Our annual analyst attitude survey for services was launched with a conference call yesterday. Donna Stein, former AR head at 3Com and Lucent, and I gave the key findings of the study to callers from several of the top 30 services firms, whom we profile in the survey.
The services market saw a big change between 2001 and 2005. Before the dot.com boom, the large, ‘pure play’ services firms had the greatest share of voice with the key services analysts. By 2005, of course, most enterprises buy ‘solutions’ that bundle in hardware, software and communications infrastructure. in this new epoch, the vendors that spend the most time influencing services analysts are the ‘powerhouse’ vendors of hardware, software and services: firms like HP, Dell, Microsoft and IBM. These firms are speaking to larger number of services analysts than the big brand services firms, and they are viewed more positively by those analysts.
Of course, those powerhouse firms have more resources, but it’s also the case that they seem to act as if analyst influence is more evenly distributed than their pure-play competitors. I spoke to one of the AR heads of one of the firms we profiled in the study. This person told me, in all seriousness, that their advisor (I’ll leave them nameless) has told them that 78% of the influence held by analysts on this firm’s sales were held by Gartner. Even Gartner would not claim such strength and, for many of the firms I work with, it’s often only half of their sales that are influenced by any analyst, and then less than half of that is influenced by Gartner. Outside the English-speaking countries, naturally, Gartner’s influence is lower still. While the firm I spoke to is focussing a lot of its energies on Gartner, and indeed onto Gartner in the US, that supplier’s competitors are outflanking it by speaking with other influencers, in other countries, as well.
Many of the largest services firms are only really addressing 15% of services analysts worldwide. Furthermore, our research shows that firms like Accenture, BearingPoint and Unisys have much higher profile in the US then they do in the rest of the world. The firms with the best regional balance in their analyst profile are powerhouses like Cisco, Fujitsu, Microsoft and Oracle — all firms that understand the reality of global markets.
There’s another reason why those pure-play services firms might be staying inside the US: because it’s more comfortable for their spokespeople. US analysts seem to expect less candour than analysts outside the US. And vendors headquartered outside the US seem to be much more candid than their US competitors. Our studies show that 70% of an analyst’s probability of recommending a supplier onto a client’s shortlist can be predicted by how candid the analyst finds that supplier to be.
Let’s put that in context: Recent legislation in the US encourages less disclosure. The strongly competitive, emotionally-committed and partisan style of business communication in the US often fails in other countries: US companies often struggle to impress non-US analysts with their openness, honest competitive analysis, strategic analysis and comment on competitors. That’s a huge advantage for European and Asian firms trying to connect with US analysts. Indeed, US analysts now feel more confident recommending firms like Tata, Wipro and Infosys than the pure-play US services firms. While the detailed, dour and direct spokespeople of the Indian-owned services firms give the analysts exactly what they want, the US firms have trained their spokespeople to evasively ‘control, bridge and sell’. Those bad habits will be hard to shake, but even harder to admit to.