Monday, June 04, 2007

Gartner Group Is Irrelevant

There is an interesting discussion going on about the influence (some say declining influence) of the leading analyst firms. Is Gartner Group becoming irrelevant? How about Forrester, AMR Research, Aberdeen?

I remember my time working at MBS...waiting for the next Magic Quadrant to come out and watching the press releases from us and from the competition, each company making sure everyone knew that they made it into the leader quadrant. That used to matter a lot. Does it still matter?

A lot of this discussion centers around what some call flawed business models. The analysts tell you they are producing content that is aimed at helping the end buyer understand the market and the capabilities of various software vendors. They typically will not go on to tell you that they get the majority of their revenue from contracts with those same vendors, creating an obvious conflict of interest. Brian Sommer asks

If you knew your analyst firm got over 10% of its annual revenue from a large ERP vendor (e.g., SAP) would you rethink their recommendations? Don't you think they have a responsibility to inform you of this material fact? Many analyst firms get the majority of their revenues from vendors not corporate IT buyers. Do you really think they'll write an adverse report on a firm that could devastate their financials? No - they won't.
Brian references an earlier post by Vinnie Mirchandani, himself an ex Gartner analyst. It's worth a click through to Vinnie's site for the conversation that followed his original post. It includes a current Gartner analyst coming to his firm's defense.

I've just enjoyed reading the commentary on this topic but have not joined in the conversation because until a couple of days ago I did not have anything to add. I don't think these firms are irrelevant (despite the title of my post - a blatant attempt to get you to read on), but I do agree with Sommer, Dennis Howlett, and others that their reports carry less weight than they used to in terms of influencing purchase decisions.

I think Mirchandani is on the mark when he says

> In the 1970's when CIO's wanted to know what to buy, they asked IBM.
> In the 1980's when CIO's wanted to know what to buy, they asked Andersen Consulting.
> In the 1990's when CIO's wanted to know what to buy, they asked Gartner.
> In the 2000's when CIO's want to know what to buy, they ask each other.

Now here's my two cents. I've recently had the most remarkable exchange with the people at Aberdeen. In a post last week I referenced Aberdeen's glowing report on SAP's presence in the SME market, a report that to me reads like something produced by the marketing department at SAP. Aberdeen tells me they don't do opinion and ranking of vendors like Gartner or Forrester. Their stuff is just based on reporting the facts. Not possible. Even if opinion is not overtly present in a piece of reporting or an analyst report, it shows up by way of what does not get reported, or the questions that don't get asked, or the other side of the story that is not included. I think I asked some pretty obvious questions in response to Aberdeen's SAP piece. Delving into any of them might have made for a less favorable report.

But here's the big problem with Aberdeen's model. I was asked about the SAP in SME report by one of my clients who happens to be a Microsoft Dynamics reseller. The reseller provided me with a link to the report, I included a link to it in my email reply and on this site. Apparently I cannot do that, even though the report is freely available on their public website. What's more, it would have been improper for me even to just point you to and suggest you do a search on "SAP".

Why? Aberdeen writes their reports "for the end users", and in their world application resellers are just like like a vendor, and so am I when I'm working with them, and so are you if you reference the report for any purpose other than evaluating software for use in your firm.

You see, Aberdeen considers any reseller or ISV that exists around Dynamics (or any other vendor's products) to be an extension of that vendor, meaning such companies need to license the report, just to refer to it. If you find something in an Aberdeen report that you think you'd like to reference in conversations with a client or a prospect, you are now using the report as part of your marketing strategy and must first license it. Copying the report content without permission, I can see that being an issue...widely distributing the PDF, sure....but just mentioning it exists and emailing a public URL? Really?This is just flawed on so many levels.
  • Linking or just mentioning the report requires licensing it first. Why create barriers that prevent people from making others aware of your publicly available content, which you say is free to software buyers?
  • Considering resellers as an extension of the vendor. I've got two issues here. First, it ignores the fact that many resellers do a great job of consultative selling. They often carry multiple products and will recommend whichever is the best fit for the prospect. The good ones will even walk away or suggest a competitive product if it's a better solution for the client. Second, related to the first bullet point, this audience can probably create more awareness for your firm and its research than any other audience.
  • Trying to police the proliferation of your content is a useless endeavor. In today's internet, always connected, social web environment, there is simply no way stop it. Especially if all it takes to get it is a URL, not a password or other login credentials. You've got online discussion forums, independent bloggers and analysts, etc. Per my conversation with Aberdeenl (and I repeatedly asked to make sure I understood this correctly) any linking or mention of report in any of these places by someone other than an end buyer is a violation of the license policy.
  • Aberdeen wastes resources trying to watch this. I asked how they could possibly hope to avoid their content being "distributed" by individuals providing the URL or just mentioned that its available. I was told they have some people that watch this kind of thing. I understand paying attention to what the actual vendors, your source of revenue are doing. But trying to monitor and control what resellers or bloggers do? What a pointless waste of time. They haven't the slightest chance of ever keeping up. How about tasking that staff instead with producing more good content?

My advice to Aberdeen...either lock down the content on your site, or turn everyone but the vendors loose and let them freely "distribute" the content. If you lock it down, you can still provide free access to buyers, they'd just need to complete some registration first. In this situation when resellers or other entities license the content you could give them a code or unique URL they can provide their prospects for them to get directly to the reports.

The far better option is to just recognize reality and go with the second option. Allow resellers, bloggers, etc to talk about or point to your reports. Tap into these very effective channels for increasing awareness of your company and its products. Stop trying to adhere to a restrictive licensing policy that simply does not work when you are making the content freely available on your website.

I'm not holding my breath for any quick changes in business model here. In the mean time I need to think differently about how to respond to questions on Aberdeen reports. For now, I guess I better tell you that it is inappropriate for you to follow this link on the public Aberdeen website to read the SAP in SME report. Further, you should not go to and search for "SAP in SME" to find the same report.

Instead, I must tell you that regarding the SAP in SME report....“To license the full content of this report, please contact Aberdeen Group at or 617-723-7890.” That is, unless you are an end user looking to buy software from SAP. Then by all means go to Aberdeen's site and get the report. Just don't tell them who sent you.

No comments:

Post a Comment