Telling the truth: analysts tell operators and vendors what needs to be said rather than what is popular

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What is the role of analysts in the telecoms industry, and why are some of them — and their customers — reluctant to talk about it? Priscilla Awde does the research


  
Analyst firms most used by telecoms and networking professionals.
Source: Analyst Value Survey 2014, Kea Company 



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Few are brave or perhaps foolish enough to make multi-million pound investments without the expert advice of the independent telecoms analysts who evaluate markets, players and technologies, identify trends and sift through the burgeoning mass of data for vital golden nuggets.

While analysts’ research may not directly influence C-level decisions, their input adds authority and an external benchmark against which to balance internal findings. Independent third party research informs and supports arguments, frequently forming the basis of what may be strategic corporate decisions.

Added reasons for calling in the experts are to get the bigger picture and to get market, competitive and regulatory intelligence and information about procurement and supply chain management, R&D and product innovation.

Perhaps because analyst firms are so influential — and because they in turn are so dependent on client relationships — many were reluctant to be quoted for this article.

Most analyst firms generally appreciated the chance to explain their work and impact, but both Gartner — the biggest in the market — and Frost & Sullivan refused interviews with GTB.

Some operators too were doubtful, either not wanting comments attributed or avoiding invitations to talk.






John Strand, Strand Consult: Our role is between a priest and a
doctor: we know more than we can say but tell people what’s
wrong and how to fix it



Reluctant to talk 

Almost without exception vendors were reluctant to talk about how or why they use analysts or how influential they are — their use of analysts is apparently not a topic for public conversation. Perhaps they believe such discussions may jeopardise working relationships with analyst firms.

One analyst agreed to speak to Global Telecoms Business only if his name wasn’t used — because his biggest client, one of Europe’s most powerful service providers, refused permission for him to be named.

But one who would talk and be named was John Strand, who is CEO of his own analyst company, Strand Consult, in Copenhagen.

“Our role is between a priest and a doctor: we know more than we can say but tell people what’s wrong and how to fix it,” he says. He suggests analysts give customers the knowledge from which to move, make decisions and increase shareholder value.

“We tell it like it is, tell the reality of a situation and often say what needs to be said rather than what is popular. We provide the intelligent information demanded by clients who want inside information, access to market data and full financial transparency based on our integrity and long term relationships with people in the industry.

“Clients want opinions based on wide industry knowledge. People are tired of ‘yes men’, a relentlessly optimistic view of the world and of endless selling. It’s very important to tell the truth based on extensive experience,” says Strand, who admits that a healthy degree of cynicism helps.

Professional analysts base research and forecasts on experience, industry insight into future trends and possible game changers and statistics derived from defined methodologies.

Their clients pay for and therefore expect highly dependable, knowledgeable, accurate, timely and independent information delivered fast and in easily accessible formats.




  
Paul Budde, BuddeComm: People often have blinkers on
regarding where the competition is and therefore need a wide
approach 
  

Identify over-hypes 
  
Paul Budde is managing director of BuddeComm, based in wooded countryside 100 kilometres north of Sydney, Australia. Reflecting on what is expected of the analyst industry, he says: “The key roles are to help companies see where markets, the industry and consumers are going, to prevent pitfalls, identify over-hypes and importantly show where opportunities are.

“We need very good understanding of client companies and developments in global communications markets. People often have blinkers on regarding where the competition is and therefore need a wide approach not a narrow definition of technology or competition.”

No common thread ties research to particular business users: much depends on the company and specific issue.

Middle managers use research to prepare documents that are fed higher up the chain of command. Others are business strategy decision makers, production line staff and occasionally C-level executives.

The scope of what different analysts do is wide, says Jörg Kerler, a consultant with German analyst practice Orbit. He provided the panel listing typical usage scenarios for technology analysts — see below.

“Some use research to understand technologies, to help with procurement and to understand what issues to raise with vendors,” explains Brett Azuma, the senior VP of research at New York-based 451 Research.

“They may use it to see what customers and competitors are doing or what other operators are doing in different regions and whether those practices may be adapted to their own markets. Research can determine what kinds of companies should be bought or partnered with, identify hot trends or act as a benchmark.” 

