Veni Vidi Vanco and the November Telecoms Index

It has been a great month for Vanco. Since publishing some very respectable half-year results late in September, Vanco has entered Gartner’s Magic Quadrant for Pan-European NSPs. Its “asset light” VNO model is beginning to show some fabulous returns, according to its CEO and founder Allen Timpany. Of course, this is not the only reason Vanco rose a staggering 15 spots in our Telecoms Index. Furthermore, Vanco only just missed a placing in the top forty.

Another big winner this month was Deutsche Telekom which managed to replace a five spot fall last month with an eight spot gain this month. They are presently 26 in the rankings. Cable & Wireless was also up, as was Jazztell. Telefónica also entered the top 25 this month.

Brasil Telecom has slid ten spots finishing in 51st position, which is still creditable. Mobilkom tumbled seven places down the rankings which is slightly worse than last month's poor performance. It is now 57th in the rankings. Ciena has fallen by seven spots too while Qwest has dropped out of the top 25 altogether.

If you'd like to be sent the top 25 of the Lighthouse Software Index each month, please send an email to analysts [at] lighthousear.com.

AR institute makes progress on training

The IIAR's training working group met again this week, and made some real progress.

Much to my surprise, I was able to set that progress back within hours.

One of the proposals that came out of the meeting was that we should use a wiki to see if we produce an common list of the topics and themes for AR training events. I was positive about the idea, because I feel it's important that we get the widest possible input from AR people about they they found useful to learn -- and what they were not told -- in their own professional development.

My error was to set this up as a public wiki, which is now offline. My colleagues on the working party felt that a public wiki opened that list up to contributions from non-members and potentially raised issues of confidentiality. I just hadn't considered that; I'd been looking at it as an open source sort of project.

Our next meeting is on January 17. If you have any topics or comments you'd like to feed into the working group, then contact us.

Preparing for Thanksgiving

This week the United States has its harvest festival. Thanksgiving opens a season of holiday eating, and Carter has been testing some recipes. For those of us who are too cautious to risk an unknown recipe, this is a good way to try something new.

Even analyst relations directors must eat, but Carter's Food Notebook website shares with its readers a wealth of resources. Former analysts will be especially interested to see Carter's taxonomy for the scoring of podcasts, which cries out for more interactivity. Perhaps this is the birth of Food "2.0"?

Entrust rises 10 spots in this month's Software Index

The top ten companies in the Software Index invariably include BEA, CA, Google, Microsoft, Novell, Oracle, SAP, Siebel and Symantec. This month is no exception. Tenth position, however, is occupied by a newcomer. For some fun, send us a postcard telling us who you think holds tenth position. The winner gets a post card back from London!

Entrust has had a storming month, vaulting ten places up the rankings and straight into the top 30. Its third-quarter results posted higher revenues than last year, but less profit. This is partly due to a series of one-off costs, integrating two recent acquisitions and finally completing a revenue-generating OEM relationship with Vericept. Furthermore, last week, Entrust lodged a lawsuit against Corel for copyright infringement. Small wonder the analyst community has been focusing its spotlight on Entrust.

Tibco has also had a terrific month launching its Collaborative Information Manager and jumping up eight places. It has also entered the top 25. This week it was "Honored With a Prestigious Platinum Award" from Bloor Research; we will wait to see the impact of that. Other climbers include Interwoven, Sungard and Intermec.

Interestingly, the analyst focus appears to have shifted away from SSA which has fallen eight places out of the top 25. Genesys has also had a bad month falling nine spots and finishing 39th in the rankings. This month, Veritas finally dropped out of the top 25 for the first time in a very long time. Not only does this demonstrate how powerful the Veritas brand has been over the years but also how slow the analyst community is in reacting to the Symantec ownership of the firm.

If you'd like to be sent the top 25 of the Lighthouse Software Index each month, please send an email to analysts [at] lighthousear.com.

Giving a transatlantic accent to your analyst relations

Alan Cumming, a Scottish actor living in the United States, recently explained that he found adopting an American accent is a great aid when speaking with Americans. I can appreciate this; British accents can be difficult to appreciate or indistinct when heard. Few Americans react badly to a foreigner with an American accent, since they will simply identify the person as either a foreigner or someone from a remote corner of their own land.

