There’s nothing paradoxical about the success of the analyst companies over the last recession. The analyst firms are more needed in tough times, and they have worked hard to innovate. However, some of the firms are pushing up against the limits of the value they provide. The stock market has a nose for this, and we think there’s something to learn from the fact that Forrester has done well while Informa has slipped back.
To give a snapshot, we can compare three brands using their shares. In the chart on the left, showing the year to date, we can see Forrester’s strong growth, Gartner’s steady growth and Informa trailing behind.
To get some background, let’s compare come of the big and small numbers, using UK filings as an example. In 2011, the last year for which we have data for all the firms, Ovum Europe (a unit whose revenues are reported separately) grew revenues by almost one third. Plum Consulting grew over 20% and Forrester’s revenue grew just below that. Revenues were stable at Analysys Mason, Datamonitor, Gartner and Informa (a massively complex group of hundreds of companies, in which analysis is a small part).
In a nutshell, almost all the firms are holding steady or they are growing.
What’s behind the firms that are growing in revenue, or in profitability? What are the lessons for the future
– Innovation in value is a key trend. Forrester and Gartner continue to benefit from their role-based pricing. Forrester has an extra boost from the success of its leadership boards. Ovum has benefitted from launching a serious events business, powered by Informa, and by bringing its consultants into its research practices to deliver higher quality consultancy most cost-effectively.
– Quality is being rewarded. Working here in Europe, I hear a lot of discussion about the services offered by IDC, Nelson Hall and Ovum to track spend on services like outsourcing. The highest quality provider is picking up the business.
– The answer is more insight, not more greater volumes of research. Gartner is, perhaps, large enough that it doesn’t need to add analysts. But there’s still an issue with the consistency, accessibility and usability of research. Many firms are still ten years behind Current Analysis’s clear presentation and Forrester’s crisp prose. And volume is a poor substitute. Analyst firms are not expected to produce newspapers, and they don’t need to comment in a shallow way on every development.
These are three key things that analyst firms need to develop, and those that do will make the most of the next few years.