  



Joanna Gluzman-Laukkanen, BT: There are multiple examples
of where analysts have influenced and changed C-level minds
or helped secure better deals. 
  

Digital economies 
  
Telecoms analysts’ clients are operators, vendors and regulators as well as the financial companies which advise on and manage M&As. As telecoms morphs into the wider communications and IT sector, so the customer base is expanding into other areas: governments are using analysts to understand how communications drives digital economies.

One of the buyers of analyst companies’ products is Joanna Gluzman-Laukkanen, who is director of analyst relations and market intelligence at UK operator BT.

“Analysts are very good at what they do and have valid opinions,” she says. “I am rarely disappointed but always learn something in conversations. There are multiple examples of where analysts have influenced and changed C-level minds or helped secure better deals.

“It is good to have the back-up of market intelligence for big contracts and the ability to ask questions as a sounding board for decisions. The majority of our executives believe having external checks is a sign of a healthy organisation.”

Only one vendor was willing to comment for this article: Krister Lagerborg, the strategy director at Ericsson.

“The advantage of buying research is that it is unbiased. Research is useful in several ways: as a very good sanity check for forecasting and for predicting and gaining understanding of new areas and what may happen,” he says.

“More tactical information from analysts — who compare products from different vendors — is used a lot by sales teams. Discussions with our operator customers are easier if they are supported by analyst research and our status within the industry can be proved by independent data. We meet analysts around 25 times a year and publish reports for use throughout Ericsson.” 

  
  



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Analysts need to adapt to faster rate of change and customers' needs for soundbite results




Tony Lavender, Plum Consulting: Operators and vendors have
more partners and complex relationships with them which
analysts must understand and know about 
   
  
Analysts have changed what they produce. The scope of reports is narrower because the industry is so diverse and complex that subjects can no longer be covered within one report — but must be broken down into smaller, strategically focused and frequently shorter documents.

“The pace of innovation and change is getting faster so people must be quicker: they cannot spend months writing but need to get material out faster,” explains Tony Lavender, CEO of Plum Consulting in London.

And customers have less time, interest or inclination to read or digest the printed tomes traditionally created by most analyst firms. Now clients want regular soundbites: short, pithy, insightful statements; summaries produced by experts and delivered electronically to mobile devices to be read anywhere, anytime.

Reflecting a shift from written to verbal advice and quantitative data, people want immediacy, easily understood and digestible conclusions supported by data.

Crawford Del Prete, chief research officer at IDC, based in Framingham, west of Boston, explains: “We have changed from blue-sky research towards considering what customers are going through, procurement analysis, benchmarking and understanding what’s happening on the ground and what meets industry needs.”

Lavender says: “Clients still want accuracy, logical and considered analysis and not just sound bites. Operators and vendors have more partners and complex relationships with them which analysts must understand and know about — together with the range of technologies, how they’ll develop and the competitive environment.” 

  
  

  
Jean-Dominique Seval, Idate: We must provide a mix of
PowerPoint and Excel for fast reviews of what's important and
reports written in Word 
  
Jean-Dominique Seval, deputy CEO of Idate, the French research institute based in Montpellier, agrees that, whereas technologists happily read longer, detailed reports, line-of-business managers making quick decisions rely more on short briefings and telephone calls.

“This may reflect a generation gap between those wanting long detailed, printed reports and next generation users wanting PowerPoint presentations,” says Seval. “In what is a big change, we must provide a mix of PowerPoint and Excel for fast reviews of what’s important and reports written in Word.”

Most analyst firms produce frequent short statements supported later by detailed reports — but some provide only daily briefings. Avoiding the delays and expense of printing hard copies, most research is delivered electronically as PDF files decreasing the interval between research and reader.

Laura Holland, global head of ICT research at London-based Business Monitor International, elaborates: “We produce daily country analysis on what companies are doing, significant market changes, regulatory or corporate developments and how changes fit with existing corporate/market strategies plus quarterly reports by country and global pieces.”