Certainly, it's a strategy that could lead to occasional bad outcomes, especially since one would still be using British idioms without the 'danger of misunderstanding' warning that foreign accents provide. On balance, the benefits greatly outweight the dangers.

However, could one extend the same strategy to analyst relations? This one of the topics that my colleague Jerry James discussed in a conference call for Lighthouse's friends and clients yesterday.

Those US-headquartered companies that are doing a good job of influencing local, regional analysts outside of the US are going so with local, regional spokespeople. Of course, some analysts outside the US are global analysts. Since most exec operations and R&D of US companies takes place within the US, those analysts tend to connect with the global headquarters of the firms. Very often it is only the US-based CEO or VP of Product Marketing or Product Management who feel really empowered to speak about the future plans for a company.

However, both global analysts and analysts working at a regional level want to speak with people who can answer all the key questions -- and those include understanding the ability of that company to support and extend its base in that region. That means that even if the US CEO on on a European or Asian tour, a regional or country Director (who often has responsibility for local sales) or even a local pre-sales specialist is often added to the briefing team to give more insight into local realities.

Regional sales and pre-sales teams can have a lot of value to local, country analysts and non-US analyst houses, since they really show the ability of the firm to succeed in local markets. Regardless of the chatter online, technology preferences have profound national trends that reflects different business cultures and adoptions trends.

That poses a major challenge for AR programs run from the US. Many non-US analysts are in the habit of interacting with a US AR program manager, but analysts have pretty low expectations of them. Many US-based staff interacting with people outside the US do not refer to local reference customers, do not understand local differences in market demand and local requirements, and many are unable to act in the knowledge of different business cultures, especially different expectations about formality.

Many US firms are simply speaking with a foreign accent: explain US market trends and buyer-preferences, while being more flexible over working with different time zones and with different cultural cues. However, non-US technology markets do not develop on a linear model, in which they progressively become more like the US. Furthermore, the ability to deliver in the US does not mean one can deliver elsewhere; as most people who travel with a US carriers' cellphone will testify.

Over-sensitivity at the New York Times? We don't think so.

Many thanks to Fred for pointing out Paul Gillin's comment on Over-sensitivity at the New York Times, which explains that the NYT has apologised to readers for citing Rob Enderle, an analyst who supports vendors including Microsoft, in an article about Microsoft.

Paul comments that "Well, had the Times known of every analyst's work for Microsoft, it would never have any analysts to quote. The reality is that it's hard to be in the tech analyst business without crossing Microsoft's path at some point. But the fact that you take money from a company doesn't mean you're beholden to it."

While Paul's comment is generally true, there are some specific exceptions to that rule. There are some analysts who will support every and any vendor with modestly supportive quotes while taking great pains to say nothing negative about them. This has the effect to level out the differences between vendors, and thus increase what information economists, including my former professor Joseph Stiglitz, call "information asymmetry". As a result of blurring differences, the general effect of "quote-love" is to reduce the power of buyers.

Both Paul and Rob are certainly acting with the best of intentions. However, we think the NYT has acted with some reason. There is a vast difference between the candor with which different analysts, and analyst firms, speak to the media about vendors. The difference is also reflected in the research which is available for free on the internet: that generallly gives technology buyers less clear information and, as a result, buyers find better information in research with they have to pay for.

Bus routes to our London office

Because our London office is close to one of the city's principal bridges, there's an amazing network of buses that come very close. Most Londoners don't own cars, and that makes bus transport rather different here than, for example, in some North American cities.

London Transport has just posted this map to show them, and we thought we should put the link on the blog to help future visitors. The map shows the full routes of all the buses that pass nearby.

Black Prince Road, where we are, is on the right hand side of the map. At the point where it meets Lambeth High Street, you'll find our office: Southbank House.

Qualcomm, the EU and the November Systems Index

The November Systems Index saw IBM and Intel, once again, top the Analyst Index. They hold first and second place respectively. AMD moved up to eighth position and managed to dislodge Toshiba back to tenth.

