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The 100 countries on the analyst influence map

The Analyst Equity blog had visitors from exactly 100 countries over the last six months. 42% of visitors are in the United States and a further 42% come from seven other counties, all of which have notable communities of analyst relations professionals: (Australia, Canada, France, Germany, India, the Netherlands and the UK).

What’s fascinating are the 92 other countries. There’s a huge growth of readers in Asia: The top 30 sources of readers worldwide include China, Hong Kong, Israel, Japan, Malaysia, the Philippines, Singapore, Taiwan, Thailand and the UAE). Now roughly one in every eight visitors to the blog comes from Asia. Indeed, when I look at the 20 cities sending the most visitors, it’s thought provoking to think that there are eight in the US (Austin, Boston, Cambridge, Chicago, DC, NYC, Portland and San Francisco) and in Asia-Pacific there are also eight (Bangalore, Chennai, Karachi, Mumbai, New Delhi, Singapore, Sydney and Tsukuba).

Africa is also being more visible: while most of those visits come from South Africa, the other visits are spread across more than a dozen countries, including Kenya, Nigeria and the Mauritius.

These 100 countries show more than who shares your interest in this site: it shows the footprint of analyst influence, since interest in AR is determined by the analysts’ impact and their location. The latter is a major factor, since the 100 networks sending the most visitors to this website include the 451 Group, Aberdeen/Harte-Hanks, Canalys, the Corporate Executive Board, Current Analysis, Forrester, Gartner, IDC, the Informa group, Info-Tech, Pierre Audoin Consultants and the Technology Evaluation Centers. Surprising, a few not-for-profit organisations send notable numbers of readers, including the American University, CUNY, NYU, UCSB, and the US Navy.

It’s quite humbling to think that visitors with computers using 97 different languages have visited the site (the top 3, interestingly, are English, German and Japanese), but is also shows the global spread of the AR community.

That means something important for analysts and for analyst relations managers. We are no longer in the world where the majority of people concerned with analysts are in the US. Both the analyst firms and AR professionals need to consider how their tasks need to shift to meet that new reality.

High-Tech after the world financial crisis

Clearing up after the financial storm after the last weeks, we see a rather different world economy. After the stock and currency revaluations, only 36 of the 100 firms with the largest market capitalisation have headquarters in the US. In Europe there are 48. Despite (or perhaps because of) the huge volume of US dollars pushed out onto the markets the ‘green back’ is falling again. As a result, commodities prices in dollars will rise. That will push up prices in the US, and especially the price of imports.

That means that economic growth will move power (both spending power and political power) around the world. The Chinese consumer, rather than the US, will be the key consumer for export-led growth for many countries. In Australia, as in Africa and Asia, the US will recede in importance. The BRIC economies will remain able to grow, probably at a slower rate than before, even if the US experiences a long recession.

However, these are long-term trends. For 2008, we maintain our view at the start of the year that the world economy will continue to grow. While profit margins will be tightened in the US, we don’t think that there will be a prolonged recession there.

This means that three trends will reassert themselves:

  1. Exports will be concentrated in the growth markets.
  2. AR managers need to readdress international markets. While analyst influence remains low in China, analyst influence will continue to grow in other Asian, Arab and Latin American markets. Analyst firms will continue to expand their staffing their and, because buyers’ needs differ, analysts will often give different guidance in growth markets from that of their colleagues in mature markets.
  3. The relationship-building approach we have called ‘Recession AR‘ will mean that the focus has to shift towards helping analysts with their personal medium-term goals as well as their short-term research priorities. The short time-orientation of Twitter needs to be supplimented with a long-term, appreciative inquiry, approach towards helping analysts.

How can you stop an economic downturn reversing your services AR successes?

The reality of the credit crisis and the potential for an economic downturn is a hugely important dynamic in our market. Lighthouse is proposing holding a seminar in May to share and discuss various aspects of the situation and tactics that will help minimise the potential AR impact.

What should your new AR Modus Operandii be?

To enable success you should look to focus on better understanding precisely what are the key needs (business and personal) of your Tier 1 analysts and help them meet their needs. Balance this with a very clear understanding of your organisation’s imperatives in the downturn and match the analyst wins you deliver (and hence spend valuable resources on achieving) to those needs which ensure your leadership continues to value AR as absolutely critical to continued business success. In addition to the above, you should also work on:

  • Continuing to prove AR ROI, through better measurement, better data collection and better organisational buy-in
  • Understanding where the downturns’ impacts will be on your organisations business areas, geographies and industries. Use this knowledge to help determine your priorities
  • Understanding what are your organisation’s markets that are counter-cyclical to the downturn and focusing sufficient resources in these areas
  • Identifying what obstacles internally might be created by the anxiety generated by fears about the downturn

And finally, as Services AR teams are being “swamped” with services vendor “quadrant” ratings requiring huge efforts, you will need to carefully manage the demands these place on your resources against the new imperatives brought about by the potential downturn. Services AR life is certainly not dull !!

