Ovum responds to yesterday's post

I'm pleased to provide a response from Ovum to my post yesterday. Anthony Parslow, Ovum's MD and I had an interesting and fruitful discussion on the points raised in the post. Rather than edit Anthony's comments, I'm reproducing them here in full.


Duncan,

Following up on our exchanges last night on your recent post re: Datamonitor / Ovum I thought it would be helpful if I provided some additional facts and insights.

The IT industry often swirls with rumours and intrigue and I would like the opportunity to address some of the points made. While it is definitely not appropriate or possible to comment on every rumour or blog I think you will find that I and the senior management team at Ovum are quite approachable. I would encourage you or others to interact with us in order to get a more accurate or balanced story... if vendors or enterprises have to brief and touch the analyst firms then the bloggers and analyst watchers should be briefed and touch the analyst firms :-)

Moving onto the key points in the blog post yesterday...

IT Research
a) We feel we have actually potentially shown more focus on the IT side of the house than the previous management team as evidenced by the recent move to appoint David Mitchell as SVP for IT Research (which by the way was an internal promotion from within Ovum and is a role focused on IT than didn't exist previously)

b) We should have 35 people in our IT Research team at Ovum by year end not 6. We are close to that number right now though there are a few open positions at present e.g. hiring to backfill Ian whose very valid reason for leaving is that after many years of great service to Ovum he is retiring. Additionally, we have several associates who are working with us on a contractor basis and we are in discussions with Ian to keep him on as an associate as well. We have had some turn-over but have also hired well including Cornelia Wels-Maug (an ex-employee and long-time associate who rejoined the firm in Germany) and Ian Brown (who came from Gartner where he worked closely with both vendors and end users on their infrastructure technologies and related services).

c) We currently have invested almost all of Datamonitor Group's development resources in building a new client content delivery platform for 2008 for both IT and Telecoms. This is being done at the expense of almost all other development projects in Datamonitor and is a big investment in Ovum.

d) We have re-organised the analyst teams so that they will work together more closely and more collaboratively, breaking down some of the service and geography structures between them. The intention behind this is to create a more consistent and barriers-free offering for our clients which we will launch shortly... and yes to go-to-market with this in a more commercially focused way. We are not a charity and one of our value propositions has always been to help our clients from a commercial perspective so I am not ashamed to say that means we need to perhaps protect our own interests a bit more too.

e) In contradiction to what outsiders may say on blogs very few people's jobs have actually changed at all as the restructuring post-acquisition was focused on the support services and not on our analyst organisation. Acquisitions are of course difficult transitions and there is no doubt that some changes have occurred and I am probably not as cuddly as the previous management team. However, I think it is fair to say that Ovum went from being an employee owned private company to an IPO to acquisition in less than 12 months and I think many are finding it convenient to shift the difficulty for people in adapting to the implications of being a public company rather than a largely employee owned one onto Datamonitor. I do acknowledge that this is something as a management team we need to take on-board and work with our employees on and it is a large change management exercise.

f) We have also added / invested in additional sales people and added completely new business development teams in the US and EMEA.
That is not to say that we can't do a better job and we are working on ensuring Ovum is both a good place to work and a place that people are proud to work for. I suspect that is an ongoing challenge for most companies.

Ovum Acquisition

a) Ovum has been a strategic acquisition for Datamonitor and was on the potential list for a long time. We paid £42m for a business that had an annual profit for the last trading year before purchase of £0.4M and which was also a very large premium above the share price they are trading at which I think would tend to support a push for growth strategy!

b) Yes, we did feel that Ovum was not run as efficiently as it could be and have made changes to increase its profitability but the main focus of those have been on management and support services and not in the analyst area. In fact, including the team we have brought on in India, the telecoms side of the house will have more research staff by the end of this year not less.

c) We made a conscious decision not to integrate Ovum into Datamonitor for a long series of reasons which were actually carefully explained to the company during the 3 internal global monthly briefing calls (we host EMEA, US and AP calls each month to keep our teams up-to-date on what is happening). One of the prime drivers was to protect the brand values, approach and advisory nature of Ovum rather than risk damaging that by integrating into other brands. Butler, Datamonitor Technology and Ovum are focused on different audiences and different segments of the market and, after looking at this in depth, there would not be much advantage in merging them but there would be significant risk of "blanding" them all together.

