Screen Shot 2014-04-08 at 10.21.40

Informa T&M rebrands as Ovum

It might look like Informa Telecom & Media (ITM) has been rolled up into Ovum but it’s really the other way around. The IIAR had the best, shortest and first analysis of the news. Over the last year, Ovum’s integrated into ITM through a series of moves very similar to Yankee’s integration into the 451 Group. It has been the case for some years that Ovum was financially and legally part of ITN: the back office functions were tightly integrated before Informa’s Steve Hotham took on the job of finalising the integration. The HR, research and sales organisations were already integrated last year, as they are at 451 with Yankee (where former Ovum MD Brett Azuma oversees research). There are few efficiency savings left.

As Ludovic Leforestier has pointed out on the IIAR blog, the basic outlines of this step have been clear for some time, and there’s little real news. As we explained last year, Informa ate Ovum.

  • The Ovum name is being kept more because it’s a valuable brand in the core telecoms market: the painful reality has been outlined before. It’s much stronger than the Yankee brand, as the Analyst Value Survey has shown. However, as the lack of mention of 451 on the Yankee homepage suggest, buyers of analyst firms won’t want to roll a brand into the parent until the brand premium has gone.
  • There will be little shift towards investment in Ovum, for reasons we have explained. We’ll continue to see the departure of top analysts like Adrian Drozd, Carter Lusher, Jan Dawson, Jonathan Yarmis, and Ian Jacobs, and key staff like sales lead Damien McInerny (now at 451) and marketing lead Rosemary Masterson (now at CEB).
  • That turnover also reflects the culture clash, which now means that few ‘legacy’ Ovum analysts remain.
  • The IIAR also raises a smart question: what does this mean for Ovum’s influence outside telecoms? In Europe, it’s probably still a Tier One firm. But we struggle to see how the IT team will have the same share of mind without a dedicated salesforce and inside an even more telecoms-centred business.

Bottom line: Informa has completed the integration of Ovum into Informa Telecom & Media but, because of the higher value of the Ovum brand, ITM is taking that name.

Question: Can Ovum’s IT team increase its influence in the market?

Respondents to the Analyst Value survey in September and October 2013 commented on analyst independence

You told us which analyst firms were most, and least, independent

Respondents to the Analyst Value survey in September and October 2013 commented on analyst independence

Respondents to the Analyst Value survey in September and October 2013 commented on analyst independence

Analysts firms vary massively in their independence. That’s one finding of our 2013 Analyst Value Survey, which shows the opinions of 352 users of analyst research.
Ovum, NelsonHall and Redmonk stand out as firms widely seen as highly independent, with strong scores for 451 Group, Pierre Audoin Consultants, Saugatuck and TBR.
Perhaps unsurprisingly, many of the firms that are most seen as independent are also seen as the least independent, which draws down firms like Gartner, Forrester and IDC in our chart. Thanks go to Ludovic Leforestier, who suggested this way of charting the data for us last year. It’s taken a while to get around to it; we’ve been spurred on by the forthcoming IIAR forum discussion on ethics.

No study is perfect, and it’s worth making some points about this chart. The more respondents scored a firm as being independent or not independent of its commercial relationships, the further its data point is over to the right. Don’t pay too much attention to the data over on the left: it’s there for entertainment value only, and we’ve blanked out a few firms where the number of responses was low.

The higher up on the chart a firm is, the more it’s seen, on balance, as producing research that’s independent of its commercial relationships. We’ve shown that number as the percentage of people scoring that firm as independent, divided by the total of the numbers that scored in either independent or not independent. {For example, Gartner was selected as most independent by 67 people but as least independent by 62. Gartner gets a score of 52% [that is 67/(67+62)] and is the furthest to the right because the total number of people selecting it in either of those questions [129, which is 67 plus 62]  was the highest out of the firms in the survey.}

One of the options was “Other…”, which allowed people to write in the names of smaller firms. It’s the data point without a label that’s between Everest and IDC. There were lots of them and, as you can see, as a group they are averagely independent. That point is unlabelled, since it doesn’t add much.

The black line rising across the middle of the chart is a trend line automatically added by Excel. It suggests that the more people there are commenting on a firm, that the more independent it is. Perhaps that means that the more eyes there are on a firm, the core careful it is about its independence.

Some of the firm had scores that were so close that the labels went on top of each other. So that the names are legible, I’d dragged a few down so the labels underneath can be seen. I’ve done that by picking up the label that’s longer (since the shorter one is hidden under it) and pulling it down a little. When you see labels that are very close, that’s what happening. So, for example, Saugatuck and TBR had essentially identical scores. So did GigaOM and Current Analysis. BARC and Canalys were also evenly matched… you get the picture. Where there’s one dot and more than one label, their dots are on top of each other. One day we’ll all have 3D monitors.

We’ll conduct this survey again in September: with more responses, we’ll have a more accurate picture of users’ perception of analyst independence.

P.S. One useful caveat about this chart came from an analyst who gave feedback on it: this chart is “all about perception”.  Needless to say, that is exactly what surveys do show. Analysts’ clients are the people who are best able to make an informed judgement about the relative independence of these leading analyst firms, and there’s no more effective alternative to a survey. We don’t want to be complacent about the research, so we remain open for suggestions on how to improve the study.

Independence from commercial relationships

Is there a pay to play problem in the analyst industry?