Analysts publish tasters of their work on websites and compete for visibility with freely available internet-based information — some of which is authoritative, attributed to known experts, but some of which is of unknown provenance. 

  
  


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Analysts need to be numerate, literate people with communications skills and a dose of scepticism 
  

Analysts value independence and objectivity, gathering information through research, talking to people working at all levels throughout the industry and marrying that with their experience.

Who does it? Analysts’ skills and backgrounds are changing. More are qualified economists, statisticians, engineers or market strategists or have technology or law degrees. They complement those who have many years’ experience working within operators, vendors or regulators, who may also have similar academic backgrounds but whose principal value lies in profound industry knowledge.

Crawford Del Prete at IDC elaborates: “We want top-notch analysts with business, technology and journalism skills who are good communicators, are self-sufficient and can work fast. We are adding analysts with end-user experience who know how to evaluate and procure technologies and how they fit into the greater picture.”

Analysts must know what questions to ask — awkward or not. They must raise unpopular issues and identify and respond to gaps in answers.

Many analysts have a journalistic background — a role with similar writing skills and sharing a healthy degree of scepticism.

Although the ability to write clearly and concisely remains essential, analyst firms now want specialists. Specialism is mandated by the complexity of the global communications market, rapid change and the socio-economic and political implications of new technologies.

While generalists — able to see, evaluate and analyse the overall picture — are still valued, firms are either employing specialists or growing their own. 

  

Numerate, literate people 

“We want numerate, literate people capable of developing new skills and speciality areas and delivering reports on discrete areas,” explains Windsor Holden, head of forecasting and consultancy at Juniper Research, a global analyst company based in Hampshire, south-west of London.

“A number of analysts come from within industry and some direct from university who are trained on the job,” says Holden. “Ultimately we want them to specialise. We want to be in the forefront of analyst research in a particular area with foresight and the ability to identify leading-edge topics, key drivers and trends, potential business models and revenues and [to know] how the market is developing in terms of users’ adoption.”

As the geographical scope of what they do has increased and analysts must cover opportunities in important regions — valuable information for clients’ acquisition plans. That means language skills are important assets. The bigger analyst firms have international offices while others rely on networks of local freelancers.

Customers increasingly want more and more frequent personal interaction with analysts either through face-to-face or telephone interviews, believing verbal communication may lead to frank discussions.

However not all analysts are as verbally persuasive as they are in print or able to hold their own in C-level discussions.

  

Conferences and broadcast 
  
Publishing fewer tomes releases analysts from their offices and into the glare of publicity. There is increasing emphasis on physically presenting findings to wider audiences, delivering more information orally and raising the company’s and their own individual profiles at conferences and through appearances in print and broadcast media.

Analysts must add considerable personal presentation skills to their more traditional and often solitary research work. They must be able to publically explain technologies, their impact and importance, to present and defend research to government ministers, broadcasters and C-level executives and to be able to run company presentations, workshops and industry conferences.

“People are more likely to look for personal relationships with analysts who must be more personable and less deskbound,” explains Ludovic Leforestier, board member at the industry’s trade body, the Institute of Industry Analyst Relations. “Each analyst influences different publics in different ways. Some are very good at press relations, have close relationships with vendors through webinars or conferences and, importantly, gain information from everywhere.

“The role of analysts is changing — they’re more inclined to help make sense of things but are no longer the only source of information. Industry analysts are incredibly influential for marketing and sales, are very individual and companies need to get the right one.” 

  
  




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Polling consumers and identifying behaviour are key as analysts need to look for new information sources

  

  

Kyle McNabb, Forrester: We have changed how we work,
releasing time for more primary research and have hired more
statisticians to help build a database on consumer practices 
  
  
The number and variety of research sources have increased radically. Analysts have deep contacts within the communications sector but — as the scope of the telecoms industry has widened — increasingly outside the sector too, and especially with financial, legal, infotainment, retail, public and manufacturing worlds.

Analyst firms regularly poll consumers to identify trends and discover behaviour patterns. Internet content can be a valuable source of information and sometimes ideas for companies and analysts.

