Gawker: valleywag, jupiterresearch

How the analyst racket works

Paul Boutin — Thu, 31 Jul 2008 20:00:00 EDT

Technology beat reporters have a problem: They're required to quote experts, rather than making their own assessments of who's what is why. Armchair advice on business intelligence software flows like water out here, but readers want someone with implied credibility. Enter the analyst. Companies like Forrester or Jupiter — which Forrester just bought — create hefty reports punctuated by easy-to-grasp "magic quadrants." The one shown here ranks 14 companies by their "completeness of vision" and their "ability to execute" on business intelligence software. Since no one reads the full reports, it's important to upstart companies to get analysts to mention them to the press and add them to their magic quadrants. Gee, if only you could buy your way in. Good news: You can!

To be clear, I can't speak for anyone on the Gartner chart above. But I can offhand think of a half-dozen tech companies whose founders spent anywhere from $15,000 to $100,000 per year to keep an analyst "on retainer." In theory, they're paying for the analyst's firsthand counsel. In practice, they're paying the analyst to talk about them to the press and put them into reports. More than a "widespread practice," it's a standard business expense factored into the budget, just like the employees' health plan.

This is the food chain of what passes for fact in the Valley: The company pays the analyst, the high-paid analyst talks up the company, the low-paid journalist runs the analysts' quotes as instantly obtained "reporting." If I wasn't so bad at following instructions, I'd be cruising for an analyst gig right now.

Don't believe me? Try getting Jupiter or Forrester to give you even a partial client list.

(Magic quadrant of business-intelligence vendors by Gartner Research)

Forrester bests Jupiter at making money, making mistakes

Paul Boutin — Thu, 31 Jul 2008 17:00:00 EDT

My esteemed colleague Owen Thomas worries that analyst firm Forrester Research, by buying its longtime rival JupiterResearch, has reduced the number of alternative opinions that will be floated in the media on any given topic. But by bringing Jupiter analysts including blogger favorite Michael Gartenberg aboard, Forrester will actually lessen the number of wrong opinions treated as near-fact by the mainstream media. I could spend a couple of days correlating Forrester vs. Jupiter on a spread of topics over the past decade. But screw it, I'm a journalist — two's a trend. Here are Forrester's two biggest misses I never forgot:

1998: Businesses will maintain separate networks for voice, video and data.

''What we try to do is demystify hype,'' Forrester's Maribel Lopez told the New York Times. ''The buzz, a lot of it has to do with data guys looking to sell the next router upgrade.''
Jupiter's Abhi Chaki disagreed, correctly calling the convergence of phone and video networks onto the Internet "an inescapable reality."

2008: Businesses will not support the iPhone for a long time.

"The features that make it a consumer success don’t necessarily translate to the enterprise," wrote Forrester analysts Benjamin Gray and Robert Whiteley. "IT can’t be expected to support each and every operating system their employees have brought into the company."
Jupiter's Gartenberg spotted the Achille's heel in Forrester's argument: If the CEO, rather than the IT guy, brings one to work, "it becomes a de facto enterprise business tool."

(Photo by Michael Neel)

Forrester acquires Jupiter, creating monopoly in Internet quote-factory market

Owen Thomas — Thu, 31 Jul 2008 12:20:00 EDT

Analyst firms exist for two reasons: First, to dispense words posing as wisdom, for free, to journalists, as a publicity scheme to get their name out. Second, to dispense words posing as wisdom, for large sums of money, to corporations, who have read their quotes in the press. Forrester Research is acquiring JupiterResearch, which will have the salubrious effect of reducing the wear and tear on reporters' phone keypads. And instead of two wrong predictions? Only one. We hope the antitrust authorities do not block this deal.