Wednesday, May 14, 2008

Analysts and the Vendors They Cover

I received the following invitation the other day:

The Data Management Challenge of Quantitative Analysis

Vhayu invites you to join industry leaders in market data and analytics for a one-hour webcast hosted by Aite Group.

Speakers include:
Sang Lee, Co-founder & Managing Partner / Aite Group

Jeff Hudson, CEO / Vhayu Technologies
David Wilson, Product Manager / Vhayu Technologies

Vhayu has come up with something that they think is an interesting product. Congrats to Jeff, Ross, and the rest of the gang at Vhayu.

However, what is interesting is the fact that they have enlisted Aite group (one of the founders, no less) to host a publicity event.

We look to companies like Gartner, Tabb, and Aite to give us a fairly objective, unbiased look at the technology landscape in the financial sector. However, the presence of an "impartial" analyst and a vendor always gives me an uneasy feeling.

In the dot com era, there was a company/website called Gomez. This company rated the daily effectiveness of online brokers. In fact, CNBC featured The Gomez Report every morning during the go-go years of the late 90's and early 2000's. However, Gomez had banner ads on their website from the brokers who they were supposedly rating.

My opinion is that, if you are going to position yourself as an analyst, you need to give an air of impartiality, and you need to give full disclosure. What is the relationship between Vhayu and Aite? Is Aite receiving any compensation for hosting a webcast that is being created and sponsored by Vhayu? Will Sang Lee agree to host a similar webcast for Vhayu's competitors? Will Sang Lee mention any of Vhayu's competitors during his opening remarks?

For me, there is a bit of a cloud that hangs over any analyst that chooses to associate himself with a particular company.

I like what the Gartner Group does. When I speak at their conference in September, they will not let me speak about, nor will they allow questions about specific vendors. There are no explicit or implicit vendor endorsements allowed when I am on the podium. If a vendor wants to exhibit at a Gartner conference, then they are confined to the vendor area. And, there is no question that Gartner is getting compensated by the vendors for this.

©2008 Marc Adler - All Rights Reserved


Anonymous said...

What's a publicity event? You mean like this one Coral8 hosted which you participated in along with Aite?

Pot, meet Kettle. Kettle meet Pot.

marc said...

Ah, but you forget that I do not get paid to be impartial. In fact, I get paid to have rather strong opinions about products.

Mr. Pot