“The starting point for research is consumer material,” says Kyle McNabb, VP of content strategy at Forrester Research, which is based in Cambridge, Massachusetts. “Our international network of consumers helps us understand what people are doing with technology, and how their behaviour is changing so we can see emerging trends and build on that.

“We rely on primary research based on surveys, conduct direct client interviews and assess the strengths and weaknesses of products. Our methodologies have changed, making us more transparent in what we do. We have changed how we work, releasing time for more primary research and have hired more statisticians to help build a database on consumer practices.”

Verifying the accuracy of research depends on collecting data from numerous people and places, says Johan Fagerberg, co-founder of Berg Insight, based in Gothenburg. “We use data from annual reports and regulators in different countries and supply material to them. Credibility and quality are very important for corporate clients – giving them details and showing methodology reinforces the authenticity of work.” 
  
  


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Illuminating the way ahead or catching the mood of the moment: how do analysts choose their topics?
  
  

  
Larry Goldman, Analysys Mason: Most research is based on the
potential for making money now and in the future. It's difficult to
rate hot topics and evaluate when they'll transfer into
money-makers 
  
  

Decisions on most useful topics for research — whether they should illuminate the way ahead or catch the mood of the moment — depend largely on individuals’ experience in evaluating markets and technologies as well as previously successful research.

New subjects are decided by discussions with operators, vendors, regulators and consumers — and increasingly by considering trends in related industries.

Different views and possible new research areas emerge when analysts attend or even run their own conferences. “Lots of topics emerge,” explains US-based Larry Goldman, head of telecom software at the London-headquartered Analysys Mason group.

“We discuss their relevance, whether they will make a difference and what the commercial impact may be for clients who want an idea of how big a market is and how long it may take to develop.”

Goldman believes analysts must base research on an in-depth understanding of business management and technology and provide an economic analysis of the business case.

“Most research is based on the potential for making money now and in the future. It’s difficult to rate hot topics and evaluate when they’ll transfer into money-makers. It takes a long time for new things to have a major impact — especially if they require changes within an operator.”

Azuma at 451 Research agrees: “Topics are chosen by talking to the industry, looking at the full landscape and identifying emerging trends based on what is seen across the sector.

“We are also guided by our clients and their questions. Research is based on direct human interaction — interviews are done with vendors, consumers, marketing strategists, production, engineering and technology operations people and others.”

Customers expect analysts to be ahead of the curve and that their information will help them work smarter, and take ownership of and make better decisions.

“Feedback from clients, constant surveys and discussions about what they liked, valued or want done differently is fed into planning,” explains McNabb at Forrester Research, who suggests that clients that took and implemented advice outperformed competitors and used analysts’ research to change the dynamics of the marketplace.

Strand adds: “The vast majority of operators do not have a feel for what is happening and how it affects their shareholders before it’s too late.

“In practice, we cannot choose the topics we work with through dialogue with our customers. If we did that, then we would not have the information they need before it’s too late.

“Our three biggest assets are our people, our insight and our ability to see into the future. All the information must be translated into something our customers can use and creates value for their shareholders.” 

  
  


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Be open to surprises, check results and don't forget to curb your overenthusiasm in presenting results 
  
  

Research results can sometimes surprise even the analysts. Some look for and expect surprises while others believe that, done properly, research should not discover anything unpredicted.

Given the breadth and scope of the industry some unanticipated results are likely. Few could have accurately forecast the success of SMS or the extent to which mobiles, high-speed broadband networks, smartphones, tablets and social networks would change the way people live and work.

Apple revolutionised the mobile sector — a move hardly anticipated. NFC was predicted to take off faster than it has. Some are surprised at how dominant software is becoming and how it is enriching services.

Although forecasting technical developments seems relatively accurate, it is more difficult to pinpoint the timing of implementation.

According to Azuma at 451 Research people mostly tend to overestimate what happens in the short term and underestimate what happens in the long term.

“We have to be open to surprises and to the fact that the working hypothesis is wrong. We always try to find something in the results and always authenticate results by peer review with our quantitative teams and by checking with vendors and the industry use to ensure we have our facts straight.

