Zona Research: From The Ashes

If the phoenix could rise, renewed, from the ashes, Harry Fenik says he and his team can, too. The former executive VP of Zona Research entered the month of July thinking that the firm was on track to turn a profit in the next few quarters. Then the bottom fell out. Millward Brown, the advertising research firm that owned the IT research firm, unceremoniously shuttered Zona this summer, to avoid financial exposure in the troubled IT sector.

"We had gone through a quarter or two of sheer panic early in the year, but in the last couple of months we were in existence--June and July--there was a resurgence of activity and we thought we had found the bottom and were coming back quite smartly," says Fenik. When word came that the firm would be closed, Fenik says that all he could feel was shock. He remembers muttering to himself, "Gee, this is kind of weird."

But Fenik and his team were accustomed to thinking on their feet. Within days, they had formulated a plan to rebirth Zona as a new analyst firm, Sageza Group, that would serve Zona's existing customers and go after new ones, providing research on topics as far-reaching as the role of application service providers and business in a 24-by-7 marketplace.

The business plan, for now, calls for the Sageza Group to set up shop some time in early September, with most of the 15 analysts from Zona onboard. Millward Brown will play a role by paying the Sageza Group to service clients who had contracted for Zona services. Still to be determined is how the Sageza Group will move forward when companies are tightening their belts on IT expenditures, and differentiate itself from other analyst firms that are hard-pressed to make a profit. The 15-person firm can't cut analysts to lower its costs, or it will be unable to offer its customers any level of service.

One thing is for sure, though, says Fenik, president and CEO of the new firm: Analysts will spend more time in clients' offices discussing their needs, and less time in Sageza's office. The corporate attitude will be "young and feisty," independent, with a strong voice, beholden to no one, he says. Says Fenik, "Clients more and more are going to want us to take our outside-the-box viewpoint and apply it more directly to their businesses."