Analysts’ Dirty Little Secrets

NetScout is crying foul against Gartner. The NetScout lawsuit against Gartner has raised the ‘pay-for-play’ specter once again. Whether this is a case of a vendor just peeved at their spot on the Gartner Magic Quadrant or they have a legitimate grievance, I am not in a position to judge. Whether NetScout will be successful with their legal foray is for the lawyers and judges to say.

However, the latest outcry against Gartner should ring warning bells for the mega-analyst firm and others too. The fact that ‘pay-for-play’ has once again raised its ugly head is symptomatic of the lack of regulation and transparency in the Industry Analyst Business.

The lawsuit calls for ‘structural reforms’ similar to those imposed on the financial system in order to ‘remove the conflicts of interest and unfair and deceptive business practices’. Incidentally, this is a topic that has been discussed on this, and other blogs before.

What’s the BIG Deal?

As long as Gartner and the rest of the industry refrain from implementing some kind of industry-wide ethics or practice code, this will continue to be an issue. I believe that regulation is in the industry’s best interests. After all, if there aren’t really any secrets, what does everyone have to hide?

To start, I would suggest that each firm is required to make public their client list including the nature of that relationship. Of course, analysts will have relationships with all players in the industries that they cover. Knowing who their paid clients are should afford some transparency. This transparency will enable businesses to beware of a possible conflict of interest before undertaking any interaction with the analyst firm (paid or otherwise). Secondly, best practices for separation of church and state (analyst services/sales) should be implemented (granted this will be more difficult in the smaller firms). Analyst companies must make a concerted effort to weed out improper sales practices that may lead to misunderstandings (or lawsuits).

Need for change!

Regardless of the outcome of the lawsuit, Gartner being the industry leader (with no one else even close in their quadrant) must adopt these practices for the sake of the industry if not their own image. It’s time for Gartner and the industry to do away with the smoke and mirrors. It’s high time to pull the curtains back and get a good look at what’s going on behind. Only then can we move past these discussions and focus on delivering credible research.

One thing is for certain, the lawyers are pay-for-play!

 

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Jonathon Gordon
About Jonathon Gordon 1 Article
Jonathon has been lurking around the Telecoms and Internet space for the last 20 years. He is now a man on a mission – that being the reformation of the Industry Analyst business. He is working with his co-conspirators on transforming the Industry Analyst world forever as an Expert with EMI.

1 Comment

  1. Jonathan,

    Well done. The reform of the analyst profession is a noble and challenging mission to be sure!

    Having been an industry analyst for 20 years, the subject is of course near and dear.
    Here are some quick thoughts:

    1. The conflict of interest problem has gotten worse in recent years because the analyst profession has been squeezed by the same internet, blogging, and market information explosion that has caused all kinds of IT magazines and newsletters to fold.

    2. How does the power of a Gartner or IDC compare to the good-old-boy relationships that IT suppliers have cultivated with their most important customers?

    3. Gartner was actually born through a law suit similar to NetScout’s. In its early days, IBM sued Gartner for violating non-disclosure. And this law suit essentially put Gartner on the map, because if IBM is that interested, people figured Gartner must really have inside scoop. And 30 years later, NetScout is getting some wonderful publicity from suing Gartner!

    * * *

    Good luck in your quest, Jonathan. And if you have a plan to clean up the analyst swamp, I’ll wade in and help you wrestle a few alligators.

    Dan Baker

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