the Gartner Symposium at Disneyworld?