Pay to play: The vendor / analyst mating dance

Some industry analysts contribute to IT failures by creating mismatched expectations between customers and vendors. Here's how that happens.

Certain elements of the enterprise software ecosystem contribute directly to failed IT projects. For example, I have written extensively about the Devil's Triangle, which describes conflicting relationships among enterprise buyers, technology vendors, and system integrators.

Industry analysts can also contribute to failures by creating mismatched expectations between customers and vendors. This happens when analysts slant coverage toward a specific vendor in hopes of later securing a lucrative consulting contract or retainer.

I put together a diagram to illustrate:

CMS Watch founder, Tony Byrne, details the process in a blog post titled The vendor-analyst echo chamber game. Here's a quote:

[S]oftware vendors typically don't spend money with analyst firms to bribe them outright. Rather, they purchase attention through which they can try to get an analyst to define the marketplace and customer challenges according to that particular vendor's approach.

It's the vendor-analyst echo chamber game, designed to manufacture artificial demand.

Although the diagram describes a fundamental conflict of interest, many analysts have integrity beyond reproach. The best analysts play an important role in helping buyers make wise strategic decisions. Those excellent folks provide substantial value and contribute to project success by aligning expectations between technology buyers and sellers.

What do you think about this issue? Please share your thoughts.

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