d) The Informa acquisition was not even on Datamonitor radar at the time we approached Ovum in late summer of 2006. The Informa offer came in early Q2 of 2007 and was based on them seeing DM as an attractive and complementary business. If you look at the share price of Datamonitor between those two periods you will see a significant upturn which is a) due to the swift execution and confidence by the market in the acquisition of Ovum and expectation that we would drive growth there but b) is also very much due to strong performance by the core Datamonitor business. However, the share price had risen rapidly in the previous year as well and was part of an ongoing approach to drive growth, profits and our share price. This is further supported by the recent Informa investor meeting where they talked about Datamonitor outperforming expectations in the 1H of 2007.

f) Datamonitor was not on the market or actively being touted for sale but the offer price and the fit between the two businesses (DM and Informa) meant that the bid was supported. The offer to close period was quite interesting with speculative outside investors driving the price above the Informa offer price before accepting the bid. We would have been perfectly happy to continue operating independently if the deal had not gone through and had previously turned down several approaches. Ovum wasn't part of an exit strategy or a stock pumping exercise.

Thanks for being approachable and open towards some additional input.

Anthony Parslow
General Manager, Datamonitor Group
Managing Director, Ovum

Trouble at IDC too

Further to recording the troubles at Ovum, it turns out that my other former analyst employer is also having issues. IDC is focus primarily on hitting its profit targets, and having failed has made 5 people redundant. The significance of this is that redunancies included sales staff which, in a sales orientated organisation, indicates a sharp drop in revenues.


IDC is desparately trying to move up the thought leader stack and change its image as a "data-monkey numbers factory" (and I'm not the originator of this phrase). It has two challenges. The first is its poor depth of good analysts in Europe. Some are excellent, but most lack insight and strong opinions.


Secondly, it continues to struggle to penetrate the end-user market. Its Insights business units were loss-making to June last year (when I left IDC) and I doubt whether they've made a substantial turnaround now. Financial Insights longs to advise banks on IT strategy, but more usually advises vendors on how to pentrate the banking sector - traditional supply-side IDC fodder. There are claims that IDC is increasing in influence but influence on whom? Not end-user decision makers. As always, the key question is, who are you trying to influence?


This is at the time when IDC management seem to be on a charm offensive, inviting AR professionals (Duncan Chapple at least) to its flagship IT Forum, and lately addressing the IIAR. I wonder if anyone asked them about projected profitability...

Trouble at t’ Ovum mill

Last week I celebrated (?) the departure from Ovum of two of its diehards, Ian Wesley and Gary Barnett. Ian recruited me to Ovum in 1995 and was hugely influential in my learning the analyst ropes. Gary joined a couple of months after me and quickly established himself as a bright, opinionated and insightful chap. His insights were usually correct, unlike mine ;-)

What was interesting, during the opportunity to catch up on gossip, was the apparent demise of Ovum, especially its software/IT services (SITS) analysis capability. In essence, it’s evaporating quickly. I’m told that Ovum only has 6 SITS analysts left, from a core team of 17 prior to the acquisition by Datamonitor.

There are two reasons for the demise. Firstly, the obvious clash of cultures has been too much for some Ovumites. Ovum was a nice place to work, with nice people in a nice environment. (Perhaps it was too nice, from a commercial viewpoint, but that’s another story.) Datamonitor has a much more aggressive commercial strategy and, I’m told, a less-than-cuddly approach to staff welfare.

The second reason is that Ovum was acquired largely to beef up Datamonitor in anticipation of its own acquisition by Informa. DM needed to increase its book revenues to reach the share price at which it wanted to sell. It also needs to hit the profit targets on which the sale was agreed. DM is therefore reluctant to invest in anything that impacts profitability. This includes merging the analysis capabilities of DM, Ovum, Butler and ComputerWire, which would make more long term sense, but impact short term profits.

The long term future for Ovum is uncertain, and the short term levels of service look set to be affected. There was once a time when Ovum analysts were proud to work at the firm (despite the silly name). This ethos is disappearing fast. Which is a pity.

[Updates: Firstly, I need to make it clear that, although I met Ian and Gary last week, my comments are my own syntheses from various discussions and not necessarily those of Ian or Gary or any other individual employee. Secondly, Anthony Parslow has provided a response to my comments which I've posted here.]

The Dip on influence

With Seth’s permission I’m reproducing a page of his most recent book, The Dip. I read it the day after I posted on the most important question. Spooky, but true…

Who am I trying to influence?

Are you trying to succeed in a market?

If you’re considering quitting, it’s almost certainly because you’re not being successful at your current attempts at influence. If you have called on a prospect a dozen times without success, you’re frustrated and giving up. If you’ve a boss who just won’t let up, you’re considering quitting your job. And if you’re a marketer with a product that doesn’t seem to be catching on, you’re wondering if you should abandon this product and try another.

