I've said before, here, that I often wonder if IT analysts are little more than glorified journalists.
They ring up all their current customers, then repackage these interviews as some kind of authoritative statement about the industry. This is particularly true in financial services, it seems. I don't even bother to read their reports anymore, even though it is my team and I that control the budgets for at least the IT firms.
Now, don't get me wrong, there are some good reports produced by these people. By the superstars, that is. Like any employer, analyst firms have their share of them. But also like any firm, they are the exception rather than the rule.
And here is my problem with analysts: if we are taking strategic advice from such firms, then they'd better have better people than us. Experts, not graduates who have worked their way up the analyst ranks without much experience doing whatever-it-is for real.
It always reminds me of the proverbial food critic. They can eat what the chef prepares and pass judgement, but don't put them in a kitchen if what you want is something edible. There is value in the opinion, of course, but the point is the food.
So much for the quality of the analysis you get.
Much more annoying, however, is the business models many firms adopt. They usually sell their services by number of seats, like a software licence. You have to pay an annual subscription for these seats, and they are associated with specific named individuals.
Apart from this being an administrative nightmare, you then have to make it clear that people named are allowed to read reports, but no one else is allowed to do so. As you'd imagine, that almost never works. People share stuff.
We've had calls from the major firm in the space, actually, telling us we're downloading too many reports. Apparently, they are concerned that we're sharing the information we're buying too widely. Such an excellent business model: put in artificial constraints to limit the value you have to us.
But the ultimate, most annoying thing of all with such firms is how their account teams try to grow their revenue.
They send their account managers in to visit with people who are not named seat holders, and start to sell them the benefits of having access to the research. Then, of course, we get a call from these individuals asking for access. It puts us in the invidious position of having to tell people that their needs are less important than those of others. We have a fixed budget for analyst research, not one that can flex upwards because it is convenient for the account manager.
So here is my call to the analyst community.
What is needed here is a new model. I'll accept that there is some value in analyst research, and that the reports written by the superstars have a value that counteracts the journalistic reporting that is mainly what's provided. We are happy to pay for great insight.
But we need to be able to use that insight broadly in our business. And we don't want named seats. It's too hard to make it work. We also don't want an "enterprise" licence, which amounts to buying a named seat for everyone.
To be honest, I don't have the answer, but would like to hear if anyone does. And here is my message to the top tier IT Analysts firms we currently use: your time with us is limited if you don't make it easy for us to get value from what we buy. There are firms out there who realise that the value of a firm is in how many people put their eyeballs on their data.
You need to catch up.
Update: Duncan Chapple writes this response from the perspective of an analyst relations firm.