The Internet has created an unique environment for the transfer of information and ideas and it brings like minded people together to develop those ideas.
This collaborative process has, on the one hand, the potential to fundamentally change established norms, while on the other hand it has the inherent drawback of creating an unrealistic expectation of change among the online community, the Internet reality distortion field if you like, while the silent majority watch and are unmoved.
The challenge for everyone is to try and identify both where real change is necessary and possible. There is no doubt that these changes are taking place. For example, the open source software movement would probably have never occured without the Internet – so what other changes are headed our way? There will probably be many more but what they are and how they will impact traditional business and traditional thinking is the great unknown.
An example of this new thinking is an intriguing “conversation” that has been kicked off by James Governor of Red Monk on the possibility of an alternative model for industry analysis.
He is wondering can the same motivation that created the open source movement have a similar impact on the industry analyst business?
If you’ve ever worked in the technology sector you will understand the importance and influence of industry analysts. In a hyped market filled with complex products, built from complex technologies with complex features, industry analysts such as Gartner (& now Meta), Forrester, IDC et al offer business and IT executives and oasis of calm independent, insightful advice. As a result, analysts often have a direct influence on the technical purchase decision.
The influence of the analyst community in the technology purchasing decision is a much coveted resource. It is one of the reasons that technology vendors are anxious to access, inform and influence these analysts. Typically the bigger vendors spread their analyst budget around a large number of firms. However the smaller firms, with limited funds have a far more difficult time and often budget decisions are driven by broader marketing requirements. With this market dynamic there is always risk.
I have been working with industry analysts in North America, Europe and Asia, on and off, for well over a decade. In my experience, the majority of analysts and their firms, offer impartial, informed and valuable advice to their clients – whether those are vendors, end-users or a combination. But as with any market (think Public Relations ladies and gentlemen!) you always have rogue elements who offer biased, “pay-for-play” services which are about as valuable as you’d expect.
It’s a big diverse market with different business models, where the big firms are very large (e.g. Gartner revenues for 2003 were $858M) and the smallest analyst shops have one man and a dog – but size isn’t necessarily everything.
A new analyst model emerging?
In explaining the need for a new model of analyst services, James looks at the changes taking place in the software market with the growing emergence of open source and makes the somewhat tongue-in-cheek comparison between the mafia and the analyst business:
“Suffice to say that sometimes the industry analyst business looks something like the Mafia… some analyst firms appear to run a sophisticated version of the protection racket. If you pay up we let you do business – if not we can make life real hard for you by smashing the place up/downgrading your products. Its an open secret in the business, the corpse out in the backyard we all catch occasional whiffs of…It is becoming increasingly clear that the industry analyst business is ready for an overhaul.”
Red Monk’s open source analyst concept began to mature following an experiment where they decided to release a report (PDF) under a Creative Commons license. Their report included the core content from Red Monk and then was extended and influenced from discussions with a wide range of vendors and end users and made available free using Creative Commons.
Drawing on Eric Raymond’s seminal (from an open source software perspective anyhow) essay “The Catheddral and The Bazaar“, James believes there is an opportunity for an analyst firm which steps outside the security (and comfort) of the Cathedral and instead embraces the Bazaar’s more dynamic marketplace of ideas and people.
James’ partner Stephen O’Grady offers five reasons why this open source analyst model might work:
- Open Source is as Applicable to Industry Analysis as it is to Software
- Great Ideas Come Can Come from Anyone
- The Group Mind is Smarter than the Individual
- An Idea’s Power is Proportional to Its Audience
- Proprietary Analysis is a Myth
- Open Source is About More than Source Code
Impact for Public Relations?
I think this is a very interesting idea and it has a lot of merit. There’s no question that the typical analyst firm business plan – like most industries – is traditional and hasn’t changed much in the past twenty years. There isn’t any reason why an open source approach to services and consulting couldn’t develop in the same way as software and through the creative commons movement, content.
In common with both of those movements however it’s unlikely that the approach will unseat the incumbents in the medium term, but that’s not the discussion at this point.
This initiative is one of the many reasons I try to explain to fellow practitioners that the biggest challenge of the Internet is tracking and understanding change. The Internet isn’t as simple as a newspaper, it’s alive with ideas, trends and opinions. It will continue to change and develop.
I personally think this is an innovative approach to a business that has operated in a very structured (and tired) format for a long time. [It should be noted that Tom Rhinelander’s New Rowley Group is also exploring new ways to address analysis]
How would this new model affect Public Relations (which in my world includes Analyst Relations) practitioners? That’s an interesting question… it’s not clear at this point, other than that traditional models of engagement would need to be re-evaluated.
Furthermore, there are some outstanding questions for James and Stephen.
In appears to me that the biggest challenge is attracting end-users to this model. After all, if you have them, the vendors will follow like sheep – so how will you reach out to the customer? What will the vendor:end-user ratio be in contributing to this research? Finally amongst all this collaboration and sharing of ideas how do you ensure you can provide your clients with clarity and independence from vendor interests – surely something most end-users are looking for?
Finally I’m interested to hear how James sees this approach changing the existing relationship he has with PR and marketing folks.
This is one to watch….