October 6, 2012

Analyzing big companies is hard

Analyzing companies of any size is hard. Analyzing large ones, however, is harder yet.

Such limitations should be borne in mind in connection with anything I write about, for example, Oracle, Microsoft, IBM, or SAP.

There are many reasons for large companies to communicate less usefully with analysts than smaller ones do. Some of the biggest are:

Different analysts, of course, have slightly different experiences. Mark Smith of Ventana wrote (emphasis mine):

… nowadays one insidious factor is having a pernicious impact on not only the timeliness of the research but its honesty as well. The dirty secret is that some of the largest technology vendors have forced industry analyst firms to contractually agree to the right to review, edit and approve any written research that references their name or products before it is published.

Technology vendors claim this is because they want to fact-check industry analysts’ work before it is published … vendors, even the best-intentioned, cannot escape the biases they bring to reviews of their products. Vendors’ heavy oversight has led to less research from industry analysts being written that offers a useful level of detail or analysis, let alone opinion. Moreover technology vendors use their influence to control access to their executives, offering interviews to those who agree to play this game and leaving out those who do not while leaving executives in the dark about the decisions about who is being scheduled.

The “edit and approve” part doesn’t exactly match what I’ve seen:

But while I wonder whether Mark is overstating the matter a little, directionally he’s spot-on.

Indeed, I’ve made similar observations in the past, most directly in 2010:

I am generally appalled by the behavior of certain companies toward analysts, and their efforts to control what analysts say. Practices include:

  • Demanding a review cycle on anything the analyst writes about them, sponsored or otherwise.
  • More generally, heavily tailoring access not just according to an analyst’s importance (by whatever measure of importance or influence makes sense to them) but also pliability.

Note: This post is substantially lengthened from the original version that went up a few hours earlier. (To make up for that, I shortened the excerpt from my own 2010 blog. :) )

Comments

5 Responses to “Analyzing big companies is hard”

  1. IBM’s ETL | DBMS 2 : DataBase Management System Services on October 7th, 2012 3:31 am

    [...] in mind the difficulties in covering big companies and their products, I had a call with IBM about its core ETL technology (Extract/Transform/Load), and have some notes [...]

  2. Vital BI on October 7th, 2012 4:56 pm

    In my almost 8 years of blogger activity I happened to be invited to SAP’s influencers events. I was never requested to deliver my texts for review.
    PS. Disclosure: since July SAP has been my employer.

  3. Curt Monash on October 7th, 2012 8:55 pm

    Companies often request advance looks at blog posts, but are pretty good about taking No for answer.

    Where things get harsher is when they say “OK, if you won’t do that, then we won’t put you in the analyst information flow.”

  4. Aditya on October 8th, 2012 7:34 pm

    “Such limitations should be borne in mind in connection with anything I write about, for example, Oracle, Microsoft, IBM, or SAP.”

    Did Oracle approve this? ;)

  5. Notes on Microsoft SQL Server | DBMS 2 : DataBase Management System Services on November 29th, 2012 5:35 am

    [...] been known to gripe that covering big companies such as Microsoft is hard. Still, Doug Leland of Microsoft’s SQL Server team checked in for phone calls in August and [...]

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