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 I’ll do right now. The chart is courtesy of HFN, and apologies to them for the omission.

Update 2: In his further response to this piece, Duncan has rescinded and apologized for some of the criticisms in the comments below and asked only that I clarify one particular remark, which I have done. The previous comment is struck, and is replaced by the preceding sentence.

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 on open source analysis, she asked the following:

As you know, i tend to provide a good deal of “free content”. my blog, free downloads, syndicated sites etc. readers (as you well know) like this. and i like it because it creates a wider reaach, and more opportunity to interact, which as you say promotes learning all around.

what’s interesting though – and a little mind boggling – is that large buyers (let me second the “we need to get paid”) still have a tendency to measure “influence” in paid subscriptions, not reach/readership. this seems a little outmoded to me – especially with so much really good free content readily available. i was just wondering if this is something you have run into? and if you are seeing shifts in buyer behavior?

of course, all this presumes the free content is good content!

Given that I’ve worked for large enterprises only indirectly as a systems integrator, I can’t say that I have tremendous insight into what their thinking is vis a vis reach vs paid subscriptions. If Duncan Chapple is to be believed, however, they don’t care much about what folks like us have to say (with notable exceptions, of course):

Larger organisations tend to pay more attention to industry analysts than do smaller organisations, partly because they have larger budgets for buying technology. Furthermore, larger businesses pay most attention to the three or four most respected analyst firms.

Again, I can’t speak with any authority as to what the buying tendencies are within large firms, but I can say that our experience reflects Brenda and Duncan’s assumptions; after investing a fair amount of energy our first year or two into winning enterprise customers, James and I have devoted very little time to them (from a sales perspective, that is – we still talk to them as extensively as ever on an informational basis) in the past year or two because they seemingly had little appetite for opinions that didn’t have a big Gartner or Forrester stamped on them.

All of that is, of course, their perogative. I happen to think that we have some insights worth listening to, and the success we’ve seen in other areas seems to validates that opinion, but at the end of the day the burden of proof is still on us with respect to the value we bring. Unless, that is, we can get in the side door using other means. Which brings me back to the chart that triggered this post.

For a while, I’ve been curious about the degree to which the internet – and the removal of barriers to entry such as paywalls for content – would begin to have a discernible impact on perceptions of authority and relevance. In this post, I discuss how in many respects Google’s become our sales force. You can see the same thing in action on a variety of keywords – if you head to Google and type in ‘IBM Gluecode M&A’ the first link that should turn up is this one (at least that’s the case at press time). I’m certainly not contending that this authority is deserved in every case – I’m the completely undeserving #3 hit on Google for ‘which is better, verizon or cingular?,’ as an example – but hell, I’ll take it.

I’ve known for a while, then, that at least as far as the great big interweb is concerned, RedMonk is worth paying attention to. [1] What I didn’t know was whether or not that matter in the context of enterprise buyers. According to Duncan, however, it matters at least to the less conservative midmarket buyers. As his chart (inset) breaks it down, the 13 firms more important than RedMonk are According to Duncan, however, most midmarket IT buyers search for free research online. As HFN’s chart (inset) breaks it down, only 13 of the 38 firms they researched have more web traffic than RedMonk:

1. Forrester
2. Gartner
3. Jupiter Research
4. IDC
5. Frost & Sullivan
6. Datamonitor
7. AMR Research
8. Aberdeen Group
9. Ovum
10. In-Stat MDR
11. Harte-Hanks
12. Yankee Group
13. Current Analysis

In case the importance (as far as RedMonk is concerned) of this list is not immediately obvious, let me remind those of you following along at home that we are three people. Three. And we’ve only been three for about a month, for most of our existence we’ve been two – yet our web influence is counted as comparable with much older and larger firms. Here’s how James breaks it down:

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.

The only thing I’d add to that is that this is interesting as a general metric, but IMO, within certain important constituencies (you can probably figure out which) we’re doing a lot better than 14th. IMO, mind you.

It’s important to note, of course, that not only do we not know the methodology, this graph is based on Alexa data which is an approximation. It’s even possible that it might be selling us short, given that at least 1200 of you never even visit redmonk.com/sogrady, preferring instead to pull the feed straight from Feedburner every day.

All that said, however, I (unsurprisingly) like this graph and feel fairly confident that our aggressive openness and transparency is granting us influence that frankly would have been impossible to come by three or four years ago, before we were bloggers, before we cultivated a community, and before we were fully open with our content. What impact does that have on our business? Too early to say, but the early returns look good from a bottom line perspective, as we’re converting a reasonable percentage of the folks we interact with into paying customers. And hell, if we’re nothing more than a stick for our customers to get better pricing and value from the big guys, we’re still going to make some money.

In any event, I still don’t have a real answer to Brenda’s original question, but I have to say that I’m tempted to start quoting the oft used (within the open source space) Ghandi statement, “first they laugh at you, then they get mad at you, then they fight you, then you win.” 🙂

[1] Though I can’t recall seeing a better line than this one: “The guys at the developers’ favorite analyst firm, Redmonk, have been putting out some great content in the past couple days.” Thanks, Christopher.