In the Analyst Value Survey every year, we ask participants which firms in the analyst industry are most, or least, independent. Rather unsurprisingly the biggest firms get the most votes in both categories. Here’s a chart to show data from the most recent survey. But some firms get only in the most independent top ten (NelsonHall, Ovum, Constellation) and some only get in the top ten for least independent (Aberdeen and Frost every year, but now I’m sad to see ISG and TowerGroup there too).

Everything I have seen from twelve years running this survey suggests that there’s no major shift going on, but there are some trends. I’ll be writing more about it, but sharing this chart is a start.

Screen shot 2013-05-03 at 22.40.02

The future of the analyst industry

There’s nothing paradoxical about the success of the analyst companies over the last recession. The analyst firms are more needed in tough times, and they have worked hard to innovate. However, some of the firms are pushing up against the limits of the value they provide. The stock market has a nose for this, and we think there’s something to learn from the fact that Forrester has done well while Informa has slipped back.

To give a snapshot, we can compare three brands using their shares. In the chart on the left, showing the year to date, we can see Forrester’s strong growth, Gartner’s steady growth and Informa trailing behind.

To get some background, let’s compare come of the big and small numbers, using UK filings as an example. In 2011, the last year for which we have data for all the firms, Ovum Europe (a unit whose revenues are reported separately) grew revenues by almost one third. Plum Consulting grew over 20% and Forrester’s revenue grew just below that. Revenues were stable at Analysys Mason, Datamonitor, Gartner and Informa (a massively complex group of hundreds of companies, in which analysis is a small part).

In a nutshell, almost all the firms are holding steady or they are growing.

What’s behind the firms that are growing in revenue, or in profitability? What are the lessons for the future

Innovation in value is a key trend. Forrester and Gartner continue to benefit from their role-based pricing. Forrester has an extra boost from the success of its leadership boards. Ovum has benefitted from launching a serious events business, powered by Informa, and by bringing its consultants into its research practices to deliver higher quality consultancy most cost-effectively.

Quality is being rewarded. Working here in Europe, I hear a lot of discussion about the services offered by IDC, Nelson Hall and Ovum to track spend on services like outsourcing. The highest quality provider is picking up the business.

– The answer is more insight, not more greater volumes of research. Gartner is, perhaps, large enough that it doesn’t need to add analysts. But there’s still an issue with the consistency, accessibility and usability of research. Many firms are still ten years behind Current Analysis’s clear presentation and Forrester’s crisp prose. And volume is a poor substitute. Analyst firms are not expected to produce newspapers, and they don’t need to comment in a shallow way on every development.

These are three key things that analyst firms need to develop, and those that do will make the most of the next few years.





The clash of cultures between Ovum, Informa and Datamonitor

Mergers are tricky things, and the mergers of businesses based around knowledge workers are especially tricky. It’s not hard to see why. Ovum, Informa and Datamonitor each developed different cultures, each of which reflect the different goals and preferences of their owners, and the intricacies of English business.

Ovum was founded by a group of close colleagues. Ovum was born as an adult: it jumped out of Logica with a clear form and a certain standard to keep up to. Many of the team were Oxbridge graduates, and the rest were eminently clubable. It was collegial and proud, and the the motor of that pride was its self-conception of quality analysis and consulting into IT and telecoms. Demanding, and sometimes brutal, alpha and beta review meetings, a little like a Don Rag, ensured that the firm’s qualitative analysis was rigourous and well-constructed. It’s fair to say that experienced, high-profile analysts could hide behind quality, and that the pace of work was often in the analysts’ hands.

Datamonitor was different even thought its founders, Mike Danson and Doug Wilson, were also Oxbridge trained. They started off modestly, with the analysis of frozen foods from an office over a shop in an down-at-heel suburb of north-west London. The business was run tightly. Even after the business floated on the London Stock Exchange in 2000, the firm’s offices on Finchley Road (still outside the city centre) were threadbare and filled with younger people whose identities were guarded. Datamonitor’s analysts were not given bylines in their reports, nor were their profiles on the website. Their transfer value was supressed.

Informa was different again. Informa has developed a profit-focussed culture which is transparent, meritocratic and free from Oxbridge roots: the firm’s current and past staff have most often been educated at the positively proletarian Leeds, London Met or Westminster universities. Informa was more hungry than it was proud. The managers were focussed on the sort of measurements which Ovum rather trusted its analysts to be adult enough to look after: goals, times, productivity and profitability. People with successful performance got pushed forward, even if their work wasn’t especially insightful. Insight, after all, was not Informa’s core business. Informa’s engine is work that can be done by people quite early in their careers: events, training courses and highly structured information.

These cultures produce different sorts of research. Informa and Datamonitor used younger staff with skills more akin to market research and journalism than to industry analysis, which requires some domain expertise. Less experienced analysts are more easily manipulated and intimidated by vendors. It took Ovum analysts many years to develop the knowledge, industry connections, rigour and all-round nous needed to produce independent analysis. In today’s market, when vendors push more and  analysts thus tend to be less confrontational, that culture is needed. Ovum has been on a cultural journey over the last several years: moving towards Datamonitor’s culture and then towards Informa’s. In our next post, we’ll discuss how these approaches meet the future needs of the analyst firms’ clients.

P.S. My former Ovum colleague Heather Stark added the comment below this post on LinkedIn