“The quality of writing is of prime importance. Editorial teams ensure facts are checked and overenthusiasm curbed and they act as neutral third parties to guard against hype and balance scepticism against fairness to illuminate the strengths and weaknesses in each story.

“It can be difficult to see through the hype cycle; there’s always lots of exuberance when things first start and everything looks like a panacea.”

Analysts must evaluate new technologies, estimate what is needed for them to become a reality, make money and perhaps shape the industry and consumer behaviour. It seems surprises are less about the impact or value of new technologies and more about how and when they become commonplace.

Ultimately successful analysts marry a large degree of scepticism and critical judgement with extensive experience, an ability to evaluate and quantify information gleaned from a multiplicity of sources and present it clearly. Knowing where to look and who to talk to are as important as specialist skills and the ability to foresee trends. 

   
  



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Vendors and operators turn to central purchasing via specialist teams that work with analysts 
  



Mike Short, Telefonica: We centralised purchasing because we
were spending too much worldwide on reports. We deal with
big firms for their reliability, reputation and quality of service, and
niche players for particular issues 
  
  

Who buys the analysts’ research and how do analysts work with clients? Increasingly vendors and operators have set up analyst research and market intelligence teams that buy all externally developed research and negotiate contracts.

This has largely replaced the old channels, whereby analyst firms sold to business managers directly through their own sales force or through aggregators or sales agents and partners to reach international audiences.

But the development of AR/MI teams means selling and buying research is becoming more streamlined and the relationship between analysts and clients more symbiotic. Corporate AR teams brief and keep analysts updated on company news and respond to their enquiries while MI staff buy the content.

These new specialists are replacing corporate librarians and archivists and require internal departments to buy research through them.

It doesn’t always work. “Analyst firms double- and triple-sell into the same organisation, perhaps selling into different parts,” explains Duncan Chapple, managing director of Kea Company, which was founded in Amsterdam but is now headquartered in London. “It is not difficult to shop around and buy information services accurately and assess alternative suppliers.”

Centralised purchasing has the added benefits of avoiding expensive duplication, keeping costs within budgets and ensuring money is well spent and focussed on cost and operational efficiencies.

With centralised purchasing clients get to know the different strengths and weakness of various analysts and their firms and who to go to for what. As relationships deepen, individuals are more likely to share frank views and inside information.

“Research analysts have two lines into an organisation: the learn and earn sides of the business, says BT’s Gluzman-Laukkanen.

“Companies use analysts to help others understand what they are doing and in turn they learn from and are influenced by them. Companies have people looking at influencing analysts, providing market intelligence and ensuring they are included in analysts’ rating surveys which may then be used in marketing messages to customers. Another unit processes and analyses research and feeds it to the right people within the group. The two functions are very different.” 

  


Central purchasing 

BT buys research centrally at group level based on group-wide needs, she says, “assessing and prioritising where the business strategy and focus is. Internal users can say what they need and it is up to my team to find the right material and know which analysts to go to.”



Telefónica also centrally purchases research but allocates smaller budgets for local reports used mostly by national strategy or marketing functions.

“We centralised purchasing because we were spending too much worldwide on reports,” says Mike Short, VP at Telefónica Europe. “We have a better direct dialogue between group functions and analyst firms which compete to be on the central list and regularly brief analysts on what we are doing in particular areas.

“Sometimes people internally don’t know external specialists, which is a very good reason for centralising analyst relations,” he adds.

“We deal with big firms for their reliability, reputation and quality of service, and niche players for particular issues — it is horses for courses. It is more about establishing relationships with people we can work with who are not always in the big firms but may be in small houses. We want analysts who are fit for the project in mind — credibility is essential.”

Short suggests freely available web material is becoming widely used for corporate research, benchmarking or background reading, believing the wide pool of internet material can be a valuable source of ideas and data.

“It may introduce us to smaller specialists. We can see reports on what is happening in other countries and, as part of our membership fees, material from the GSMA and ITU,” he says.

  

Corporate licences 
  
The extent to which research may be shared throughout the client organisation depends on the type of contract. Corporate licences are inclusive — if expensive. They permit wide dissemination, include a set number of reports, some one-to-one time with analysts and bundled add-ons such as representation at internal or customer events.

