In 2014, Priscilla Awde wrote the most in-depth journalistic study of the analyst industry for more than a dozen years. The article, still under copyright by Euromoney Institutional Investor, cited several analyst industry leaders including Brett Azuma, Crawford Del Prete, Joanna Gluzman-Laukkanen, Joerg Kerler, Paul Budde, Tony Lavender and me. The article is indexed in several databases, including Proquest. I’m citing a few clips from it.
Few are brave or perhaps foolish enough to make multi-million pound investments without the expert advice of the independent telecoms analysts who evaluate markets, players and technologies, identify trends and sift through the burgeoning mass of data for vital golden nuggets…
Perhaps because analyst firms are so influential — and because they in turn are so dependent on client relationships — many were reluctant to be quoted for this article.
Most analyst firms generally appreciated the chance to explain their work and impact, but both Gartner — the biggest in the market — and Frost & Sullivan refused interviews with GTB.
Some operators too were doubtful, either not wanting comments attributed or avoiding invitations to talk….
Who buys the analysts’ research and how do analysts work with clients? Increasingly vendors and operators have set up analyst research and market intelligence teams that buy all externally developed research and negotiate contracts.
This has largely replaced the old channels, whereby analyst firms sold to business managers directly through their own sales force or through aggregators or sales agents and partners to reach international audiences.
But the development of AR/MI teams means selling and buying research is becoming more streamlined and the relationship between analysts and clients more symbiotic. Corporate AR teams brief and keep analysts updated on company news and respond to their enquiries while MI staff buy the content.
These new specialists are replacing corporate librarians and archivists and require internal departments to buy research through them.
It doesn’t always work. “Analyst firms double- and triple-sell into the same organisation, perhaps selling into different parts,” explains Duncan Chapple, managing director of Kea Company, which was founded in Amsterdam but is now headquartered in London. “It is not difficult to shop around and buy information services accurately and assess alternative suppliers.”…
Comparing big and small firms is complicated because they have different strengths and weaknesses and smaller companies tend to be specialists. Although unwilling to do it publically, it is the job of AR teams to rate individuals and firms according to several criteria including integrity, independence, foresight and accuracy.
“Analysts are as varied as research firms and are changing from verifying facts to advisory services. There are very different perceptions of how independent and ethical analysts are: research is not often very terrible even if a lot is biased,” reports Chapple at the Kea Company.
“Customers are very savvy and can usually tell how independent research is. Ten or 15 years ago vendor-funded research bordered on the unethical or was branded advertorial. Now analysts get sponsorship but still forbid anyone having a say in what’s written or the results.
“Customers must pick and choose to ensure they have independent, impartial, accurate research. They should compare different answers from different analysts — a practice encouraged by market intelligence people — but business managers want large strategic deals with one very large analyst company, which pushes M&As in the market.”…
Big or small, the effect of analysts is variable. The aim of research is always to be accurate, credible and at least one step ahead of customers, to explore the short, medium and long term view of technologies and their regulatory and socio/political implications.
Customers expect a high level of strategic thinking and understanding of what will benefit their business and industry and in what ways both are changing.
“Our analyst value survey shows that the top issues for telecoms and networking people are broad challenges like cloud, outsourcing, big data and security. That’s why generalist analyst firms are now more influential than telecoms specialists,” believes the Kea Company’s Duncan Chapple.
Most agree that independent research, supported by statistical data and thorough market knowledge, regularly indirectly influences the actions companies and even governments take.
However, the extent to which analysts’ work directly influences corporate decisions is difficult to quantify. There is evidence it may directly affect procurement and M&As, whether corporations invest or not in countries or companies and which particular vendor to use and for what.
Research may support corporate re-branding, refocus products and help companies define strategies and five-year plans.
It can liberate them from an over-reliance on technology vendors, making it easier to define their own strategy and may influence trends.