Conferences are bad, but manageable as they are only once or twice a year. Consortiums are worse, as they meet regularly to thrust their views upon you. Pundits / Futurists are a significant damnation, because their brand of influence seems to be annoyance perfected. But none of these compare to the damnation of analysts. Why?
Analysts are the Gatekeepers of the Gold Seal of Approval.
Let’s say you are a new and innovative startup, or even an older software provider that just went through a re-invention phase, and you have this great new product that contains at least half a dozen innovative features and functions not in any other product in the market that has the ability to deliver any organization that adopts the product tremendous efficiency and cost-control beyond anything else they can put in place. Your software should be winning awards and getting the gold-seal of approval that lets potential customers know that, for industry X with problem Y, this is one of the best solutions on the market. But it won’t even get a side mention in the back pages of the local business journal until it gets recognized by an analyst firm as an emerging solution, and forget front page coverage on something like Mashable until it has been vetted and approved by at least one major analyst firm. They are the keepers of the gold seal of approval, and if they don’t like you, you better keep one foot in the coffin.
If you’re not on their lists, you’re not on BigCo’s list.
The best way to get coverage is to get a big win. But a big win requires a big company adopting your software and getting a big result that they want to advertise to the world (so they can say how smart they were and how well they did). But the chances of a big company even inviting you to an RFX until the analyst firm, that they spend six or seven a years on to advise them, puts you on a contenders list is slim to none. Unless you can find a back door (through a consulting partner who will use your product to get a great result on a services engagement and then mention you in a press release and give you credibility with the firm), you’re out in the cold. After all BigCo payed six, if not seven, figures for the analyst firm’s shortlist, so it should be the best and they shouldn’t question it.
If you won’t pay to play, it will take a while to get on the analyst firm’s shortlist.
Analyst firms have two major client pools: BigCos (the Global 3000s and the emerging mid-market companies that want to be the Global 3000) and TechCos that want to supply the BigCos with tech products. BigCos pay for access to the research library and time with the top analysts to help them identify the right solutions. TechCos pay for access to the research library and competitive analysis and time with the analyst to help craft a product and/or services roadmap that will help them differentiate themselves in an often noisy marketplace. The big clients in each group will pay a significant amount of money, and will respect significant value in return. BigCos will expect one-one-one analyst time with the experts and specific consulting projects and the TechCos will expect prominent placement in all of the research.
As SI has explained, there’s a reason why every time a new Perilous Pyramid report is released on a subject by a big analyst firm, which will typically revisit major software markets every one to three years, the criteria for inclusion as well as the criteria for scoring changes. It’s not just because the technology changes, but because sometimes certain companies need to be excluded and certain capabilities scored higher for those six figure TechCo clients to look good. And if those six figure clients don’t look good, they won’t be giving the analyst firm six figures at renewal time.
And if you’re not a big client, good lucking winning the Perilous Pyramid.
As a result, if you’re a new company that can’t afford to become a big TechCo client of the analyst firm, or that doesn’t believe in the pay-to-play model and won’t pay for lip service, good luck winning the Perilous Pyramid, because, even if you happen to get the attention of the lead analyst on the report and that lead analyst really likes you, if your solution is too much of a threat to the big TechCo clients, it could be a couple of years of relationship building before you even get a mention as an emerging company (that didn’t make the Pyramid because revenues hadn’t exceeded the new minimum of m Million). the doctor, who is an expert in optimization and analytics and associated technologies as well as other advanced sourcing platforms can tell you that the best platforms in these areas have never reached the top level of the Perilous Pyramid and many never even got included in the reports when they were one of the best solutions (due to lack of revenue, lack of suite functionality, or some other arbitrary inclusion requirement). Fortunately most of these Pyramids did rank the established companies that were included fairly accurately (as there are big TechCos with good solutions that would serve the needs of most, but not all, client organizations), but the reports never gave a complete picture. Either equivalent options (from a technology perspective) were missing or not ranked as highly due to arbitrary ranking or scoring criteria.
As such, analyst firms are one of the biggest influential damnations out there. Like any market intelligence / consulting firm, they have to keep their clients happy to stay alive, but that often means ignoring solutions that should be covered. This means that new startups suffer as do big clients that have a very specific need that can’t always be met by the bigger TechCos. Now, a few analysts do their very best to uncover and promote new startups that aren’t paying clients (and some even do so without the expectation that those startups will become paying clients when they can afford to do so), but given that they have to spend the majority of their time flitting between, and dancing to, two different types of tunes (BigCo client and TechCo client), they don’t have much time left for anyone else. So while their advice will be good, it’s never complete and even though we might want to think that because we paid six figures for their advice that we could take it at face value, we can’t and, like everything else, have to take it with the grain of salt it comes with.