There are two content models in the IT research world: the PayWall and the freely available. In the former model, the business assumption is that the firm’s revenue stream is largely driven by content subscriptions. The latter treats content as the best advertising of the firm’s real value: its people and the advice they can offer. And then there are hybrids: some of the content is out there, but not all.
James Governor of RedMonk, a pioneer of the freely available, recently wrote a piece about how Gartner is participating (or not) in the social sphere and noted:
Blogs may not have put paid to the industry analysts must not collaborate idea, but twitter has punched a big hole in the porous membrane. If analysts have to ping outside the firewall and back to collaborate with their own colleagues then so be it. And this is happening in public.”
I agree with James, of course – in fact he points to me as a fast follower of his innovative approach, which I briefly describe as “put the content out there as advertising and sell access.”
The explosive growth of social media has turbocharged this model. Any PayWall firm salesperson will tell you (even without a few beers) that access is what they sell to vendors (hoping for mentions and referrals), and to users (who need guidance.) The Inquiry model pioneered by Gartner and later Giga Information Group made access a part of the “seat” price and represented an acknowledgment of the fact that publications alone were not going to be enough forever. But the business models of the PayWall firms have not followed the trend to its logical conclusion; the devaluation of the publication piece is not acknowledged in the pricing and practices they follow. At least, that is, until recent partial cracks starting with the success of the freely available firms, and James points to the growth of “outside the PayWall” communications in social media as evidence of the change. I believe it’s happening more slowly, and I’ve said so in numerous posts like this one.
In the past year, the wide-open trickle of twitter conversation at their industry events has turned into a flood, and vendors are monitoring the tweetstream before and during events, even responding to it during the event itself. And now non-planned events are catalysts for such exchanges as well. During the recent flurry of discussion about SAP acquiring Sybase, the collaborative dialogue has been extraordinary, and many independent analysts interacted publicly in posts, tweets and commentary on one another’s published pieces. It’s a wonderful trend, and it enriched the view of anyone who followed it.
The dialogue around SAP-Sybase also included an example of the emerging hybrid between the PayWall and the freely available. (Call it the “a taste is free, kid” model.) Matt Aslett of the 451 Group published an excerpt of what appears to be an excellent piece. I say “appears” because only part of it is outside the PayWall. That’s unfortunate, but it may be the best way for firms who hope to continue to drive a substantial piece of their revenue model from publication fees to participate partially. The contrast, though, with a fully developed piece fully published, like James Kobielus’ in his Forrester blog, doesn’t flatter. Personally, I hope we see more of the latter, and less of the former. I want Matt’s stuff out where I can read it – selfish of me, of course. I’m a big fan of his work. And I’d like to see him continue to engage the other analysts out here (as he does.) I hope his firm’s model doesn’t constrain that. (And I don’t mean to pick on 451 or Matt – this is just the most recent example.)
What do you think? If you can read research by analysts without charge, are you less likely to pay their firm? If more content is freely available, will you be less likely to go to the paid stuff? Do you find that the quality of freely available stuff (other than large scale primary research with extensive models, etc. a la IDC or Dataquest reports) is adequate for your needs? Love to have your comments here.
Hi Merv,
Thanks for the kind words and constructive criticism. My personal thoughts:
Free content is a challenge for companies like The 451, but also a huge opportunity. Through our blogs http://blogs.the451group.com/ and Twitter http://twitter.com/maslett/the-451-group-analysts The 451 has, I think, been proactive about using new channels to collaborate with the wider industry. Our research and our profile has benefited. There is a balance to be achieved, however, and like others, we are learning all the time.
When it comes to an event like a major acquisition our first priority has to be towards our paying clients. But as you noted the dialogue around this topic has been fascinating and there is great value in being part of that. I used an excerpt from an existing report in this case because – to be completely honest – I didn’t have time to write something new.
The SAP-Sybase post is actually pretty atypical of our blog content in that it is an excerpt from a larger report. More often my blog posts complement our formal research with less formal discussion, or involve a topic that would not quite fit the structure of our formal reports (I am planning a follow-up post planned on SAP-Sybase that will be unique to the blog and fits the latter description).
Meanwhile I also do a lot of ‘thinking out loud’ on the blogs, which is great for engaging in conversation around a specific topic (see our series of posts on NoSQL http://blogs.the451group.com/information_management/tag/nosql/ for example). The response I got to these posts definitely improved our formal research on the subject and contributed to us signing some potential new clients.
In many ways the approach I have is similar to the commercial open source model – you get the unedited analysis for free in the blog posts but if you want the version that has been through the equivalent of a vendor’s testing and certification process, then you need to be a subscriber.
In theory a decision about when to blog and when to write a formal report is a complex and difficult one, but as an individual I think you quickly get a feel for which is the appropriate format, and as a company we are learning all the time about the appropriate balance.
Great discussion. Keep up the good work
Matt
Matt, thanks for a thoughtful contribution to the discussion of the balance between the two types of publishing we are striving to find. I continue to believe that most research publishing will be free, and that the firms will benefit from its wider visibility as much as the readers will. My experience is that clients don’t object to firms publishing research even to people who haven’t paid – as long as customers get the access they want for asking questions about deeper detail and application to their situations. That’s ultimately what they pay for.
The challenge of funding the deep research it takes to do good work is non-trivial. Primary research involves paying salaries when people are not billable, conducting large scale surveys, creating, populating and interpreting large models, and more. That’s why I believe signature “deep” documents – like IDC’s and Gartner’s extensive market share reports, Forrester’s Wave reports with their complex, transparent criteria scores, and so on – can be sold, and should be, to help defray their costs. Another class of content comes from less formal, but still structured research carried out during an analysts’ other activities; this can be supported in part with revenue the analyst generates from inquiry and consulting. It can more reasonably be treated as a cost of doing business, and leveraged as advertising for the firms’ services.
At least that’s the theory, and so far, we’ve seen some companies have success there. 451 Group, and you personally, are among those looking for (and apparently finding) an economic model that works, and of course I wish you well. As a small independent, I can no longer dedicate time to those large deep studies – I’d have to give up revenue for too long to engage in a speculative project that might not recoup the costs of the time I would spend. I’ve done that work, and now I’m doing something else. The market can certainly sustain both – at least so far.
See you on the circuit soon, I hope!
Fairly recent research in behavioral economics provides some insight. Specifically research into consumer perception of “free” and the relationship between cost, perceived value and satisfaction.
Recent findings (the past few years) seem to show that many consumers are willing to give up some satisfaction in return for low or no cost (Dan Ariely published some interesting research on the topic). That, alone, is troubling.
As the amount and perceived quality of information available for low or no cost goes up, there’s no telling what the long term impact will be on an industry that earns its living selling expertise.
Massive evaluation reports of the type sold by The Real Story Group will probably continue to do well even though they are not free. Such reports are enormous time savers and it is unlikely that technology buyers will embark on internal studies of similar breadth and depth.
Smaller “free” reports of the type typically published by most analyst firms will continue to be subsidized by income from other sources such a consulting revenue and vendor sponsorships/patronage.
I would suggest that you think about your questions from two perspectives: buy-side and sell-side research consumers.
Great comments – thank you! Check out Gideon Gartner’s blog (which I referenced in the post) for more on buy-side vs sell-side thinking.