Sunday 7 December 2008

Downturn hits research creating new opportunities

(By Richard Holway) I’ve long been both a recipient and admirer of Cambridge-based Library House. They offered data and news on deals – in particular VC and funding deals as well as M&A – in the TMT sectors. Last week Library House was put into administration. Although I understand that the people in the research bit had already ‘’spun out’ a few weeks ago to form their own firm. See Guardian Library House online VC tracker goes into administration. This pretty small ‘failure’ got a disproportionate amount of medea coverage because it was founded by ex-Dragons Den Doug Richards.

News from others in the research/analysis sector is not good. I’ve been told of significant redundancies last week in several of the largest research houses including Ovum and Yankee. Duncan Brown, MD of Influencer50, told me “What strikes me is the number of good people out of work. Very smart people can't get a job. At the least it's an indicator that analyst firms are not taking on contractor staff, as many usually do.”

The problem is that research and analysis is often considered ‘discretionary spend’ and is cut quickly in any downturn. Believe me, as an ageing analyst I’ve lived through a few by now! Personally I think that dispensing with research in such circumstances is like saying you don’t need to take a map when you go out for a walk in the rain.

But the kind of research and analysis you need does change. Before the last downturn tohit the IT researchers, which happened in 2000/2001, they produced voluminous printed reports full of loads of data. The downturn accelerated the change not just to internet based delivery but also to more ‘advisory’ services.

I think this downturn will see many equally profound changes:

- I think we will see more collaborative research where not only do many firms participate but also users feedback and expertise is shared. Think 'Social networking for grownup research and analysis users'.

- I think individual ‘influencers’ will play a far more important role than big research companies. Users will prefer to gain access to ‘star’ individuals rather than anonymous big organisations.

- in downturns, big research organisations go navel gazing. They worry more about headcount and overhead than good research and customer satisfaction. It’s often the most experienced (and therefore highest paid) analysts that go - thus providing opportunities for the new players.

- Although some say that the ‘blog’ has had its day, I feel that the real impact of analyst blogs is only just starting. Views expressed by the top influencers will have more impact than where you might appear in a magic quadrant.

- I think ‘niche’ expertise will be more highly valued than broad-brush generalisation.

Of course, that’s the philosophy and timing behind the establishment of TechMarketView LLP. So I rather hope I’m right!

2 comments:

Ellen Lutmin said...

It's really a challenge for the renewable energy and cleantech space when one of it's key data providers goes under. That information is critical to inform corporate and government policy. The Cleantech Group over in the states did huge layoffs last month too and cut most of their research and publication staff.

Martin Fincham said...

"some say that the ‘blog’ has had its day"

I hope this sentiment doesn't come to pass as I've only just got around to starting my own blog (http://www.mymidrangemeddle.com). Not since Napoleon thought he would dodge Xmas with the in-laws and go fight the Russians in winter has anyone's timing been so bad!

So now I'm feeling even more pressure to say profound things and beat back the naysayers.

Keep blogging.

Martin