Skip to content

Posts tagged ‘Forrester’

There’s still plenty of upside for the analyst business in Asia/Pacific…

At first glance, the technology analyst business in Asia/Pacific looks pretty mature – the first global firms established their beachheads in the late 1970s, there are many analysts now who can measure their tenure in decades rather than years, and there has been an ongoing process of consolidation which is typical of maturing industries.

But when you look more closely, it seems that the analyst business in this part of the world is still under-penetrated. And by a fair degree….

The Asia/Pacific region is all about growth – everybody knows that. Not just for technology, but for everything – consumer goods, manufacturing, professional and personal services, airlines, you name it… Due to their sheer population size and rate of growth, China and India attract most of the attention, but there are plenty of smaller economies in Asia which are belting along while the US and Europe try to figure out whether they can pay their bills.

All this growth creates an appetite for technology, which is why so many global vendors have a strong focus on APJ. Many of them get their best growth figures from this region, quarter after quarter, and they don’t see that changing – Symantec’s regional senior VP, Bernard Kwok, was quoted today as saying that the company would double its business in the next five years.

Some big vendors aren’t even really here yet! Analysts tweeting out of Dreamforce today quoted Salesforce.com CEO Marc Benioff as saying that the company hadn’t entered China yet (although its website lists offices in Shanghai and Beijing). However you look at it, though, that vendor has hardly scratched the surface in APJ.

And then there are the local vendors…. Software and services suppliers from India, communications equipment vendors from China, the established hardware manufacturers from Japan and South Korea, and lots of start-ups right across the region developing applications, tools and solutions for their local markets.

Every analyst firm I talk to in this part of the world says business is good – they’re sharing in this growth, but not at the same levels as their clients. And when you break down the numbers around the analyst business in APJ, you get the feeling that there’s still plenty of upside, and those firms that ratchet up their level of investment are going to reap the benefits.

So let’s look at the numbers.

I’ve consolidated these from analyst firm websites and my own databases, and I regard them as good estimates, but they may not be 100% accurate. Indeed, the total analyst workforce numbers quoted on the firm websites appear to be “rounded” and may in fact understate the case, and some of them use vague terminology so it’s difficult to make exact comparisons.

IDC

There’s no doubt that IDC is the biggest technology analyst firm in APJ. It employs approximately 230 analysts who are located in 14 countries, accounting for something like 23 per cent of the “more than 1,000 analysts” that its website says it employs worldwide. Interestingly, IDC employs the same number of analysts in China – 45 – as it does in its Singapore regional headquarters, with Japan the next largest office, followed by Malaysia, then India.

 Gartner

Gartner established its first Asia/Pacific office in Australia in the late 1970s, just after IDC, and expanded progressively across the region. It added significant headcount with the acquisition of Dataquest in 1995, and the majority of its analyst hires more recently have been in China and India. Gartner employs approximately 120 analysts in APJ – out of a global total of 800, or 15 per cent – in offices in 10 countries. Japan is its largest office by analyst numbers, followed by Australia and India, with China still relatively small.

Forrester

Until its acquisition of Singapore-based Springboard Research in May last year, Forrester had very little presence in APJ – a couple of analysts in Australia, and one in Japan. There are now about 40 analysts & researchers employed by the firm in APJ, the majority of them in India, although it also has reasonable presence in Singapore, Australia and China. But this figure is just 9 per cent of its worldwide headcount of 450 “research professionals.”

 Ovum

Ovum employs the largest percentage of its analysts in APJ – just over one-quarter – but as a European firm, it doesn’t have a large number of analysts in North America. Its website says it employs 140 analysts and consultants worldwide, and about 36 are in APJ – primarily in India and Australia.

Frost & Sullivan

Frost’s website says it employs 1,800 analysts and consultants worldwide, but getting any insight on how many of those actually focus on technology – as opposed to the other industries Frost also researches – is pretty hard. In APJ, Frost’s technology focus is primarily on telecommunications, contact centre and some other specific segments such as information security, but the regional organisational structure is a little complex, and in some countries, analysts don’t specialise in a single industry or topic. I’d estimate about 70 fulltime technology analysts in APJ, but the number could be higher.

Apart from those five global firms, there are probably another 30 or so firms with some sort of analyst presence in APJ. As well as US and European firms which employ a handful of analysts in the region, this group includes advisory firms in Australia such as IBRS and Longhaus; Japanese “numbers houses” such as Yano and MIC; and the intriguing Chinese players such as CCID and Analysys International.

According to my friends at KCG, there are about 350 “real” analyst firms worldwide, which means that just 10 per cent of them have some sort of analyst presence in APJ. Granted, many of those firms are quite small, but that doesn’t mean they couldn’t or shouldn’t be investing in the real growth opportunities that exist in this region.

There are plenty of gaps in the research portfolios of the larger firms too. For example, deep focus on technology in specific industries is limited, and very little attention is paid to non-traditional purchasers of technology. There are huge provincial markets in China for which there is very little good market intelligence, while coverage of emerging markets such as Vietnam has barely scratched the surface.

APJ is one of the major growth engines of the global economy for the foreseeable future, so you would think the analyst firms would be throwing resources at this region to cash in. That doesn’t seem to be the case, but maybe that will change – after all, it’s all upside.

Cheers,

Dave

The metamorphosis of Springboard – a chat with Dane Anderson of Forrester

It’s been a little over 12 months since Forrester Research acquired Springboard, the last – only? – independent pan-region Asia/Pacific analyst firm, and it’s been fascinating to watch the metamorphosis. Any company integration is fraught with pitfalls, but it seems that both sides have invested the time and effort necessary to make this one work.

