I think these companies can monetize the business by offering other value added services that they can’t get today – a lot of companies hire consultants to help with their business and I think this will be no different – it will just force that community (the analyst community) to rise higher, be smarter and offer better servcies – at a more cost effective rate and leverage tools – such as the web (2.0) to be more efficient.

When we first started Wikibon we set out to apply a true open source collaborative research model and we really have very few if any caveats to the use of our research. As far as transparency, one can always hit the history tab and see who wrote what, when.

In my experience this has meant we seem to be able to produce large volumes of very high quality research at very low cost and in far less time than when we were at IDC, Meta and Gartner.

Will this disrupt the established $3B research business? I don’t know the answer. What I do know is we’re having way more fun!

Cheers
Vishal

Companies buy Operating Systems so they have some place to go if it fails.

People pay consulting firms for the “insurance value” of being able to claim “credible research,” and thus be able to share responsibility for the business decisions that result.

There are two types of analyst firms: Those with a lot of end user clients and the vendor whores. (I’m being quite blunt about this.) Let’s just say that Gartner and Forrester are in the former category and many/most others are in the, uh, other category. I can even tell you a story of what happened when I was a senior exec at a large vendor (this was prior to joining META; my CV points to either Oracle, Microsoft or Samsung): I wrote a report, one of the larger analyst firms — a typical vendor whore — put it into their format, and then we (at the vendor firm) distributed it as Gospel, citing that it was a report by a third-party analyst firm. This kind of nonsense happens all the time.

I’d also say, anecdotally, that firms will get movement in the right direction on a graphical representation (gee, could this be some sort of 2×2 matrix?) if they spend more $$$ on that particular analyst firm. Sad, but seemingly true.

This being said, those with a lot of end user clients tend to be the better firms. They hear things, things that can help an end user in negotiating a deal. I can cite a deal involving a large indirect procurement software vendor whereby I saved one of our end user clients (a Fortune 500 company) over $1 million during their contract negotiations. Genius? Nope. I simply knew what others had paid for the same system.

Analysts tend to be a relatively smart bunch, but their real value is in seeing product roadmaps … just about ALL pertinent roadmaps. This is invaluable info for end users — end users get marketing fluff and lies from many/most of their software vendors. The analyst firms can assist in making decisions based upon a broader universe of information.

And, of course, there’s another key value in engaging one of the larger analyst firms: A person/firm to blame for an IT procurement decision gone south. CIOs need a scapegoat — and having Gartner or Forrester as a scapegoat doesn’t hurt.

“Open source” firms are not a bad thing, as long as they’re not vendor whores. This is critical. As an end user, NEVER, EVER use a firm that is a vendor whore. OK, there is one firm with mostly vendor clients that I highly recommend: AMR. But they’re the exception to this rule.

So, when evaluating a firm, make sure that they have a lot of end user clients. If they don’t, run as fast as you can from them.

Also, I’d give boutiques a shot, but with the same caveat. Boutiques can dig very deep, not get caught in a service director’s or CEO’s ego trip. Matter of fact, I’d go with boutiques with end user clients, even if they’re small. See Deal Architect, as one example.

BTW, the next great era in analyst firms: Green/clean tech analyst firms. My day job these days is in the solar sector and there’s a huge need for analysts servicing the renewables sector. Lux is the best, but might be even more expensive than Gartner. Anyway, there’s a lot of room in the renewables space, with Lux being the Gartner of green tech — but without a lot of other competitors. There is EER, Greentech Media, NanoMarkets, a few others, but Lux is truly the Gartner of green tech. But keep an eye on EER (especially for wind) and Greentech (across renewables). And NanoMarkets owns the TOP market, too.

As a result, the topics being explored by most vendor-funded firms are on themes of interest to vendors. Some firms have made a conscious choice to balance the users’ and vendors’ interests. Redmonk and Freeform Dynamics should be praised for such choices. However, that is not the case for many, or perhaps most.

I did an experiment where I took the most recent 20 MQs and 20 Waves to see if I could find them easily on the Web. It was quite easy. Sometimes one would have to give the vendor your email addresses for marketing purposes, but if you wanted a $1,995 research note (yes, that is what the G-men are charging for a one-off MQ note) for free, then an email address is a small price to pay.

As for Barbara’s comments, I agree with “Guest,” I’ve never had a Gartner subscription, but I have read many a Gartner report over the past six years. Same for Forrester reports, the McKinsey Quarterly’s Premium content, and many other paid subscriptions. People e-mail me stuff, what can I say. It’s still not YouTube or BitTorrent proportions, but in the end, I don’t think it matters as much as it does in the music or publishing industry because, unlike songs, movies, or books, the content we’re talking about is becoming commoditized. So, in my opinion, it doesn’t matter that if I read a Forrester report or a free report from some other highly regarded “open source” analyst.

How do we know unauthorized sharing of analyst reports isn’t on the uptick? We live in an age where the consumer’s drive for convenience routinely tramples over intellectual property rights. Can we can safely assume that people infected with this spirit will somehow respect our rights?

Perhaps industry analysis is shared differently (e.g., e-mailed from peer to peer rather than posted on-line) to avoid obvious detection. How do we measure this?

My firm is new; founded in April by me. The material on the website is freely available & I am not in the pocket of any vendor. Will I offer subscription services for users and vendors? You bet! Why? Primarily becuse of the reason you mention in your original article: Web 2.0…not all things need be free, nor is all free information correct. Having worked in the vendor community for 25 years before becoming an analyst in 2005, I can tell you that many analysts don’t actually understand the technology they cover. Users should trust analysts who have actually worked with products; designed them, installed them, fixed them under great pressure from users. That kind of experience is priceless and valuable to users.

You started this thread with the position that the industry analyst business is about to follow the fate of the music and publishing business. It’s worth noting that in the analyst business, this parallel would require a massive amount of Gartner, Forrester and IDC content being copied and shared freely as unlicensed content among research consumers – thus undermining the financial stablity and licensing policies of these giant firms.

That’s not happening. Unauthorized file sharing is not on a notable uptick in the analyst business.

You can discuss ideas for a reinvention of the “analyst business” without contriving pending doom as the impetus. Innovation is a good thing in any business. In its own right. Just to make the world a better place.