Why vendors hire analysts

Last October, after Hyperion hired Howard Dresner, we asked what happens when a competitor hires the analyst who follows your firm. Generally, not many analysts want to move into an analyst relations role (see Richard‘s comment) and not every analyst thinks former analysts make good AR people (See James’ opinion). So it was no surprise when Howard ended up leading Hyperion’s strategy rather than running analyst relations.

After my post yesterday mentioning that Hyperion is hiring for AR in the US, I’ve also had a note to tell me that a second Gartner analyst has decided to join Hyperion, this time in Europe (I’ve asked him for a comment). Despite Richard and James’ comments, it’s hard to see how this is not going to work better for Hyperion than for its competitors, or indeed for Gartner.

  • Analysts know competitors’ product plans. While many analysts will ask to not be told what they cannot repeat to clients, it remains the case that analysts clearly have a deep pool of knowledge about the roadmaps of the key players in the market. Of course, vendors often sell to similar buyers, so their roadmaps tend to converge. In this respect, analysts’ minds have to work like video compression algorithms: focusing on the differences rather than the similarities.
  • Analysts know competitors’ channel and marketing strategies. This information is probably more valuable than the product roadmap. Most vendors are not ‘firing on all cylinders’. Most analysts understand that go-to-market tactics are they key to success. Former analysts are very well placed to explain these tactics for maximum effect.
  • Analysts make good thought leaders. Many AR managers are not encouraged to develop the market and solution knowledge needed to act like spokespeople. Analysts don’t have that problem. A Gartner analyst will have gone through similar experiences to other analysts and will be better placed to convince other analysts.
  • Analyst houses have defined ethical conflicts to a minimum. Gartner, and other analyst houses, have rather different rules for how to eliminate ethical and professional conflicts during analysts’ transition periods. However, because it is quite normal for vendors to hire analysts it would be rational for analysts to think about their professional opportunities before they start looking for work. An analyst following vendors X and Y might see that vendor X hires analysts and uses analysts for consulting and client engagements; but note that vendor Y does not. In this circumstance, it would irrational for the analyst to antagonize vendor X, and it might even be wise to be critical of vendor Y.
  • Valuable informal contacts continue. I read recently that the US legislature voted to bar former law-makers from the gym and social spaces they traditionally have been able to share with current parliamentarians. Few analyst houses keep an eye on informal contact. Lighthouse once came close to renting space in the same building as an analyst house (it was good value); even though Lighthouse isn’t in the business of influencing analysts both we and they realized that it just wouldn’t look right. But few firms comment on or even think of controlling much more interactive forms of informal contact.

Of course, there is one further aspect of this which is very rewarding to Lighthouse: it’s strong evidence that analysts make highly effective contributions to analyst relations programmes. Four years after the company was founded in 1998 we took a major turn towards hiring former analysts and replacing colleagues with a general communications background with either former analysts (for consulting roles and leadership positions) or ‘point’ specialists (for managerial roles running our AR Intranet, courses, finances and so on). The strategy has worked well and, for the meanwhile, puts us in the unique position where a majority of our staff are former analysts. It will be interesting to see if any large vendors adopt the same strategy.

P.S. I had an anonymous email this evening, routed through willselfdestruct.com, which self-destructs the message after 30 seconds. This email names the same Gartner analyst as my other source, but says that this person won’t be in analyst relations but will report to Dresner. Considering our own experience as analysts, which matches Alan’s, we know that strategy often involves speaking with analysts. Let’s wait and see. The email also stressed what a great hire it was for Hyperion and what bad news it was for Gartner. I’m baffled: what sort of person, closely familiarised with the details, and aligned to Hyperion’s viewpoint, would send such an anonymous email? Any suggestions?

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.