IT intellect

The 'Net and niche firms give IT pros ample options for market research.

When it comes to buying IT research, John Halamka, CIO of Harvard Medical School and CareGroup Healthcare System in Boston, is cutting the fat.

After years of paying hefty, multi-thousand-dollar subscription licenses to big research firms such as Gartner, Halamka is looking for technology-focused "boutique" consultants who can help with specific projects and be paid on a case-by-case basis.

"We had been buying into research firms because they were very helpful from a strategic standpoint and the world wasn't so complicated then," Halamka says. "But over the last year and a half I have absolutely canceled every one of my enterprise generic kinds of agreements and replaced them with niche consulting agreements."

Across the board, IT executives are finding a growing number of options when it comes to getting technology information and advice. As the IT research market consolidates and matures into just a few big players - think Gartner, Forrester and IDC - the number of smaller, niche consultancies is on the rise. At the same time, there is more information on the Internet and a bigger emphasis on peer-to-peer networking and events to offer real world experience and advice.

It's all good news for IT managers that are being asked to do more with less.

"I would advise IT managers to explore their options," says Louise Garnett, vice president and lead analyst at Outsell, an advisory firm that tracks the IT information and content market, including the IT research industry. "There are just a lot more options today, so you should spend the time to package something that works for you."

That means expanding beyond the traditional constraints of subscription pricing with giant consultancies for access to IT research and advice and looking at new methods of getting IT information, including on-demand and a la carte services, free white papers and Webcasts online and membership in a variety of peer-based networking groups.

IT managers "can really stretch their budgets in a better way by looking at all the different options," Garnett says.

An IT team leader at a large manufacturing firm who asked not to be named, for example, says her company still contracts with Gartner, but she supplements that with information and advice from her peers. "We research other companies' white papers to pull together as many other company experiences with possible new directions," she says. "Personally, I consider white papers to be less biased than other sources."

That is, unless, the white papers are vendor-backed. Increasingly, research firms, which had been struggling during the economic downturn, have been taking paid work from vendors to write white papers focusing on that vendor's product or technology.

"You're definitely seeing more vendor-based stuff, more competitive analysis," says Norma LaRosa, CEO of Kensington Group, a research firm that focuses strictly on the IT research industry. "But it's incumbent on the research firm to present balanced views. They have to show their objectivity at all times."

At the same time, users have to be especially discriminating. The number of Web sites such as KnowledgeStorm, which aggregates white papers and other IT information for the purpose of generating leads for vendors, are on the rise. "We've seen more and more white papers being given away to generate leads over the last few years. They will often have a bias and it's always important for users to look at who sponsors the research," Garnett says.

For Halamka, when he gets vendor-sponsored white papers, "I just chuck them."

Not that he doesn't put any credence in vendor-driven analysis. "In some circumstances, I wouldn't go to a Forrester or a Gartner, but I would go to Cisco Advanced Services for very specialized consulting because I trust them," he says.

Trust is a big issue when looking for research and advice that could anchor a multi-thousand - or multi-million - dollar buying decision. That is one reason why smaller, boutique firms might be seeing more business. Such companies often make it easier for IT to build relationships with trusted advisors.

And, in most cases, pricing is more flexible. ThinkStrategies, for example, is one of many smaller firms, including The Advisory Council [TAC] and Cutter Consortium, that give enterprise users access to experts on an on-demand basis. Aberdeen now offers per-seat pricing, providing access to its analysts and research for $399 per person, per year under its AberdeenAccess program. Annual subscription licensing with research firms typically starts around $15,000 and can go as high as $50,000.

Gartner, meanwhile, says that it plans to use the expanded salesforce it acquired with the Meta purchase to focus on reinvigorating its subscription business.

"I'm not advising clients to stop doing subscriptions," says Kensington Group's LaRosa. "It makes sense in a lot of areas. For example, in an industry that changes a lot like wireless or handhelds, where things move so fast you need ongoing data and analysis, you might want to do a subscription, whereas if you are just trying to get information for a one-off purchase, you might just want to buy a single report. Most larger companies are buying subscriptions and probably will continue to do so."

One area where the larger research firms have been seeing growth has been in events and peer-to-peer networking. Gartner, for example, has its Executive Programs, a membership-based group of more than 2,000 CIOs worldwide, and its Best Practices offering, which brings together peers for technology-focused support and advice.

"Groups of members being brought together has really been a growth spot for the entire research industry and specifically for Forrester and Gartner," says Outsell's Garnett. "The other growth area is events. Again, it's bringing people together."

From Halamka's perspective, though, even networking services offered by the bigger firms are too generic. "I need very [technology] focused networking," he says.

In order to get very targeted research, Halamka says he could be using as many as 10 smaller research services at a time, such as DNS specialist Men & Mice and The Protocol Analysis Institute. At the same time, he has an in-house research staff that helps sort through information and do "in-house prototyping and proof-of-concept work."

"So with the in-house research staff plus the devoted smaller firms, my budget on the whole has gone up," he says, estimating that he spent about $200,000 annually for large research firm subscriptions, but now spends about $250,000 with smaller, niche consultancies. "But I will tell you that I believe I am getting much more value for that dollar because it's so project specific."

An incredible shrinking market As IT research firms consolidate, Gartner still owns nearly half of the market. A look at the top five players.
RankCompanyCompany type 2004 estimated growth2004 estimated market share
1GartnerPublic4.1%40.1%
2IDC (acquired Meridian Research in 2002)Private11%10.5%
3Forrester Research (acquired Giga in 2003Public9.9%6.2%
4Meta GroupAcquired by Gartner, April 200515.5%6.4%
5Millward Brown IntelliquestPublic7.1%2%
SOURCE: OUTSELL’S VENDOR MARKET DATABASE, JUNE 2005
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