As I sat down to write about the Gartner/AMR deal this morning (click here for the details and Spend Matters' initial take), I realized that I could probably fill a book with my thoughts on what the deal bodes for the future of research, publishing and expert consulting models in the technology sector. But rather than ramble on about it, I thought I'd structure my initial thoughts into five key concepts that suggest what the Gartner / AMR deal might mean for the future of industry analyst research and business models in the Spend Management sector and far beyond. Without further ado let's dig in.
1) The traditional industry analyst market is mature and becoming more so. Consolidation will create fewer voices from existing and even new players that continue to adhere to legacy business models. This will in turn open up the industry to new approaches. I believe that the line will blur between publishing companies, event companies, blogs, analyst firms and even consultancies with particular technology expertise when it comes to expert advisory in the coming years (more on this in a minute). Perhaps the largest wildcard here is event companies (e.g., IQPC, Procurement Leaders, etc.) becoming more active on the publishing and advisory sides, including but not limited to technology. For example, Procurement Leaders Intelligence Unit, really is a type of new analyst model for commodity market research.
2) The market for non-customized paid technology content will continue to decline unless the research is highly focused around a specific vertical or category. I believe that people will always pay for expertise (and it can be worth paying a top analyst $10K or more a day if they really know their stuff and can steer you to make a better business decision). But with the rise of blogs and expert, in-depth downloadable content, I believe that in-depth analysis that's paid for by those looking for leads will continue to gain favor relative to per-report or research subscription research models. Aberdeen gets this (which says nothing for the quality of their content, mind you). I wonder if others will as well. This is a direction Spend Matters plans to embrace going forward in a new research offering we'll be launching in January. But more on that later.
3) Individuals will be branded rather than firms. With former top analysts like Ray Wang, Vinnie Merchandani, Brian Sommer and Jason Corsello striking out on their own or headed to smaller shops with new business models -- not to mention publishing their thoughts daily on blogs which are free -- I believe that top individuals will drive influence in shaping market opinions (and buying decisions) regardless of whether they're independent or working for larger firms. This will also force firms to pay top performers even more to stay, giving them a stake of the action just as sell-side analysts on Wall Street have material upside based on their book of business (though not as much as before, as some ex-Morgan and Merrill folks will most certainly attest to). I know that personally, it would be hard to walk away from a model like Spend Matters given the independence and benefits of working individually relative to the upside or bonus of working for a larger entity.
4) Vendors will need to take a close look at how they allocate resources to their analyst relations and communications efforts. I still love companies that hand Spend Matters off to a PR group or outside firm rather than trying to engage in meaningful conversation at the industry, solution or tool level. It provides entertainment on stressful days to see how long it takes some people to get it. Moreover, vendors will need to think about how best to allocate their budgets to analyst firms. As one contact put it to me this morning regarding this specific deal, "It is unlikely they [Gartner] will continue the same research agenda, level of inquiry support, and content that vendors had contracted [for] with AMR. They'll certainly want to Gartnerize these service lines -- and that's not what we signed up for."
5) Practitioners will begin to turn more frequently to new sources of expert analysis provided by incumbent services providers than traditional research firms. I believe increasingly that outsourcing providers (e.g., IBM, Infosys, etc.), large SIs/consultants (e.g., Accenture, Deloitte) as well as smaller, independent technology integration shops will continue to become more influential in technology selection, negotiation and buying decisions as the traditional industry analyst market consolidates. I also think that benchmarking and strategic advisory firms with technology depth such as Hackett Group will also become invaluable to practitioners as legacy research models become fewer and far between.
What do you think about these key takeaways? And are there any that I'm missing?