AR/MI teams want research widely circulated to ensure all interested parties benefit, to discourage protectionism and prevent duplicated purchasing.

Fabrice Abibi, head of Orange’s competitive intelligence unit, explains. “Resources are distributed throughout the group over the corporate intranet. What we buy is influenced by a steering committee made up of different departments which meets regularly to ensure all needs within departments are accounted for, budgets are used efficiently, money is saved and research is used in the right ways and appreciated by departments and business units,” he says.

“Organised conferences or lectures with analysts focused on particular departments are popular internally.”

Orange has “about 30” analyst companies on its list, says Abibi. “The challenge is always to serve internal clients better so lists are reviewed often. We fine-tune our relationships to reduce the gap between what we get and expect from analysts. “Accuracy, the ability to analyse trends and strategy, detect and provide clues as to what could be disruptive and to think outside the box are essential. We want analysts to act as long term partners, fit within the Orange organisation, cover our entire geographic footprint and anticipate our needs.”

Most corporations say that they use a mix of the large generalist firms and smaller niche or boutique firms which, typically specialising in particular aspects of the market, are frequently led by experienced, highly qualified analysts some of whom are not shy of using that experience to say exactly what they think, delivering bad along with good news.

“We compare and contrast different analyst houses, aggregate opinions and create a tapestry approach,” explains Andrew Beurschgens, head of market intelligence at UK mobile operator EE.

“They all have different specialisms and differences of opinion. We rank analysts on clarity of thinking and communication, tend to think they have more answers than we have internally and use them mostly on the forecast side,” he says.

“Their influence is indirect and their value is in delivering informed opinions on marketplace dynamics to support, back up or challenge internal views. We internalise their data, add our own views and disseminate that throughout the company.” 

  

Rating and reputations 
  
At BT, Gluzman-Laukkanen explains how her colleagues measure the performance of analysts: “Our users can rate and value analysts,” she says. “Rating analysts is self-evident — bigger houses aren’t big for nothing: they do deliver and tend to have better reputations.”

However, biggest is not always best. Small analyst firms can be more influential, independent, accessible and cost effective and just as respected. Big or small, analysts introduce clients to a valuable and wide network of international and national contacts.

Comparing big and small firms is complicated because they have different strengths and weaknesses and smaller companies tend to be specialists. Although unwilling to do it publically, it is the job of AR teams to rate individuals and firms according to several criteria including integrity, independence, foresight and accuracy.

“Analysts are as varied as research firms and are changing from verifying facts to advisory services. There are very different perceptions of how independent and ethical analysts are: research is not often very terrible even if a lot is biased,” reports Chapple at the Kea Company.

“Customers are very savvy and can usually tell how independent research is. Ten or 15 years ago vendor-funded research bordered on the unethical or was branded advertorial. Now analysts get sponsorship but still forbid anyone having a say in what’s written or the results.

“Customers must pick and choose to ensure they have independent, impartial, accurate research. They should compare different answers from different analysts — a practice encouraged by market intelligence people — but business managers want large strategic deals with one very large analyst company, which pushes M&As in the market.”

And mergers are a continuing feature of this business. Datamonitor and Ovum have been bought by Informa; Yankee Group by 451 Research; Current Analysis and Pyramid Research by Progressive Digital Media; and Business Monitor International by Fitch Solutions. Meanwhile IHS Technology has bought several companies including iSuppli and Screen Digest.

Further consolidation is expected as mid-sized companies are acquired — but the silent Gartner still leads the big three, ahead of Forrester and IDC. 

  



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Drifting into consultancy: analysts share the same skills and the distinctions may be starting to blur 
  
  
Most big analyst firms have consultancy practices: consultants draw on analysts’ expertise and sometimes collaborate with them. Some analyst firms use research to upsell consultancy services.

The difference between the two may be defined in terms of independence and scope. “Consultancy answers particular questions for a particular client and problems are well defined,” explains Analysys Mason’s Larry Goldman.

