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Vendor agnosticism, revenue stability and understanding your client’s spend.
I recently wrote about Gartner's market position as a firm whose core asset is proprietary content. Dave Eckert and Carter Lusher classify analyst firms into those that are end user centric (like Gartner) and those that are vendor centric (like the Yankee group). Duncan Chappel lays out the relationship between analyst relations organizations (AR) and the vendor centric analyst firms: "Different analysts generate very different percentages of their revenues from AR managers. Many analyst firms generate a lot of revenue from vendors, but not all of that revenue is from AR managers or from the rest of the vendor marketing organisation. Some analyst firms are mainly engages in vendor-funded research projects which supports the vendors’ marketing operation. A firm like Quocirca, for example, generates 99% of its revenue from vendors, and much of that is perceptual research which vendors commission to develop their marketing."
Vendor agnosticism does seems to add a modicum of revenue stability for analyst firms. Those that try to provide unique insight into solving business problems seem to do better than those that make a living supporting marketing programs of specific vendors.
The software services business does have it's parallels. During the dot com boom, fly by night web consultancies flourished and "e-business verticals" blossomed in larger companies. These organizations had competencies around putting up websites quickly - a decent competency to have, but made the mistake of focussing only on small and mid market high velocity startups. The going was good as long as there was venture money to feed the frenzy. Traditional outsourcing companies did not get the fantastic valuations that some of these more flashy vendors commanded, but based their revenues on more mundane bread and butter application development and maintenance activities. Unglamorous but stable.
All this leads us to examine the importance of understanding how your client spends her IT dollars. What typically gets funded during a recession? What gets yanked off the table? How should you customize your pitch during a recession? Should you change the relationship mapping to make it more operational during a recession? Food for thought!
Account Management Outsourcing
Vendor agnosticism does seems to add a modicum of revenue stability for analyst firms. Those that try to provide unique insight into solving business problems seem to do better than those that make a living supporting marketing programs of specific vendors.
The software services business does have it's parallels. During the dot com boom, fly by night web consultancies flourished and "e-business verticals" blossomed in larger companies. These organizations had competencies around putting up websites quickly - a decent competency to have, but made the mistake of focussing only on small and mid market high velocity startups. The going was good as long as there was venture money to feed the frenzy. Traditional outsourcing companies did not get the fantastic valuations that some of these more flashy vendors commanded, but based their revenues on more mundane bread and butter application development and maintenance activities. Unglamorous but stable.
All this leads us to examine the importance of understanding how your client spends her IT dollars. What typically gets funded during a recession? What gets yanked off the table? How should you customize your pitch during a recession? Should you change the relationship mapping to make it more operational during a recession? Food for thought!
Account Management Outsourcing
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