The analyst industry always benefits from choice, so everyone welcomes the launch of Constellation Research – even the founder’s previous firm, Altimeter. However, Jonny’s claim that it’s automatically a tier one firm has to be taken with more than a grain of salt. Ray Wang’s departure follows that of Martin Gartenberg, so it seems reasonable to muse that Altimeter is not attracting enough interesting and lucrative clients to retain such big-ticket names. Superstars do not spontaneously generate super-sized revenue.

Constellation is a group of ten independent analysts using a broker: a common go-to-market brand. That’s a good strategy, since analysts often don’t sell well. Using a common sales process, a broker such as Constellation or Valley View Ventures (which represents Altimeter) can win extra profile and extra sales.

However, the participating analysts remain affiliated with their individual firms. Broker organisations are often not the analysts’ main concern. While analysts will invest time into specific new business opportunities, it seems unlike that Constellation will do what a real analyst firm would do:  allocate clearly defined focus areas (eliminate areas of overlap and thus expand the scope of topics on which the firm can deliver research and guidance) open and close focus areas (reallocate analysts, against their will if needed, between areas of falling and rising demand) and develop consistent methods (research methodologies, base data and deliverable formats). Instead, Constellation’s analysts overlap in multiple areas, such as innovation, 2.0 technologies, social business, and ERP.

If Jonny thinks that Constellation is a tier-one firm, then Valley View Ventures must be tier-zero and Gartner must be tier-square-root-of-minus-one.

That said, there is some reason in what what Jonny is saying. Constellation will be quite unlike Valley View Ventures in so far as it blurs the line: it presents itself as a research firm rather than a broker. It will also provide syndicated research, so you can (I imagine) subscribe to one content management system and access the research of all the analysts. That will be valuable research and if they are able to invest and grow their sales campaigns then they will be much more successful together than these analysts are currently apart. However the narrow scope of the analysts’ research areas and the notable overlaps means that they are not a substitute for the real tier one firms, which have the full-time energies of several hundreds or thousands of employees, rather than the spare-time support of ten people working in other firms.

P.S. For an alternative viewpoint, look at Barbara’s comments. She quotes Altimeter’s Charline Li as saying that the firm has “touched 125 clients” this year. While I’m not sure that’s the same as 125 invoices, Barbara’s suggestion is that analysts who have left Altimeter do so because they prefer syndicated research to consulting.