How analyst relations grew up in the 1990s

While firms like Honeywell and IBM had developed analyst relations earlier, it was the 1990s when AR became a major marketing expense for high technology vendors. This October 2003 training note by Duncan Chapple summarises the rapid change in the late 1990s.

Agencies like SSSmith & Associates, Parallax, Lobsenz-Stevens Associates and Kensington Group were the first, but it was the large US vendors who developed the depth. IBM, Infonet, Novell, HP, Sun, ILOG, Oracle, Lotus, SSA and Forte, who came first. In 1996, the first firms appeared where analyst relations was one of the two or three largest marketing expenditures. ”The opinion of industry analysts carries great weight with potential customers” reasoned Bernie Borges, VP-corporate marketing at Verticent. Originally called PowerCerv, the firm spent 50% more on analyst relations than on media relations or channel marketing. Other growth firms started to use AR at that time as well: RAM Mobile Data, Stratus and, in 1998, AR started to cross the Atlantic. Software AG became the first European software firm to appoint an analyst relations director in the US (Chris Bradley) while IBM allocated AR responsibilities to a team in Paris.

Analyst relations programmes were becoming major initiatives with global hierarchies at firms like IBM, Comdisco and Nortel Networks. Computer Associates appointed a Vice-President of Industry Analyst Relations, David Hood. With the growth of the internet boom, the focus started to turn away from analyst relations as a way of influencing customers and towards using analysts to support media campaigns and to validate market growth projections. Firms like Peoplesoft, Proflowers.com, and Skybridge started to package AR into their public relations programme.

In 1999, Lucent passed a special milestone: the first major vendor to open press release headlines with the name of an analyst house. That was the year when the news was that “Frost and Sullivan Ranks Lucent Technologies as the DWDM Market leader”; the following year, “Dell’Oro Group Ranks Lucent Technologies No. 1 in Global DWDM Revenue”.

By then leaders like 3Com, Cisco Systems, Compaq, Ameritech, Sprint, Bay Networks, and Nortel were starting to get crowded by upstarts also angling for analysts’ attention. Televideo, Best, Relativity, Symantec, J.D. Edwards, Commerce One, Dazel and others started to focus on AR. At this time AR started to grow seriously in Europe: Alcatel, SAP, Business Objects all appointed AR managers. The following year, Alcatel was to follow Software AG’s lead by appointing an AR manager in the US.

These developments prompted the major vendors to make the next step function. Firms like Novell developed analyst extranets and knowledge management systems. The first product division started appearing with their own AR programmes: HP OpenView and NCR Teradata.

As analyst relations processes stabilized, firms like Lotus started outsourcing its analyst relations to public relations firms. By 2000, two global PR agencies had senior counsel for industry analyst relations: Helen Dragoon at Shandwick and Duncan Chapple at Brodeur. Vendors that could not justify specialized AR resources at least started to add explicitly it into the to-do lists of their media relations teams: CSC, Altus, Ontrack and Vignette, for example.
By then some firms had established themselves as the state of the art in analyst relations. The standard was set by leaders in the telecoms market where the stakes were the highest: Cisco Systems, Nortel, Qwest, Sprint, Intel, Lucent, Fore Systems and U S West, Intel, Fore Systems and 3Com.