“All answers are very specific and geared to that company and its decisions. Analytical research is more broad-based, written for more people — a bigger audience — and is not targeted at one client. Despite [people] having similar backgrounds, different skills are needed: research work requires specialty technical knowledge while consultancy focuses on business strategy — how a particular business works and operates.”

But distinctions may be blurring. Dan Baker, research director at the Technology Research Institute in Pennsylvania, describes reports as “packaged consulting”, adding: “As objective observers, analysts need to cooperate with companies to get information but they must be honest and credible and say things as they are without chastising companies — but giving people good information in easy-to-read reports.”

He suggests it is difficult for operators to get unbiased information from the usual vendor sources, so need analysts to balance ideas culled from different interviewees.

Guarding their independence, many analysts prefer to remain separate from consultants, who work on a one-to-one basis on issues defined and paid for by the client.

On the other hand, choosing their own topics for widely applicable research distributed on a one-to-many basis, analysts should not allow outside influence to determine research conclusions even when clients specifically request work.

However analysts regularly poll clients on areas of interest for possible future research.  
  
  


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Analysts claim real influence on companies and even governments but it's hard to quantify the effects



  
Duncan Chapple, the Kea Company: Our analyst value survey
shows that the top issues for telecoms and networking people
are broad challenges like cloud, outsourcing, big data and
security. That's why generalist analyst firms are now more
influential than telecoms specialists 
  

Big or small, the effect of analysts is variable. The aim of research is always to be accurate, credible and at least one step ahead of customers, to explore the short, medium and long term view of technologies and their regulatory and socio/political implications.

Customers expect a high level of strategic thinking and understanding of what will benefit their business and industry and in what ways both are changing.

“Our analyst value survey shows that the top issues for telecoms and networking people are broad challenges like cloud, outsourcing, big data and security. That’s why generalist analyst firms are now more influential than telecoms specialists,” believes the Kea Company’s Duncan Chapple.

Most agree that independent research, supported by statistical data and thorough market knowledge, regularly indirectly influences the actions companies and even governments take.

However, the extent to which analysts’ work directly influences corporate decisions is difficult to quantify. There is evidence it may directly affect procurement and M&As, whether corporations invest or not in countries or companies and which particular vendor to use and for what.

Research may support corporate re-branding, refocus products and help companies define strategies and five-year plans.

It can liberate them from an over-reliance on technology vendors, making it easier to define their own strategy and may influence trends.

Strand Consult’s work on poor mobile coverage in Denmark reportedly had a significant and direct effect: laws and regulations changed, operators’ rents reduced and equipment purchases were influenced — along with M&A activity.

Its early, freely distributed report warned mobile operators against the iPhone’s business case.

New research into net neutrality and the effect of EU’s roaming policies on arbitrage are other expected areas of direct influence. To prove the point, Strand Consult publishes past reports on its website.

In Australia, Paul Budde of BuddeComm says his firm’s research on the transformative nature of broadband led to the formation of the UN Broadband Commission for Digital Development and directly affected the Australian government’s decisions on the National Broadband Network and influenced America’s National Broadband Plan.

“We are very outspoken, which creates vulnerabilities, but we have made a mark in terms of influence,” says Budde.

“We give outside-the-box advice, stick our necks out and dare to say what’s not popular. Some regret not having taken our advice or have benefitted from taking it. Our customers make decisions, not BuddeComm — which only provides advice.”

Punching above his weight, Budde believes credibility lies in not making mistakes, delivering what customers don’t know they want and providing honest analysis and valuable outspoken advice.

“Clients need help in deciding what’s possible and in taking a holistic approach to strategy. They need to place a problem within the broad landscape and policy advice to foster the new digital environment and understand how to solve critical problems,” he says.

“Analysts must understand how sectors work, where problems are and how telecoms/ICT can help resolve issues. They must be familiar with and have high level and detailed knowledge of new sectors and be able to deliver strategic research and information.”

Research cannot always be totally accurate but, admitting that sometimes the timing of developments is longer than predicted, Budde believes the important thing is to get the strategy right and recognise it is in the interests of corporations not to jump on bandwagons too fast.

