The resignation of Gartner’s research chief, Peter Sondergaard, under the cloud of ethics complaints, is an opportunity for Gartner clients to assess any ethical or competition issues in their relationships with analyst firms. In particular, organisations which do business with clients in the European Union need to assess two risks: actions which could appear to have a quid-pro-quo impact on Gartner, and uneven disclosure.
Sondergaard’s departure is a real loss for Gartner. He is both a sharp-minded industry analyst and the confident showman Gartner’s event audiences love. Those of us who have worked with Sondergaard have found Peter to be consistently respectful and above board in every way, so the departure is surprising. Within the last week, Gartner Symposium and ITXpo page posted a graphic naming Peter Sondergaard as a lead speaker.
A week was a long time for Sondergaard
The suddenness of the departure shows how quickly risk can mature. It’s a good opportunity to bring a focus to the ongoing discussion, about how honest and objective analyst firms are. Many firms mistakenly spend with Gartner in the hope that spending alone will help them to get in the Magic Quadrant. While you can’t do that, spending with analyst firms clearly has advantages. Vendors can learn to be like a chameleon with analysts: using client access to present themselves differently to each firm, and more like each firm’s ideal vendor. Analysts also get to know their bigger clients better and influence vendors’ decision. If they take analysts’ advice, they should look more like what the analysts are looking for and, in turn, perform better. Perhaps most importantly, happy account managers do a lot of the heavy lifting for vendors, in particular by alerting clients to opportunities and facilitating access. There’s no Gartner contract for buying influence, but influence is certainly easier for clients who can, for example, use inquiry sessions to increase understanding and alignment between vendors and analysts.
Vendor spending shapes the analyst market
Everyone wants a simple life. It’s no surprise that account managers from top firms have willing accomplices when they push the story that only the big analyst firms matter.
The basis for an opportunity
- First, a key driver of monopoly power is what my professors here at the business school call excess absorptive capacity. Firms have this structural ability to be ‘excessively’ ahead of the competition in its alertness to innovation. By absorbing time and money that could be spent with competitors, the major analyst firms solidify and deepen their advantage by keeping smaller analyst firms outside the loop.
- Second, to maintain the oligarch firms’ success in maintaining this excess, vendors’ budget and analyst relations effort is allocated to them beyond the level implied by the analyst value they create for users and the influence they have on the buyers.
- Third, a substantial competitive advantage is available to firms who allocate their resources to those valuable analysts who are relatively open to influence. Hunting for department store bargains in the first hour of the sale is a brutal, unsustainable game. Similarly, building deeper relationships with analysts than your competitors takes fewer resources than trying to out-spend them at Gartner and Forrester.
So, there are both ethical issues and operational issues that vendors need to weigh up. Sondergaard’s departure may have little impact on your firm, but you can productively use it to stimulate a long-overdue discussion.
PS A follow-up piece is available at https://www.influencerrelations.com/7120/after-sondergaard-analyst-firms-must-take-stock