Please provide your comments via the Blog or email me at mtilling at lighthousear dot com

African market shows similar trends to Middle East

Analyst firms find that the Arab world can be a very effective route into Africa more broadly — if analysts can respond to the different customer demand across those countries.

Initially, of course, the money has been in more market research work. However, Lighthouse’s feel is that there’s an opportunity for analysts to also ramp up syndicated research and do more end-user studies as well. Very little content being done on either Africa or the Arab world. We see many of the dynamics in Asia’s analyst market — lack of competition, high growth markets, and IT vendors looking intently at these markets to help with growth — also at work in Africa and the Middle East.

A good example of that is Springboard Research, a Singapore-headquartered firm that’s growing like Topsy (as Twain would say). They have have done a number of projects across the Middle East and Africa over the last 15 months and, as with other firms, they find that the market opportunities are booming. In fact, it’s a bit like shooting fish in a barrel: many clients have mentioned that they have little choice in the market and are looking for alternatives.

What’s interesting is that Springboard is investing aggressively there. It is in the process of setting up another offshore research centre, this time in Morocco, to better cover the region. It is also staffing analyst offices in Dubai and South Africa. In the mean-time, the big brand firms do not see the ‘MEA’ market as a priority.

Western firms struggle to meet Arab demand for analysis

The last twelve months have been an especially exciting time for technology across the Arab world. There is increasing, and unsatisfied, demand for analyst insight and opinion, especially in the Gulf states. That has created the opportunity for a few research and analysis houses to set up in the region, probably the most credible being Arab Advisors Group.

In terms of the diffusion of new technology, the region has proved itself to be an ‘early adopterpar excellence with sectors such as tourism & travel, retail, finance and, of course, e-government leading the way in terms of deployment of the latest technology. That is set to accelerate. Many Arab businesses now have the budget, infrastructure and skills required to become true innovators, although consumers face a digital divide.

However, these early adopters often have high expectations of vendors, and of industry analysts, and have a low tolerance for risk. It’s the sort of trend that, in other markets, would be described as a ‘flight to quality’. Buyers want high quality brands, with customized solutions and leading-edge insight. That’s reflected in many ways.

  • Preference for solid brands. One of my contacts in the region recently commented that the value of positive perceptions is very high. That means that good reputations are essential for winning business in the region. That’s one reason why Microsoft has done so well in the region. IT directors in these areas need to identify early technology propositions that give them what they need, especially in terms of improved productivity, and that is easy to present to managers and stakeholders.
  • Demand for localization. Of course, the routes to stronger reputations are different in the Arab region – and not every tech firm has responded well. There is growing, and widespread, demand for Arabised applications, it is clear that some global technology players are committed to a special effort for the Gulf and the rest of the Middle East (again, including Microsoft).
  • Innovators, not ‘late majority’. In the past, it was more typical for Arab organizations to look to case study references for proof of implementations in Europe and the USA prior to planning new IT and business process projects. They were, in some ways, conservative buyers that were part of the late majority. Carrington Malin, CEO of the region’s leading agency, SpotOn PR, told me “Today, many large enterprise customers in the Middle East have their sights set on business innovation and taking leadership positions that are recognized by their peers around the world. There’s a growing desire to be first and best and so they want insight, opinion and advice from the cutting edge and are willing to pay for it. That creates high expectations for both analysts and vendors.”
  • Sunk costs count. In the Anglo-Saxon world, firms are more likely to substantially rework their IT infrastructure from top to bottom. However, many managers in the Gulf economies feel that to remain competitive they need to find a multitude of ways to leverage their firm’s existing technology investment and bring about greater, productivity and therefore profits. That produces a real communications challenge, for example, with Microsoft’s latest operating system, Vista. Inside the Arab world, Vista has to be sold as a way to leverage investments in XP, rather than being presented as a major break.

Financial analysts and IT vendors are ahead of the industry analysts in understanding those differences, facing an increasing demand for research and analysis as the scale of investments gets larger and Arab investors move into regions and sectors of higher risk.

Looking at the industry analysts in the Arab world right now, it’s still very early days for the big firms. The region is still very much a consumer rather than a producer of analysis. IDC has had a research team based in the Middle East for some years, most others simply have sales representatives. Gartner, Aberdeen, Forrester and other sell there, but none have analysts based here. Ovum is also active, but again analysts are not based here. That greatly limits their ability to adapt to local needs.

Experton has also a strong base in Dubai. While the other firms sit back, it is they, and consulting firms like Booz Allen, who will benefit the most from growing demand for industry intelligence.