Similarly outspoken, John Strand believes in cutting through hype cycles which too often suggest new technologies or products will increase revenues and decrease opex. “European 3G licences were a good example of bad information which promised the moon and caused operators to overpay,” Strand says.








Technology analysts: a small industry with a big impact 

Typical usage scenarios for technology analysts 
   

Strategic planning
  • Determination of market size and market shares
  • Market modelling and forecasting
  • Identification of (technological and other) trends and innovations and growth areas, eg for product strategies, technology roadmaps, research and development strategies and corporate foresight
  • Obtaining insights and guidance for strategic decision-making
  • Competitive intelligence, ie, provision of information and data on competitors and their products, services, prices, etc
  • Monitoring market developments and the regulatory and business environment (most analysts travel all over the world, visit the major events and know a lot of savvy people)
  • Identification and evaluation of emerging and potentially disruptive players and start-ups 
  • Insight and advice for mergers, acquisitions, investments, divestment, etc


Marketing and sales support
  • Obtaining information on (potential) clients and gaining insight into B2B and B2C customer behaviour, attitudes, opinions, needs, demands, preferences, priorities, purchasing intentions, technology spending, etc
  • Advice and insight regarding go-to-market and sales strategies 
  • Informing or educating potential buyers, investors and the media about one's products, services, strategies, etc
  • Recommending products or services to potential buyers for consideration, shortlisting etc (if they deserve it)
  • Advertising purposes, ie obtaining permission to quote an analyst if one's products obtained good ratings from this analyst
  • Preparing sponsored white papers for promoting a vendor/product (not all analyst firms are ready to do this!)
  • Providing expert speakers for (marketing or sales) events 
  
Procurement, supplier and partner management
  • Obtaining product and vendor intelligence to support technology investment decision-making and technology supplier/product selection
  • Monitoring the supply chain (eg development of prices, supply situation and risks)
  • Evaluating or benchmarking suppliers or partners
  • Support for contract negotiations 

Increasing operational efficiency
  • Obtaining benchmarks and key performance indicators for one's industry or type of operations 
  • Identifying best practices and obtaining case studies from other players
  • Demonstrating the return on investment of technologies, products, innovations, etc
  • Inspiring the workforce by conveying new ideas, concepts and solutions (eg for performance improvement)
  • Relieving their customers from the necessity to build huge in-house capacities for analyst research

Enhancing knowledge worker productivity
  • Providing a research report library as repository for education of employees on topics relevant for their daily work
  • Shortening the information gathering cycle for employees by supplying introductions, summaries, complete overviews, detailed analyses etc. on topics or industry segments of interest (analysts usually are acknowledged as a credible and authoritative source, and they are available for queries, clarifications, definitions, etc. relating to their research output)
  • Enabling employees to make more informed (and thus better) decisions
  • Providing webinars, workshops, coaching, training, briefings and other educational events 
  • Facilitating networking with peers through dedicated membership services or analyst events (conferences, roundtables, etc)
  • Obtaining a source of reference that can be quoted to support employee's assumptions or statements towards all kinds of stakeholders (management, colleagues, partners, customers, investors, industry associations, government bodies/regulators, the media, etc)
  • Obtaining quotations, charts, tables etc. that can be integrated into knowledge worker's output (presentations, insights, reports, etc)
  • Review and discussion of concepts, ideas and strategies


Professional services and staff augmentation
  • Answering ad hoc inquiries on topics pertaining to the analyst firm's area of expertise (analyst subscriptions are a rather cost-effective way of providing access to advisory services to a large number of employees)
  • Obtaining a cost-efficient alternative for projects to be carried out by management consultants or primary research institutes, or (more frequently) providing input for preparing or supporting consulting or primary research projects
  • Bespoke/customer-specific research and advisory engagements (many analyst firms also act as consultancies or even have dedicated consulting teams, and frequently they have deeper subject-matter expertise than management consultants)
  • Knowledge process outsourcing for complementing (seldom replacing) internal research staff

Source: Jörg Kerler, consultant, Orbit Gesellschaft für Applikations- und Informationssysteme 

  



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