If you’re trying to influence just one person, persistence has its limits. It’s easy to cross the line between demonstrating your commitment and being a pest. If you haven’t influenced him yet, it may very well be time to quit.

One person or organization will behave differently than a market of people will. One person has a particular agenda and a single worldview. One person will make up his mind and if you’re going to succeed, you’ll have to change it. And changing someone’s mind is difficult, if not impossible.

If you’re trying to influence a market, though, the rules are different. Sure, some of the people in a market have considered you (and even rejected you). But most of the people in the market have never heard of you. The market doesn’t have just one mind. Different people in the market are seeking different things.

Influencing one person is like scaling a wall. If you get over the wall the first few tries, you’re in. if you don’t often you’ll find that the wall gets higher with each attempt.

Influencing a market, on the other hand, is more of a hill than a wall. You can make progress, one step at a time, and as you get higher, it actually gets easier. People in the market talk to each other. They are influenced by each other. So every step of progress you make actually gets amplified.



Seth has also agreed to us using the above text as a pseudo-foreword for the book, which is due out late November. It’s just a tad galling that Seth writes in one page what we take 230 pages to say – gnash! At least we have case studies...

Needless to say, you should read The Dip in its entirety.

The most important question about influence

It’s not about who has the influence.

The question is, influence on whom?

Most studies of influencers are lists of important or high profile people. Fair enough, except there is no discussion on the scope of their influence. What decisions are impacted by their influence? How can you tap into their influence? Are these influencers influencing my customers?

Here’s another example of a nicely researched and presented example, this time looking at the top 50 influential bloggers (allegedly). Have a look through, then count how many bloggers on list do you think are influencing your target market today. My prediction is, not many.

If you start Influencer Marketing by looking for people you think are influential you end up missing the point. It’s not for you to decide.

Instead, put yourself in the shoes of your customer. Who are they listening to? What do they read? Who are they following? My expereince is that you can only do this by asking them.

Otherwise, you’re just guessing, and probably guessing wrongly.

Hugh on marketing

I'm on a roll - third post today and it isn't even noon!

Hugh synopsises The trick to marketing.

More on Net Promoter adoption

Interesting post on NPS here.

At Influencer50 we've rolled out our NIPS service - NIPS = Net Influencer Promoter Score. It's based on the premise that influencer promoter scores should predict a customer-orientated NPS.

NIPS is a combination of NPS and the Delphi method to consensus-based forcasting. Basically, it's ascientific approach to prove what all good consultants know - that if you talk to enough knowledgeable people eventually you become knowledgeable yourself (and can then sell that expertise).

The trick is knowing which people are the ones to talk to...

Influencer marketing in a nutshell

Try this.

It's what influencer marketing is all about.

Forrester reports on “Hidden Influencers”

I’ve just received a copy of Forrester’s new report on influencers. Written by Michael Speyer, it’s called Identifying IT Buyers’ Hidden Influencers. The report is available here (free for Forrester clients; available for purchase by non-clients).

You should read this report, if you’re at all interested in influencers. While you track down your Forrester password or fumble for your credit card, let me give a quick overview of the report’s findings:

• The key recommendation is that Influencer Management begins with knowing who the influencers are. No news here except that, as the report title suggest, many influencers are hidden. Most firms just examine their sales channels, and tack on press and analysts.
• According to the report, SIs and VARs have the biggest impact on sales. Again, this may seem obvious, but I’ve had a battle in the past with (a few) folks that position analysts as the most important influencers. Not so, according Forrester, the analyst firm. In fact, Speyer states that “While they (analysts) are easily identified and reached, the impact of their advice and perceived value is highly variable.”
• Ranking of influencers is critical. The report says that ranking “will allow vendors to understand the value of any given influencer to a buyer, which can be used to prioritize influencer management spending.” I agree. Speyer proposes several dimensions for ranking purposes, which is pretty close to Influencer50’s.

There are other important points in the report, which is in all an excellent summary of the subject.

The only slight beef I have is that the report refers to influencers in the context of SMBs. I assume that this is because Speyer usually researches the SMB market. But the report conclusions are equally applicable to enterprise-level buyers too. Indeed much of the research input and explanatory text refer to both enterprise and SMB buyers. I hope this point isn't lost on the readership.

Disclaimer: I was interviewed by Michael for the report and Influencer50 is listed as a source, along with Cisco Systems/Linksys, Citrix Systems, EMC, IBM, Microsoft and Symantec.