What differentiated Springboard in the past was its almost total focus on APJ, easy engagement with its analysts, and a complete absence of corporate BS. Nothing much has changed on the first two points, and the latter is within tolerable limits. Forrester had limited presence in APJ previously, so building their footprint in this region has obviously been important to their credibility, not only in the high growth markets in this part of the world, but globally.

Last week, I had the opportunity to catch up and talk in detail about the transition with Springboard co-founder and now Forrester VP and AP region manager, Dane Anderson. Dane spent more than an hour speaking with regional AR pros at our regular Institute of Industry Analyst Relations APJ Forum in Sydney (my report of that meeting on the IIAR blog), then agreed to subject himself to my first ever video interview. We then adjourned to the pub to catch up with AR pros and various local analysts – but those conversations remain largely off the record 🙂

So this week, rather than write at length about my impressions, I’m going to let Dane do the talking. Brevity is key with video, so it was impossible to include all of the interesting vignettes, but hopefully this will give you some interesting insights into where Forrester is at – and where its going – in APJ.

Disclaimer: I’ve known Dane since the mid-90s, when he was catapulted into Asia as one of several young analysts tasked with building the first IDC quarterly trackers. I’ve always respected him as an analyst and admired his gumption in building Springboard with his sales sidekick, Chris Perrine. We’ve interacted many times over the years on both a professional and non-professional basis (the latter episodes usually involving quantities of beer) and have engaged in some spirited discussions about the realities of the analyst business. It’s fair to say that we haven’t always agreed, but we always respect each other’s opinions.

But enough of me. Here’s what Dane has to say:

I’d be interested in feedback not only on the content, but the format of this post. My goal is to make this blog as interesting and relevant as possible, so if video works for you, I’ll do more of it!! And hopefully the production values will improve too 🙂

cheers,

Dave

Did the earth move for you? No, but the landscape changed…

Like the technology market it supports, the industry analyst business is in a constant state of movement. There is always a new technology to observe & analyse, a new geographic market emerging, a new way of delivering research, new analysts deciding they can do a better job than the incumbents – this in itself is nothing new.

But when you live in a relatively niche market like analyst relations every working day – as I do – you sometimes focus more on the tactical, day-to-day shifts and spend less time thinking about the big picture, and the change that’s taking place over time.

This point came home to me this week when I was co-hosting an Institute of Industry Analyst Relations webinar with my mate and occasional business partner Bill Hopkins, the founder & CEO of KCG. While we sometimes disagree on the detail, Bill & I share a similar “world view” of the analyst & AR businesses. We’ve both worked in AR for well over a decade, we’ve both worked as analysts – though at different firms – and we’ve both spent a long time working in the technology business.

The topic of the webinar was KCG’s Global Analyst Landscape update, with me providing the Asia/Pacific & Japan perspective. There are many differences in the way the analyst landscape looks at a global level and the way it looks in APJ, with some firms actually using different business models in different parts of the world. But there are similarities too.

Some things don’t change

At the global level, it’s interesting to see that the breakdown between sell-side (vendor) revenue and buy-side (end-user) revenue has remained reasonably constant over the past five years at about two-thirds/one-third. But the growth in buy-side revenue last year was about twice that of sell-side revenue.

The other constant was the share of total revenue enjoyed by the Big 3 – Gartner, IDC & Forrester – remains at 56 per cent, about the same as it was five years ago.

Outside of the top players, there are probably another 350 firms slicing up less than half the market between them. Some of those firms are relatively sizable, most are quite small. Some of them cover a range of technology markets, the majority are quite focused. Some of them have a presence in multiple countries, the majority are confined to the US or one or two European countries.

One of the most visible trends over the past few years has been the gradual thinning of the middle layer. Small firms come and go – particularly when analysts leave the big firms, voluntarily or otherwise. But the number of midsize firms has continued to shrink, as the larger firms have acquired competitors before they’ve gained sufficient scale to seriously challenge them.

Asia/Pacific – same/same but different

While it’s impossible to get accurate regional revenue breakdowns, anecdotal evidence would suggest a similar pattern in APJ. Certainly Gartner & IDC are the dominant players in APJ, Forrester less so despite its acquisition of Springboard Research last year.

Certainly there has been a significant growth in buy-side revenues as Gartner has expanded its sales teams in growth markets such as India and China, as IDC has grown its Insights business, and as other firms have capitalised on the increasing appetite for technology advisory in both mature and emerging economies.

And the thinning of the middle layer has been evident in APJ too. Certainly some of the midsize players have a solid presence – Ovum, Frost & Sullivan, AMI Partners have multiple offices, for example – but others have scaled back their APJ activities in recent years.

Gartner’s recent acquisition of Ideas International (still to be finalised) removes the only regional firm which arguably was a global player, with reasonable analyst teams in Australia, the US and the UK. Forrester’s acquisition of Springboard in May last year removed the only organically-grown pan-regional firm.

Nearly all the other firms which have a notable presence on the APJ analyst landscape are primarily focused on their domestic markets. There are firms such as IBRS, Longhaus & Telsyte in Australia; CCID, CCW & Analysys International in China; ITR & Nork Research in Japan; and CyberMedia Research in India, which for 23 years was the IDC licensee on the sub-continent. Yes, some of these firms may stray into regional markets, but the bulk of their research and revenue is driven from their home markets.

I noted in one of my first posts that while technology might be global, influence and insight are local. For that reason, we can expect that many of these local firms will survive and even thrive. Will any of them expand sufficiently to become pan-regional or even global players? That remains to be seen.

What is clear, though, is that AR remains multi-layered. Any AR program that wants to have impact has to engage at a global, regional and country level. That isn’t always easy, but that’s the way you support sales teams and influence purchasing decisions.

Cheers,

Dave