“Democratization” might be defined as a combination of trending phenomena such as the spread of expertise among larger numbers of people; the virtual disappearance of barriers to publishing; the supersonic speed of modern communications; the increasing obsolescence of fixed, static business operations; the blurring of lines between IT and other business processes, and other factors. Taken together, these developments constitute the root cause behind virtually every shift in the industry analyst paradigm. All other trends affecting the generation, delivery and consumption of IT research can be traced to democratization.

To look at just one example: the large advisory firms used to be the only game in town – literally the one and only resource for large companies in need of IT decision support.  But in the digital age, barriers to entry have collapsed, leading to an explosion of low-cost advisory resources.  Most recently, the blogosphere and social media have enabled the superstar branding of many an independent analyst, including numerous expatriates from the major analyst firms. Furthermore, as seen in the examples of thriving online communities such as Spiceworks, the average IT professional is being empowered by greater knowledge and access to peer expertise.

These developments present many opportunities for the IT research consumer – but also challenges, as the landscape becomes a labyrinth of sometimes confusing options.

An open model essentially means making the work of a team or organization available to as many people as possible in the interest of improving the work and increasing its value to the highest number of people. In the research world, open models come in different forms. 

A company, for example, may choose to make most of its basic content – traditionally kept behind a paywall – available for free. Smaller firms in particular are providing their more prolific types of written content – daily research notes, for example – for free to attract readership/eyeballs/attention. Extra-subscriptive products or services (analyst access, events, project consulting, etc.) are then built on top of that free content to generate revenue.

Then there are firms that open the research itself to contributions from those outside the analyst ranks. They might, for example, allow a vendor to make technical clarifications, hint at strategic plans or rebut particular conclusions. They may open it up to input from other users who have worked with the technology in question or have other experiential content to add.  They may encourage multiple viewpoints from their own analysts as opposed to presenting a monolithic report by a single author.  All such approaches help to make what was once static, one-way content more open and contextualized.

What is driving the open research trend? For many, there has been little choice. Content everywhere has become thoroughly commoditized and in many cases heavily devalued.  Analyst firms are under tremendous pressure to drive revenue despite the collapse of traditional content margins and have been forced to innovate to attract users.

There's been so much M&A activity in the analyst space over the last decade or two that what was once a thriving middle tier of providers has essentially disappeared.  CEB, Burton Group, AMR, Giga, Meta, Tower Group, Butler, RHK and others were all sizeable companies, if a significant step below the real gorillas in the industry, and all have been removed from the marketplace. Left at the top are a handful of huge firms, topped by Gartner at $1.5 billion, and below that a gargantuan drop down to firms that struggle to top $25M. This latter class of analyst firms tends to cater to very specific constituencies and focus on very specific areas of coverage.  There are many dozens of such firms, and most enterprise advisory portfolios now include at least several of them. 

Demand is increasing for real-world perspectives that traditional analysts haven't always been able to provide, and with quicker turnaround as well.  Technology platforms and social media have made it easier and cheaper for executives and practitioners alike to join networks that deliver expert consultations, or communities that foster the exchange of peer-to-peer expertise. While none of these are true substitutes for the in-depth research that top analysts at quality advisory firms can deliver, their popularity is on the rise and they are certainly having an impact on the IT research landscape: Their informal, ad hoc, and low-cost decision support can sometimes amount to an end run around traditional analysts.  

Furthermore, subcription research of the type produced by the typical analyst firm is a one-to-many product, which is almost by definition static and uncustomizable. Because today’s technology is so complex and malleable, more knowledgeable and tech-savvy clients prefer direct interaction to customize a response to their individual situations. Through these thriving communities, they now have the ability to contact independent practitioners and peers who are working with the same challenges and technologies every day as part of their jobs.

As alluded to in the above discussion of networks and communities, a key driver behind many developments in the IT research world is the market’s hunger for more and more customization. Part of this is simply the inevitable result of 21st century technology change and innovation.  Thirty-five years ago when IBM was the dominant player in a simpler computer age, there was relatively little variability in the IT decision-support challenges facing large enterprises.  Today there are so many different vendors, products, and platforms, tailored to so many different kinds of companies and serving so many different objectives, that the modern enterprise is more desperate than ever for advice suited to its specific environment.  Mere content, however high-quality, is no longer king; custom consultation now rules.

This demand for custom work presents a huge quandary for analyst firms.  Practically the entire industry is built on a subscription model of continuous, distributed content which generates high margins and massive scale.  But the commoditization of content and the market’s appetite for personalization has made it increasingly difficult for advisory companies to differentiate their product and to support traditional content prices.  The natural result is for direct, consultative engagements by analysts to increase, but analysts are a fixed cost-intensive resource and cannot scale.  It will be fascinating to see how the various segments of the analyst industry respond to this conundrum.

Traditionally, end-user clients of analyst firms were large enterprises that had the budgets to spend $25,000 or more just for continuous research. They were willing to pay six and sometimes seven figures for broad coverage and access to all the analysts.  The target market for analyst firms has never included small to medium-size businesses, let alone startups or even individuals. That has changed.

The realization that there's an enormous secondary market out there – partly driven by trends such as democratization and the new IT communities – is growing, and some firms are trying to be creative in figuring out ways to tap into it. Canadian research firm Info-Tech has grown dramatically since its inception by making a strategic choice to address small to medium-size businesses (those with annual revenues in the range of $50 million to $500 million, as compared to the $1 billion-plus revenue firms that most analyst firms traditionally targeted).

Think of this as the “moneyball” tactic in baseball – identifying a market inefficiency and exploiting it before others do. Other firms are now trying to see what they can do to tap into this new market.  It is inevitable that in the near future, even the larger analyst firms will have alternate offerings geared to smaller clients.