Analysts can almost dictate whether or not a company makes it to a customer’s short-list, says Dave Cadoff, a marketing consultant and author of the book Analysts’ Secrets Exposed. “When I was working at a web content management company, it was not ranked very highly in a Forrester Research report and that probably cost the company hundreds of deals and millions of dollars,” he says.
Market researcher Outsell backs up this belief. It suggests that more than half of the largest companies in the US subscribe to analyst research services and, in a survey, one-third admitted that they have an “extremely high influence” on their technology selections.
In the UK, supermarket chain Sainsbury’s hired Gartner to advise when it sought to overhaul its entire IT department. “We found Gartner very useful as a third-party, advising, guiding and providing some input about global best practice,” says Sainsbury’s CIO Margaret Miller.
When Forrester Research revealed that revenues had plunged by one-third in 2002, it provided definitive proof that analysts were no more immune from the economic downturn than the companies or industries they cover.
For Forrester, the answer was to acquire rival Giga Information Group, Gideon Gartner’s second stab at IT analysis, set up in 1995. New media analyst Jupiter was almost an early victim when it narrowly avoided a brush with bankruptcy in 2000 by merging with wealthier rival MediaMatrix.
However, many other, smaller groups have not lasted. Hurwitz Group, a respected group of heavyweight analysts, was forced to close its doors in October last year. PC Data and Strategis Group also closed in 2002, while Gartner sold TechRepublic to online information provider CNet.
In the UK, ComputerWire, which once straddled the worlds of both print publishing and IT analysis, filed for bankruptcy twice before its assets were sold to Datamonitor, a broad-based analyst company that has itself suffered from a revenue decline and patchy profitability.
Meanwhile, many others are finding the recession is tough. In the UK, both Butler Group and Bloor Research have been forced to rein in expansion plans and adopt flexible, low price strategies to maintain demand.