Do IT analysts skew the services market?

I recently met up with an analyst relations executive form a consultancy. Being a journalist who regularly talks to analysts it was interesting to get some views on industry analysts from the other side of the fence.

The views of IT analysts are taken very seriously by businesses when they draw up It strategies and buy services.

There are many different types of analysts and most are nowhere near the size of the sector’s Gorilla, otherwise known as Gartner. But there are a few big analyst firms that have a major influence on the market.

Magic quadrants and similar research, rank suppliers on different variables. Businesses are heavily influenced by these when buying.

But the problem with Magic Quadrants and the like are that analysts only really measure a few companies with global footprints. As a result research showing IT services buying habits are skewed because this type of service is often bought from a regional specialists. Particularly in continental Europe.

For example I recently interviewed an Indian supplier, Hexaware. The companies head of Europe told me the company has a really strong business in Germany. In fact he said it was the first offshore supplier to win a €25m services contract.

So if a German business was using a Magi Quadrant to decide which company to select would miss out on lots of smaller specialist options.

See this blog post about how industry analysts affect the market from the Institute of Industry Analyst Relations IIAR website.

This finding is interesting: Changing the Market to Fit Their Tools. It relates to the construction of the major ranking – the Magic Quadrant. “We found that in producing the ranking its authors will attempt to change aspects of the market to fit the tool (rather than the other way around). It appears that only a limited number of vendors can be ranked on a single Magic Quadrant (for reasons to do with clarity and parsimony), which presents problems for those areas where there are many vendors. Rather than come up with alternative means to capture vendors, however, its authors will divide up a market through introducing new nomenclatures, so as to handle the limitations of their ranking.”

Perhaps small specialist analysts are where buyers should look for IT services advice before spending their cash. Or does the “nobody gets sacked for buying IBM” mantra ring true with the likes of Gartner?

Give me your views.

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