This blog is written in response to Gideon Gartner's blog "Advisory Industry, a future redesign: the “Payment” Model". As I called out in two blogs in 2007 Gartner is now a small fish in a big pond as it attempts to compete in the larger management consulting market.

As such neither it nor Forrester or IDC can achieve organic growth and catapult themselves into the 10’s of billions of dollars of revenues (and higher profit margins) that the wider industry commands. For that reason I completely agree with Gideon that the required changes to existing pricing models in the ICT analyst advisory market are unrealistic in today’s environment. However, the “king of change” as Gideon called it in one response is well within reach of the firms that stand capable of changing and re-educating the industry.

I believe that the future of the large ICT analyst houses is inextricably tied to the innumerable boutiques that exist in every market that is geographically and economically relevant to the ICT industry. To maintain relevance as the global benchmarks, Gartner and Forrester must follow the lead of major banks and airlines and address a different business model that will include the addition of lower cost subsidiaries that offer either changes in service, pricing and delivery structures to companies that represent a larger and more diverse demogrpahics. Let me elaborate.

Brisbane, Australia: May 22, 2009: Brisbane based IT research firm, Longhaus, has secured the commercialisation rights to selected Queensland Government technology information, the Minister for Public Works and Information and Communication Technology, Robert Schwarten announced today.  In a first for Australia, the Queensland Government will inform industry of its current and potential technology spending through a range of information products offered by Longhaus. 

At approximately $24 Billion per annum, the Queensland ICT market accounts for almost 25% of Australia's total annual ICT expenditure. Within this market the Queensland Government is the single largest ICT purchaser.
In support of this regional ICT powerhouse, Department of Public Works Director-General and Queensland Government Chief Information Officer Mal Grierson this week signed a 5 year agreement for the commercialisation of data relating to the government's ICT footprint with information regularly collected from across Queensland's budget-funded agencies. Known as the Longhaus Baseline, this new service will bring an endorsed and unprecedented level of insight into both the spending and composition of Queensland Government ICT. 

This is a significant agreement being the first of its kind in Australia, and arguably a world first where a government has formed a commercial relationship to supply detailed information about its own ICT assets. As a coordinated, credible and endorsed information resource, interest is high both in Queensland and across other jurisdictions, in the absence of similarly detailed market insights.

Downturns are always interesting times for the analyst industry. I’ve lived through a couple but always as staff. Layoffs always happen, as we have seen with Gartner and Forrester culling 2-3% of their respective global research headcount over the last month. Australia hasn't been immune. Management changes will occur as well as the usual chop and change of resources between companies. Further consolidation is inevitable.  

What makes this recession interesting is that it is the first since 2005 when the last big spike in new analyst firms (like us) popped up on the radar. Times have been pretty good since then. However as a business owner I am glad that we started almost four years ago and not in the last 12-months. 

Since those times we have made it abundantly clear to most organisations we talk to that a stretch end-game for us is IPO. We want to be the recognised Australian analyst brand. To get there our challenges are not just internal because the industry itself has changed dramatically in the eyes of the customer and analyst relations alike. 

I take my hat off to everyone in the Analyst Relations side of the ICT industry. Having spent the last few weeks traveling I am reminded that our industry is accentuated by a series of 1-hour briefings and multi-day events. To give an idea of scale, in previous organisations it was common to see up to 80 or more briefings of some shape or form each week...

At an analyst relations briefing in November last year a group of Australian-based analyst firms (us, Hydrasight, IBRS, and Forrester) presented to a gathering of 13 international vendor AR managers. It was put to us that we should consolidate into a single provider in order to make it easier for them to spend their research budgets. At the time it seemed a little like Dr Frankenstein telling his monster that he had made a mistake; perhaps creationism wasn't such a good idea. But as in that classic tale, the symbiosis of the analyst and vendor relationship is the strangest of love-affair. Each needs the other as a justification of existence. So how did it get that way?