NY Times rattles IT industry with analyst ban
Pay, no play
The Big Rub
IDC and Gartner have been more wrong than right over the years with their wild future sales predictions. And yet no one really holds the firms accountable for their mistakes.
In the case of Itanium server sales, for example, IDC has revised its forecasts more often that Madonna has changed her image, and its initial sales forecast ended up being 1,900 per cent too high. The analyst firm has never addressed its misses with the Itanium server reports and, in fact, continues to issue glowing papers on Intel's 64-bit chip - papers which spend a heck of a lot of time talking about HP (funny that).
IDC and Gartner use their size and brands to wield tremendous power over the technology industry. In fact, you'd be hard pressed to find another industry so ruled by analyst firms. The companies' sales forecasts and sales figures are treated like gospel, even though the vendors, behind closed doors, say the sales numbers are far from accurate.
According to our sources, at least two CEOs at major IT companies - one has three letters and the other has more - have considered dropping their contracts with the analyst firms but have declined to do so in the end, fearing that the analysts will punish them.
(For some, the vendor/analyst relationship is very friendly. Your reporter once penned a hard-hitting story on IBM's life sciences business that quoted an analyst from IDC. That analyst's boss complained about the story to my editor, saying the analyst had been misquoted and that my reporting was off base. She then joined IBM's life sciences business a short time later.)
The size of IDC and Gartner also lets them escape other problems faced by the likes of Enderle.
Enderle, for example, describes himself as both an analyst and a consultant. He has a "counterpoint" service that "provides consulting services during the review process of a poorly founded negative piece on a vendor or its products and, should it be needed, showcases the research errors, statistical mistakes, and unfounded conclusions that often define such a piece." He also has a "certified reference account" service which "acts as shield for a qualified reference account from unwanted exposure and attention by press and other IT managers. Enderle Group can provide the documentation, press contact and quotes about a product success while maintaining the integrity of the reference."
We're not really sure what that last service entails, but it sounds above and beyond box counting.
The best Enderle story, however, has to be a Jan. 2004 review of Acer's AMD-based Ferrari laptop. The piece starts with a bang: "Every other notebook I have ever had pales in comparison to my new Ferrari-branded notebook from Acer." It also contains other gems such as, "One impressive piece of execution is that when you fire the machine up it plays a WAV file of a Ferrari race car revving its engine. That alone is worth the relatively low $1,899 price of admission."
Put that WAV file up on eBay!
Enderle counts AMD as one of his largest clients and goes to the F1 races with the vendor every year. You can read about his exploits here. The races have left a strong impression.
Do the likes of IDC and Gartner really play the game any differently?
If Only Times Reporters Read the Times
Analysts, like non-US reporters, take flights, hotel stays and other perks from vendors all the time. The Register relies on such junkets to provide you with coverage of a broad set of events given that we don't have a budget comparable to the New York Times or Wall Street Journal. (Incidentally, we also disclose who pays the bills around here with large banner ads plastered all over the site. The majority of our largest advertisers either currently have bans in place or just recently lifted bans on cavorting with our editorial staff.) So, Enderle is not the lone racer.
Beyond that, Enderle actually tosses out quite negative statements about his clients on occasion - harder-htting statements than you'll find from most analysts at IDC and Gartner.
So why has the Times picked on Enderle and not the analyst community as a whole? Why has it not set a clear policy about quoting analysts?
To be sure, Enderle walks a finer line than the large analyst houses. He's an analyst, consultant, and writer who does not do much on the disclosure front. But analysts at the likes of IDC and Gartner often take on similar roles. Their only defense is that they're larger and one analyst's ties to a vendor don't necessarily carry over to someone else at the firm. The vendor love is spread among many.
The sad part is that there's no muscle behind the Times' analyst policy. It seems like a one-off shot at Enderle that popped up just because some reader (not me) pointed out the analyst's relationship with Microsoft - one that is clearly listed on his web site.
Every year, an article or two comes out knocking technology analysts, but nothing ever changes. And nothing will change until reporters start demanding that the analyst firms disclose their ties to vendors or the vendors start pulling their contracts with the analyst firms. Until that happens, leave Enderle alone. ®
Sponsored: Benefits from the lessons learned in HPC