With the news that Gartner is buying The Burton Group today, the topic of IT analyst consolidations is popping up again. While I’ve only been in the analyst world for 4 years now (come Feb 2010), working at a small firm has given me, I wager, more of a view into the machinations of the tiny of IT industry analysis. And, being part of that industry, I’m fascinated by its topology.
The Lay of the Land
On the large end, you have Gartner and Forrester who make their money from selling reports, doing consulting, training, and other events like webinars and speeches. In the middle, you (used to) have firms Burton, 451 and a handful of others. These firms were “larger,” usually ran at least one conference of their own, and tended to be staffed with analyst teams who specialize in one thing, like virtualization or programming. And then there are the “boutique” firms, like RedMonk and firms that are just one or two people. These firms tend to be more about selling consulting time, working on projects, but get into papers and reports at times. The going collective believe is that smaller firms are also more vendor, rather than enterprise (or “buy side”) centric – though I’ve never actually sat down and seen if this was true or not across all firms.
All of these firms center their business around being knowledgeable about the IT world, mostly technology used for business (vs. consumers), as there’s usually more and easier money in it for what they have to sell). They either sell that knowledge to the “buy side” (large companies evaluating, planning for, etc. technologies to use) or the “sell side” (vendors figuring out technologies to make and then ways of getting buyers to, well, buy them).
Quick Analysis
The community of developers whose work you see on the Web, who probably don’t know what ADO or UML or JPA even stand for, deploy better systems at less cost in less time at lower risk than we see in the Enterprise. This is true even when you factor in the greater flexibility and velocity of startups. —Tim Bray, “Doing It Wrong”
The number one question that people have here is how analyst consolidations will effect “the industry” (mainly, IT buyers). The assumed concern is that the bigger, incumbent player in the market will slow down the “good things” that are happening, the evolution of the role IT analysts play. I’m never one to comment on the numbers behind something, so I can’t say much about the “protecting its revenue” and “buy-to-kill” theories – I’m sure other people can fill those buckets plenty.
The main concern with analyst consolidations is to keep encouraging the rise of individual voices over collective, brand voices in the IT analyst world. In theory, the more consolidation, the tougher it is for individuals to rise above models (like the Forrester Wave or Gartner Quadrant). Those models are handy, esp. for quick short-listing, but what I’ve seen over recent years are individual analysts finding their voices and being well received by both buy- and sell-side in new mediums like blogs, podcasts, and Twitter.
“Individual voices” matter because of the past cycles of Big Bang IT, where large firms like Gartner thrive with with their categorization and ranking models (which application server will solve my problem?), have been steadily chipped away by consumer and “bottoms up” technology innovation. This trend started with open source, was stalled by WS-Deathstar SOA, and presently seeing much acceleration from consumer companies like Apple (iPhone), Amazon (cloud computing), and Google (we’re not quiet sure, but they’re doing something ;>) leading technology innovation. Businesses and their vendors are being forced to sort out how they apply those consumer technologies and cultures to “enterprise” settings. It’s not proving easy.
Of late, Gartner has actually started down the path of exposing individual voices – as multi-year subscribers to their blogs will notice – but smaller firms still dominate in this space. Smaller firms tend to be given the freedom to publish and interact with audiences in whatever medium they want, including mediums that aren’t locked behind a pay-wall. As on reporter I talked with today put it, it sounds a lot like the change in “Main Stream Media” vs. The Internet. Indeed, when there are so many new technologies and the urges to use them, the more nimble an analyst firm is, the more help they can be the IT world as a whole.
Of course, we like to think that RedMonk is pretty darned nimble ;> But, seriously, I think you can see that in action in the 2010 predictions we all did.
Most analysts I know from Burton fit along these lines – they’re typically practitioners who still dabble in their field – and the Burton brand has pretty good reputation among IT folks I talk with. Maintaining what Burton has – including its people – will be key for Gartner if the happy path is true: instead of just stop[ing Burton from “nibbling” at Gartner’s heels, they want to inject what Burton has into Gartner to start doing even more analysis of the role new technologies and practices are taking in business’ bottom-line: making money.
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Coverage & commentary from others:
- Or own James Governor – “If I were an enterprise customer I’d be quite happy to see the infusion of new consulting and advisory blood, as long as I didn’t have to pay any more for it.”
- Alex Williams at ReadWriteWeb – “The purchase is another example of how the analyst community is becoming increasingly homogeneous, dominated by a handful of firms such as Forrester and IDC. And it points to a growing debate about the value that companies can receive from analyst firms when there is little diversification in the market. But it also points to the importance of independent firms and individuals that engaging in dialogue through blogs and other mediums.” [Thanks for the RedMonk nod!]
- Sage Circle – “Unlike the AMR acquisition where at the beginning there was significant uncertainty about the purpose of the acquisition (i.e., kill a competitor like the META purchase or expand the business like Forrester’s JupiterResearch buy), the acquisition of Burton appears to be in the “expand the business” rationale. As we mentioned in our 2010 prediction, Burton has a solid reputation, large enterprise and government clients, research in attractive and complementary areas, and an established sales force. This point-of-view has been reinforced by Gartner already sending all Burton analysts offer letters to stay with the combined firm.”
- Robert Westervelt at TechTarget – a nice wrap-up of other medium and large firms and past analyst acquisitions.
Disclosure: see the RedMonk client list for any clients related to the above.
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