July 28, 2010

The ever-blurring analyst/consultant line

Continuing the discussion about IT analyst business models:

In the traditional model of IT analysis, vendors and users alike buy subscriptions to published research that are bundled with a certain level of retainer-like consulting. You can also buy additional consulting from analysts on an ala-carte basis. Indeed, analyst relations gurus suggest it’s a best practice to do so, both because you might learn something and because the process of your doing so might strengthen your relationship with them, in reality and euphemism alike.

In the 1990s I subverted that model somewhat. Anybody could buy my subscription newsletter for $347/copy/year. Only two vendors that I recall (Oracle and Informix) ever bought > 10 subscriptions at once. In addition, I had some faxed published product that frankly didn’t add all that much to the newsletter. But it was part of a $15,000/year service – almost always sold to vendors only — that also included a day of consulting and related prep and follow-up, a price point I stumbled into and later in various ways validated.* Big companies like Oracle and Microsoft were encouraged to buy, say, one unit of service each for the DBMS and application development tools groups. If one group wanted more service, they could pay 2X as much, while getting the same faxed reports. Thus, in most ways but not all, I separated out my subscription business ($347/seat/year) from my consulting business ($15,000/episode for vendors, custom-priced for users) even then.

*Institutional investors got their own price points, and a truly retainer-like service model. But as my old customers in that area fell off through usual turnover-related churn, I got almost no new ones, and it eventually became a minor part of my business.

In the blog-friendly 21st Century, I’ve taken those principles further. Substantially all my research is free-to-the-public. Most of what I sell is directly packaged as some form of consulting. (The exceptions would be sponsorship for the research and its distribution, most commonly in the form of paid speaking engagements). For vendors this is retainer consulting only. For users it is project consulting only. For investors I would be flexible on retainer vs. project, if I had any remaining investor clients. But one way or the other, it’s all consulting. In my “freemium” analyst business model,

the research is the “free” and the consulting is the “ium”.

But enough about me! While the market opportunity for hard-core analysts is fairly limited (there isn’t much point in trying unless you think you can become acknowledged as a top expert in one or more fields), it’s in fact a business best practice for almost any consultant to show off expertise by blogging or some other kind of publication. Now, not all of this expertise-parading need be on subjects general enough that we’d recognize it as being a form of what we generally call “IT analysis.” But much could be or is. Therefore,

many consultants are or should be part-time analysts.

If you go back to my tentative taxonomy of influencers, I’m looking at people who fit into Bucket #4 (minor bloggers or forum posters), but might transcend that to seep into Buckets #1 or 3 (two groups of “analysts”). Obviously, these aren’t the only kind of rising influencers. For example, a top blogger in my sphere is Daniel Abadi – he’s a professor, but if you can get him to take the time to behave as an analyst vis-a-vis you, something he only rarely does, you probably should. And then there’s Dave Kellogg, CEO of a vendor, on the board of others, and clearly not always objective – but usually interesting and insightful even so. More common in the future, I think, will be examples like Todd Hoff – a consulting programmer with an excellent and widely read blog.

Today, if a user or other techie tells me I have “one” of the best blogs in the (database or perhaps unspecified) field, and I ask them what the other top ones are, the answers I expect to get back are Hoff’s and Abadi’s. Of the two, Hoff’s sends more visitors to my blogs, so I’m guessing it’s the better-read. Vendor business types might cite Dave Kellogg’s or Merv Adrian’s instead.

The implications of all this for influencer outreach efforts should be pretty clear. I’m still trying to think through what it means for analyst business models. Stay tuned.


2 Responses to “The ever-blurring analyst/consultant line”

  1. Advice for some non-clients | DBMS2 -- DataBase Management System Services on July 30th, 2010 9:35 am

    […] of what I get paid for is in some form or other consulting. (The same would be true for many other analysts.) And so I can be a bit stingy with my advice toward non-clients. But my non-clients are a […]

  2. So who is an analyst anyway? | Strategic Messaging on July 31st, 2010 6:46 pm

    […] Many (not all) providers of free information can also be hired as consultants. […]

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