Posted tagged ‘Gartner’

Gartner and AMR: Shrinking Demand for IT Advisory Services

December 7, 2009

After I get a question for the third time, I usually try to write about it in my blog. I’ve had more than three inquiries from TSIA partners asking my thoughts on the continued consolidation among IT advisory firms as Gartner announced last week they were acquiring AMR, so here goes.

As a former analyst from one of the big IT advisory firms, I certainly have a perspective on this.  And here it is:  the demand for IT advisory services has been shrinking as:

  • Large IT outsourcing projects means fewer companies are making IT decisions internally.
  • Cloud computing/OnDemand/SaaS minimizes demand for IT as well as minimizes IT’s role in a larger percentage of corporate infrastructure.
  • Business users become driving force behind product purchases as OnDemand and Web services put end users in the drivers seat.

Add to that the economy and tighter budgets, and there simply weren’t enough IT budget dollars to keep Gartner, Forrester, AMR, Meta Group and Jupiter Research (et al) afloat. Consolidation is the logical step.

I made the move in 2006 from IT research to business user focused research, and in hindsight, my timing was pretty good.  Business users continue to gain more clout (particularly in services, with our climbing revenues and strong margins), and personally, I find working closely with business users on functionality to meet unique business problems much more rewarding than discussing Linux versions with IT admins.

I do worry about the impact on IT, with fewer voices analyzing the market and giving advice, particularly when the focus from the largest analyst firms is always the big companies. Fewer voices talking about niche areas–like AMR’s expertise in supply chain–means less coverage for smaller and more innovative solutions, fewer options, and no alternative views to the bully pulpit sermons. But that just allows business users to assume even more control–they can look to industry groups such as TSIA for highly tailored advice based on the success (or lack of success) of peer companies.

The big losers are ‘best of breed’ and smaller vendors, who have to compete with Oracle, SAP, IBM and HP for analyst time and mind share. I’ve had complaints from partners for years now that they can’t even get a briefing with the big name analysts unless consulting dollars are attached, and the cost to buy your way in for inclusion in a Magic Quadrant or Wave is too high, with too much risk:  the small companies don’t have the lobby power the big companies do to influence findings or ask for edits.

And that’s my 2 cents! I hope there is a smooth transition for some excellent AMR analysts, like my friend Noha Tohamy. Thanks for reading!