Is this the new reality of the analyst business?
Duncan says Internet underpins analyst influence on mid-market.
RedMonk’s position in this research from HFN-Analyst Relations is pretty incredible when you look at it, especially considering many of our readers are using RSS and Feedblitz emails rather than redmonk.com. Or perhaps we’re just benefiting from inbound linking, being part of the conversation… rather than putting up a 50 foot garden wall.
There is really only one narrative to call out based on the data, which is that a three man firm is driving levels of web influence comparable to Ovum, which just announced its IPO.
I don’t know anything about the methodology but I really like the graph. We’re at number 14. Pretty cool huh. You would expect this distribution to look a bit more like a Long Tail, wouldn’t you? But evidently Gartner, contrary to Duncan’s assertion, is not turning its influence into greater shareholder value: if it was it would be pulverising all the rest of us, and we’d be in the long tail with Gartner and Forrester as the short head. If you own an industry but don’t dominate on the web you’re potentially in big trouble. It will be interesting to check out the data again in six months, now we have Cote onboard…
Jon Collins says:
March 7, 2006 at 6:49 pm
Good on you!
ARonaut says:
March 7, 2006 at 7:32 pm
Impressive indeed, nice to see this.
Anne Zelenka says:
March 7, 2006 at 9:47 pm
Yes, very impressive showing for Red Monk. Glad to see it.
People Over Process says:
March 7, 2006 at 10:22 pm
A Whole Bunch of Little Stuff
Today’s proved to be an exciting day so far: I caught with an old friend from the Mesa/FX days, John Arley Burns. It turns out he’s had a lot of experience in his current job testing out open source systems…
tecosystems says:
March 8, 2006 at 12:14 am
The Internet and the Analyst Business
Analyst Influence Originally uploaded by RedMonk Red. A while back – in January, to be precise – Friend of RedMonk Brenda Michelson posed in a comment what I thought was a very good question. In a post of mine…
Dennis Howlett says:
March 8, 2006 at 4:52 am
And you haven’t talked about relative profitability. Now THAT would be an interesting analysis…
James says:
March 8, 2006 at 1:04 pm
How was this graph calculated? Was it by asking customers in large enterprises? Was it quantitative?
Duncan Chapple says:
March 8, 2006 at 5:15 pm
James,
Please take care not to misrepresent this research. The notion that this shows “influence” is yours, and is not the interpretation that either I nor the researchers at HFN have of the data. The data simply show web traffic. This is not the same as influence on buyers, and the correlation between the two is as strong as the correlation between voting at the UN and being a superpower.
Lighthouse conducts CIO surveys to research the influence of analysts on sales. The results are different.
I assume your point about Gartner failing to capture shareholder value is a joke… its share price is growing strongly.
Duncan.
PS Thanks for mentioning that the research is HFN’s. Not everyone has had the grace to do so.
james governor says:
March 8, 2006 at 6:00 pm
Duncan – look at the title of your blog. Reread your blog. If confusion has arisen I would argue you may have contributed to it.
Please don’t use ad hominem attacks on my colleagues. You went a bit beyond the call of duty there, in my opinion. how can you plagiarise someone by pointing at their work?
I am willing to say the data says very little about influence broadly, and certainly specifically your CIO sales-based methodologies, in which RedMonk probably scores very poorly. We happen to think there are other constituencies with influence outside the CIO’s office.
but the chart does say something about web influence. Quoting you:
“Last week I saw some research by HFN which assesses the importance of IT research companies by making use of publicly available data…
.. This analysis is based on the visits to their external websites. Since almost all client access of research is online, and since the research of many non-clients also runs through analysts’ websites, this measure is an excellent start to any analysis.”
It says something about web traffic. I am inclined to say you talking it down here is a bit odd.
The Gartner statement was not intended as a joke. I see shareholder value as a long term trend, rather than something that spikes in a quarter. So we’ll see. I personally think they will have to do more in the web space.
I realise the instrument is blunt, and its not clear what it says, but it says something.
tecosystems says:
March 8, 2006 at 7:18 pm
The Internet and the Analyst Business
Analyst Influence Originally uploaded by RedMonk Red. Update: In the comments to this piece, Duncan Chapple has noted that I didn’t provide a link back to the original source of the chart that he featured on his blog, which…
tecosystems says:
March 8, 2006 at 8:47 pm
Responding to Duncan Chapple
I’m not quite sure what to make it of it – and maybe you all can help me parse this, but yesterday’s post on Duncan’s post seems to have struck quite a nerve. It’s not too often that I become…
tecosystems says:
March 9, 2006 at 7:22 pm
The Internet and the Analyst Business
Analyst Influence Originally uploaded by RedMonk Red. Update: In the comments to this piece, Duncan Chapple has noted that I didn’t provide a link back to the original source of the chart that he featured on his blog, which…
ARonaut says:
March 10, 2006 at 11:34 am
Now, this is getting amusing -keep going guys!
Stephen’s answer is even longer than yours, Duncan also answered -wow, this is becoming a great blog-flame.
Duncan Chapple says:
March 10, 2006 at 12:26 pm
Hi James,
Thanks for the suggestion that I clarify my views.
Reader might like to know that I’ve put a comment on Stephen’s blog about my comments there. I’ve also expanded my comment on my orginal post, and on a follow-up post at http://analystrelations.blogspot.com/2006/03/why-free-research-wont-kill-high-value.html
Forrester and Gartner have performed well on the NASDAQ. Compared to the NASDAQ 100, they have performed better than average over the last six years, and especially well over the last year. They are trading at 40 times earnings and have delivered profitability year after year. That is more than a quarter. Since, fundamentally, these are not especially exciting businesses we have to admit that these are delivering substantial shareholder value. When your firm or mine become worth 40 times earnings, then we can start to joke about shareholder value.
Duncan.
james governor says:
March 10, 2006 at 2:49 pm
Like i said before – I wasn’t joking. I don’t see Gartner as a good long term bet for value investors.
Duncan Chapple says:
March 11, 2006 at 10:51 pm
On that we agree: Gartner has been a better pick for growth investors, not value investors. There are two principal investment strategies: one focussed on growth [firms that will generally over-perform the market, and therefore tend to develop stock prices far in excess of that suggested by their earning] and other other on value [firms that are currently undervalued, and therefore tend to have stock prices lower than that suggested by their earnings]. However, I was simply making the point that Gartner and Forrester have been the only firms that have delivered substantial shareholder value so far. I thought that was point you disagreed with. In terms of future performance, I am not as confident as you in predicting long-term trends.
Duncan.