Software // Information Management
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9/23/2009
12:41 PM
Tony Byrne
Tony Byrne
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The Vendor-Analyst Echo Chamber Game

Had a nice chat with an old acquaintance who has served as both practice lead at a major technology analyst firm and as head of "analyst relations" for a major vendor... We talked about the conflicts of interests when analyst firms consult for both buyers and vendors... and we also discussed a related issue that strikes me as potentially more insidious...

Had a nice chat the other day with an old acquaintance who previously held two interesting jobs: as a practice lead at a major technology analyst firm, as well as heading up "analyst relations" for a major vendor. This is not uncommon; there's a revolving door between staff at vendors and analyst firms.

We talked a bit about the institutional conflicts of interests when analyst firms consult for both buyers and vendors -- a primary frustration that drove him out of his analyst firm as well as me to found CMS Watch. (It's topic Alan has already plumbed here.)

We also discussed a related issue that strikes me as potentially more insidious for buyers. My colleague pointed out that software vendors typically don't spend money with analyst firms to bribe them outright. Rather, they purchase attention through which they can try to get an analyst to define the marketplace and customer challenges according to that particular vendor's approach.It's the vendor-analyst echo chamber game, designed to manufacture artificial demand. I've seen it first-hand. The script goes like this:

  • Vendor develops some functionality, acquires some technology, or rebrands their offering in a way that they believe is a game changer. Let's say they introduce something like "services-oriented content management" or "SOCM."
  • Vendor then briefs analysts, including CMS Watch, on how SOCM is next great thing in enterprise information management. (We always ask for a real demo, and funny how those don't always materialize...)
  • Major analyst firm publishes articles and advisories on the critical importance of SOCM, hinting gravely that every CIO worth their salt better be preparing a SOCM strategy. This isn't a vendor-paid white paper, mind you. The game's more subtle than that.
  • Vendor then goes to market with SOCM offering, modestly (but disingenuously) citing major analyst firm to justify the validity of a SOCM approach
  • Enterprise customer invests in vendor's vision of SOCM, which customer's tech team discovers is just a bag of parts. Unanticipated time and money gets spent to realize any value.
  • Major analyst firm with fresh vendor client subsequently comes out with new and better approach, called "agility-oriented content management."
  • Customer executive opens next weekly meeting inquiring about "our AOCM strategy."
  • Rinse and repeat.
You might draw some parallels here with public relations. After all, doesn't the trade press get influenced the same way? I think there are two differences. First, in most of the world, there isn't money changing hands in media relations. Second, most media outlets are transparent about the source of their information and typically don't parrot vendor pitches as original analysis or broader marketplace trends. Sure, we've all seen reporters get manipulated, but it's more the exception than the rule.

If you sense some anger here it's because I've seen enterprise teams suffer as a result of this game. One of the larger boondoggles in this regard was the promotion of "Smart Enterprise Suites" ("SES") earlier this decade, when companies were encouraged to consolidate all their content management initiatives on a single uber-platform. Today you'd think that's crazy, and if you're a Web site manager you'd pale at the prospect of having to manage Web content via the corporate document management platform. But many enterprises went down that path, and paid a steep price for it.

In the end you can't blame vendors or analysts. It's their game, not yours. You have to take responsibility for your technology buying decisions.Had a nice chat with an old acquaintance who has served as both practice lead at a major technology analyst firm and as head of "analyst relations" for a major vendor... We talked about the conflicts of interests when analyst firms consult for both buyers and vendors... and we also discussed a related issue that strikes me as potentially more insidious...

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