Tuesday, December 15, 2009

Ovum and Datamonitor: The Rise of A New Industry Force?

There's been lots of talk over recent months about the changes happening at Datamonitor, Ovum and Butler Group.

Well, the plans are now complete and the good news is there's enormous potential in what the new look Datamonitor group is trying to accomplish.

Moving forward, the plan is for Ovum to be the single brand selling technology and telecoms research and analysis services. (Datamonitor Tech has already gone and we’re told Butler Group is to be phased out over the coming months).

In the meantime, Datamonitor has established a single technology analyst team under the Ovum banner. This team is split into two groups: one covering IT and the other covering telecoms. All the analysts at Butler Group and Datamonitor Tech have transferred across to Ovum.

And the new Ovum teams are looking to expand out of their traditional vendor home base and start providing research and analysis services that will appeal to the technology buyer.

Now this is where it starts to get really interesting. Because Datamonitor has a huge business outside of IT and telecoms. There are another 350 analysts who are not technology related. They are business specialists covering industries such as Healthcare, Energy and Consumer (FMCG, Retail and Financial Services).

Most of this work is done under the Datamonitor brand (the exception is retail where Datamonitor operates under the name Verdict Research). And Datamonitor argues it is the “powerhouse brand” in many of these industry segments.

For example, it says it has more analysts covering healthcare and retail than any other company in the world. Verdict Research's position in retail has been endorsed by no less than Sir Stuart Rose.

That depth of resource out strips anything that the other tech analyst firms can offer. Those technology analyst firms that have built up teams to look at vertical markets have done so on a smaller scale. Quite naturally, they have also concentrated on the use of technology rather than providing broader business insight.

Until now, technology has never seemed to fit easily in the Datamonitor group. It's both vertical (with analysts advising vendors on how to run their business) and horizontal (with technology being used by every type of company out there).

Too often, the opportunities offered by the latter have been neglected. Not any more.

CEO Mark Meek has spent the past two years putting together a strategy that he believes will allow Ovum to compete at the highest levels when selling to IT and telecoms vendors. More importantly, he hopes it will enable Ovum to move in to the buy side market in a significant way.

Ovum will now work with all the other Datamonitor analyst teams (including Verdict) under the “Collaborative Intelligence” model. Technology analysts can call on the insight and expertise of their industry colleagues to help them in their work. Similarly, the industry analysts can turn to Ovum when their clients need advice on technology and telecoms.

This is obviously a huge culture change – and Mark's introduced processes and structures to try and ensure it works in real life as well as on paper. He is determined that analysts in Ovum and Datamonitor start working together. For example, cross industry teams must now meet every month and every quarter to discuss research agendas. There is also a common model across the whole group - gather data, apply meaningful insight and make recommendations.

Like all cultural change, it is taking time and it's been painful – but things are apparently coming together slowly but surely..

For Ovum, the advantages are clearly defined.

Its analysts can now help IT departments talk the language of their specific industry (not the generic language of business). If I am a CIO and I want outside IT advice from an industry analyst, I can now turn to Ovum. I will get the advice I need – but that advice won't be generic. It will be based on a detailed understanding of the industry in which I work.

That's only possible because the Ovum team can call on the resources of all their colleagues who specialise in healthcare or retail or energy or FS or consumer goods. These people are actually experts in that industry, not in technology. All of a sudden, as a CIO, I have industry experts and technology experts being brought together to answer my questions and give me the advice I need. That's powerful.

Ovum will do the same for technology suppliers, helping them understand their clients' industry – and not just from a technology perspective. As a vendor, my product, marketing and sales teams now have a new source of industry insight and expertise that they can use to make sure they know what's happening in their clients and prospects. They are no longer talking in generic, cliched horizontal technology terms but addressing real, specific business issues in a detailed way.

It's hard to get across the real potential of the model in words – but at a recent Ovum event, two great examples of how this might work were given (one for pharma and one for retail). Videos of both are available on the Ovum website (you can also access them via the IIAR blog).

According to the Datamonitor and Ovum leadership teams, feedback from CIOs has been very positive. On the other hand, vendors have been underwhelmed. They don't appear to have yet grasped the concept or the benefits it could bring.

It's exciting to hear Mark and his senior colleagues speak. They are doing something different and there is the opportunity here for Ovum to become a powerhouse technology and telecoms industry analyst firm, in both the buy-side and sell-side sectors.

Of course, there is the chance that it will all fail. While the vision is compelling, the challenge of making it real is huge. Some steps have been taken but there is plenty more that needs to happen before anyone can declare the new Datamonitor/Ovum a success.

One thing is clear. We now have three sizeable, clearly differentiated competitors to Gartner. One is focused on market sizing (IDC), one on roles (Forrester) and one on industry insight (Ovum).

Buyers – both buy-side and sell-side - should be delighted to have real choice in the market.

Friday, December 04, 2009

Gideon Gartner on the future of the industry analyst

I have been told I mustn't be shy. I should make sure you all know to go see Gideon Gartner, Jonathan Yarmis and me discuss the future of the industy analyst.

Thanks to Ovum for inviting me to take part in its recent event launching "Collaborative Intelligence".

You can access the video via the IIAR website.

Tuesday, December 01, 2009

Gartner buys AMR

So, another analyst firm is to disappear. This time it's that leader in ERP and supply chain, AMR Research. It's being bought by Gartner for $64 million.

AMR seems to have got a fair price - 1.6 x sales is roughly the same ratio as Jupiter Research got from Forrester ($23 million paid on sales of $14 million) and more than Gartner paid for Meta ($162 million, 1.35 x sales of $122 million).

I'm not as upbeat as some other industry commentators are. AMR was a well respected firm with a good team of analysts. In its niche, AMR was a strong rival to Gartner.

Vendors and buyers looking for a second opinion on supply chain are now going to struggle to find a viable alternative in the short-term (although watch out for Datamonitor/Ovum, there's some really interesting stuff going on there - a compelling vision if it can be delivered on).

Given Forrester's focus on role-based research, you might have thought it would have taken a fancy to AMR. It'd be interesting to know if it got outbid by Gartner.

Because once word got out that AMR was up for sale, it's hard to see Gartner letting anyone else buy it. It's just too good a deal - revenue, clients, people and opportunities for growth.

Bruce Richardson, chief research officer at AMR, is eloquent in explaining why this also makes sense for AMR, over and above the hard cash that Gartner offered.

If you're interesting in reading more on this, it's worth checking out the IIAR blog post on the acquisition. There's some interesting and valuable insights there.

Top mobile enterprise analyst leaves IDC

Lars Vestergaard is leaving IDC.

In January, he takes up a new role at Mobilethink as MD for a new business area, Mobilethink Analytics. Based in Denmark, Lars will be selling analytics solutions to mobile operators around the globe.

It’s an exciting challenge for the man who, in his decade with IDC, has built up a reputation for being one of the top analysts covering enterprise mobility in Europe. As Lars himself says: “After more than 11 years, it is time to try something new.”

While his appointment is a great result for Mobilethink, Lars' departure is a loss to the European analyst community.

We’re interested to find out more about how IDC will replace him. In the past, the company has proven adept at attracting and retaining experienced, knowledgeable analysts (think Chris Lewis, Eric Owen, John Delaney, Chris Barnard…)

In the meantime, Lars' responsibilities will be covered by colleagues Dan Bieler and Rosie Seechi.