It’s amazing that people believe vendor-sponsored research
One of the open secrets of the technology industry is that many — if not most — technology analyst firms are “pay for praise.”
Such analyst firms conduct research designed to flatter their clients who sponsor that research. Those clients then promote those “objective” research results as justification of their innovation leadership, and as proof of their marketing hyperbole.
Often, when technology journalists hear about a company being named to a research firm’s list of leaders, the question we ask ourselves is, “How much did that cost?”
Some analyst firms are more honest than others, of course. And some are much worse. Lee Gomes, in a Jan. 30 story in The Wall Street Journal, wrote about the practice in “Vendors Still Paying For IT Research That Flatters Them.” His story hits the nail on the head.
Lee focused on one notorious flatterer, Aberdeen Group, beginning with,
There were many excesses during the Internet bubble; one involved the Aberdeen Group, which passed itself off as a technology consulting and research operation, but which was for the most part a “pay-for-praise” operation. If you saw an Aberdeen report saying that Acme MicroMacro sold world-class solutions, you could be sure that Acme had written Aberdeen a world-class check.
He continues that under its new owners, Harte-Hanks, Aberdeen has a new business model that discloses the vendor relationship:
The current Aberdeen comes up with a research topic, typically involving some new technology trend, and then approaches tech companies selling products associated with the trend. For what customers say is roughly $30,000 a company can become a report sponsor. Aberdeen, which wouldn’t discuss its fee, then sends questionnaires to tech users, asking about their current activities and future plans for the area in question. The reports are meant to be a snapshot of the marketplace and don’t mention specific companies.
The result, reports Lee:
The potential conflict in this approach, though, is clear. The reports are big business — there were 212 last year — each typically with four or five sponsors. But if much of your top line is dependent on getting tech companies to sponsor your research reports, you’ve got quite an incentive to design questionnaires that will yield the kind of reports tech vendors will want to sponsor.
In that regard, Aberdeen delivers. The reports seem to invariably discover that “best in class” companies use, or are thinking about using, or somehow embody, whatever technology the report happens to be discussing.
While Aberdeen is noteworthy for participation in such non-objective research, it’s surely not the only one. Think about the biggest, more influential analyst firms in IT. I’m sure you can think of several household names. Nearly all of them play the same game: their reports are meant to flatter their sponsors, not offer honest advice to enterprise IT managers who are relying on those reports to help make difficult technology decisions.
It’s a shame that when it comes to analysts, you just can’t trust them, most of the time.
Alan,
The following was Aberdeen’s response to the Wall Street Journal.
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Lee,
I fear your Portals piece today provided a great disservice to the WSJ reader. The article begins with the title of “Vendors Still Paying for IT Research That Flatters Them.” Yet, Aberdeen’s core research does not mention vendors, their products, or services, a fact that is buried half way through the article. In addition, there is no mention of the 1000+ research reports published last year that were not sponsored and made freely available for end user consumption.. I am confident that our community of 2.5 million readers would disagree that somehow the “sponsored research” model undermines the value of the fact based research we deliver. To this point we provided the WSJ end user (not just “tech users”) references, the stature of MetLife, Best Buy, Kawasaki, Tyco, Nike, and General Dynamics, who leverage Aberdeen’s research to make informed decisions. Unfortunately it does not appear that their voice is represented anywhere in the article. Nor does the article acknowledge that Aberdeen does not conduct single sponsor, custom research, or sponsor initiated reports that are still prevalent by other research organizations in the market.
This year Aberdeen will publish over 250 core research reports originating in the process of interviewing and surveying relevant end users. These responses will emanate from the 410,000 individuals that have opted in to participate in our research panel. Our research is not predicated on “some new technology trend.” In fact, the comprehensive research agenda for 2008 which is published on our web site (www.aberdeen.com) and was presented to you in hard copy for review, controverts the very notion that emerging technology is anywhere near the forefront of topics covered. In addition, the half-dozen customers who indicated that the value of sponsorship is in the opportunity to be associated with Aberdeen’s thought leadership and wanted to “rise above the noise of the marketplace” find comfort in the independent methodology, quantifiable insight, and to use your words “straightforward information”, that Aberdeen’s “research” provides.
Our reports “invariably discover” how the market is behaving, what changes they perceive, the vehicles by which they are tracking and measuring progress, and the actions they are taking to manage their business. This insight is not grounded in some “new tech trend” as you state. In fact, your reference to our study that finds that “best-in-class enterprises have “contract compliance rates 70% higher than their competitors” is a great example. Contract compliance is an outcome of a process not a purchase of a product. Last time I checked “Improved Process Visibility” and “Cutting Administrative Costs” are bell weather goals of most corporations and not rally cries to adopt tech trends as the article implies.
I agree that “the new Aberdeen is better than the old”, it just would have been useful to draw the distinction and provide insight into how sponsored research has reinvented and reinvigorated objective, quantifiable, actionable insight that educates end users to action.
Best Regards,
Stephen Gold
President
Aberdeen Group