Infrastructure // PC & Servers
Commentary
5/23/2006
03:07 PM
Alice LaPlante
Alice LaPlante
Commentary
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IT Analysts Duke It Out In Cyberspace. So Why Should You Care?

Pay attention: There's a free-for-all happening among IT analysts. Currently controlled by a handful of major analyst houses--which suck up 80% of a market that rakes in $2 billion a year in revenues--the industry is being turned upside down by a swarm of upstarts that are using blogs, podcasts, and open online forums to propagate their opinions about vendors, technologies, and products. So why should you care one iota about this turf war?

Pay attention: There's a free-for-all happening among IT analysts.

Currently controlled by a handful of major analyst houses--which suck up 80% of a market that rakes in $2 billion a year in revenues--the industry is being turned upside down by a swarm of upstarts that are using blogs, podcasts, and open online forums to propagate their opinions about vendors, technologies, and products.

So why should you care one iota about this turf war?Because as Larry Greenemeier points out in his article this week, what leading IT analysts say about technologies and vendors matters. It matters a lot. It shapes what your company buys, for starters. It shapes your organization's long-term IT strategies. It can lead you to IT nirvana--or down the garden path, with disastrous results.

Perhaps most importantly, the analyst community shapes the future direction that technology takes. As Greenemeier reports, many vendors simply won't go ahead with development of new products without first consulting one of the big research houses such as Gartner, Forrester, or IDC. Now that's power.

All the more reason to celebrate the fact that a significant challenge to the old order is under way. These young Turks (a misnomer, as many of them are in their 40s and 50s and beyond) may just be what we need to keep the traditional analysts on their toes--and to push them to be more transparent in how they make their very influential proclamations.

To get more background, go and take a look at the original article written by Greenemeier and Paul McDougall back in February on the credibility of IT analysts. In the piece--which caused an absolute furor in the analyst community--the writers point out that the advice provided by leading analyst firms, although unquestionably valuable in many cases, needs to be treated with caution. At issue: Such firms rake in millions providing services to the very same companies they monitor. Perhaps--as Rob Preston pointed out in his blog--it wouldn't hurt to have legal or regulatory safeguards in place that would force analyst firms to separate their content and sales organizations, much like financial services are now required to build walls between their investment banking and research practices.

Actually, with this new force in the marketplace, maybe that won't be necessary. Although I have (serious) reservations about a free market philosophy applied to everything that moves, the influx of serious independent bloggers into the IT research sphere is an excellent thing and may just solve many of the problems with the way things currently work.

I should say that when researching an article, I always go to my rolodex and pull out analyst names I trust. I truly value the insight they provide. Even so, I'm delighted to now have access to the opinions of rule-breakers such as the guys at Red Monk and Dennis Howlett, who can be expected to continue shaking up the analyst community for some time to come.

I'll close by pointing you to a couple of amusing graphics that satirize the famous (or infamous) Gartner Magic Quadrant. The first was published by Nate Orenstam on the Valley of the Geeks.com Web site and depicts a Magic Quadrant that places such important industry figures as Bill Gates, Bilbo, Ringo Starr, Dementors, and Richard Nixon in relationship to one another.

The second is from Dean Goodermote, of ABS Capital Partners, who provides a send-up of how companies...uh, massage...facts in order to look good on such charts.

What do you think? Does your company rely on established industry analysts to make important IT investments? Have you investigated any of these new bloggers who put their often-irreverent opinions out for commentary? Let me know by responding below.

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