Despite, or more likely perhaps because of, its on-going EU dispute Qualcomm has had an impressive month climbing five spots to number 28 in the rankings. Indeed, its saga continued yesterday when it was announced that the Japan Fair Trade Commission (JFTC) may investigate Qualcomm 's licensing and chip business practices in Japan.

Texas Instruments had a good month. It rose three places as did Symbol: both have entered the top 25. SanDisk and Freescale are also notable for their steady improvement on last month’s showing.

On the downside, NetApp has fallen out of the top 25 altogether which is surprising given its sterling performance in the media last month, but is pretty much in line with the stock market over the same period. Even so, this still represents a net gain of 3 positions over 2 months, also reflecting the rise of Network Appliance's stock in September. Hitachi Data Systems has also fallen this month, by 6 places.

If you wish to be sent the top 25 firms in Systems Index each month, email us at analysts at lighthousear dot com. You can also read how we do our Analyst Index rankings.

Put the date in your diary!

At Last! The hottest date in England's analyst relations calendar has been named.

Lighthouse is inviting its staff, alumni and board members to join us for our annual holiday-season party. We'll be meeting on December 14th (which is, by odd coincidence, the foundation date of an alma mater of mine, Dartmouth College).

Readers of Analyst Equity are also invited to join us on the 14th, but tell us first so we can insure enough drinks and nibbles are stocked up. We'll be starting at 2.30 pm and will be finished around 5 pm here at Southbank House.

Our cousins get a make-over

Our former house mates, Lighthouse PR, have rebranded following their merger into Loewy. You can check out their new graphic identity here.

We think it's a good strong look for Lighthouse PR. The old logo, shown on the right here, has been shared by the Lighthouse businesses since the brand was founded in 1998. It looked great when printed but, because it's not great on screen, the team here at Lighthouse Analyst Relations went for a stronger, san-serif, design around a year ago.

Lighthouse PR has made a similar move, even more decisively. It's a great way to mark a new beginning for them. We wish them all the best.

DIY case studies and end-user references

Regular readers may know about our weekly Spotlight service, in which we point out the new research that interests us the most. This week we came across some interesting Seybold research which I just had too comment on.

In this CRM case study, Mitchell Kramer explains his own experience of using a bank's website. Let me assure those of you who think that this is just one more analyst venting steam over bad experiences, in the style of Andy Bitterer's 2005 experience of KLM. In fact, Kramer has made a long series of these studies. You can see some similar research here. Other things being equal, I think this is a pretty rare approach towards research, and one that we need to see more often.

Too many case studies are sugar-sweet. Because some analysts rely on vendors to give them customer references and, because some analysts feel that the supply of references from the vendor will dry up if their case studies are not positive, it's a difficult kind of research. Taking the references you're given is highly unrepresentative, even though it's always a surprise to see how frequently reference customers are shockingly frank to analysts about bad experiences. However, most analysts have to either get references through their own clients or do some primary research.... or find another alternative.

Of course, a number of analysts have taking an alternative route. In the same way that Web 2.0 businesses often sell content that their readers have created, some analysts simply surf the wave of web comments. Filtering, editing and concentrating the chat can produce credible-sounding, if eclectic, conclusions - and all before lunch. Other firms are outsourcing more and more of their research, which can work well or badly depending on how it's done.

In the face of all that non-research, it's not only reassuring to see analysts conducting primary research: it's even a little shocking.

To see what other research we liked this week, join the free mailing list for the Spotlights. Click the white [SUBSCRIBE UNSUBSCRIBE] box on the top right.

All change on the podium of this month's Services Index

Accenture is back on top of this month’s Services Index. EDS has been shoved into second place and CSC has ousted Unisys for third position. Otherwise, there is little change in the top 25.

However, if you look a little further down the list, Patni has had a terrific month climbing 8 positions. It is probably still flush from its successes at the recent “CIO Symposium and Award Ceremony” which was the first one to be held in India.

BT Global Services has also scaled a tidy five positions in the rankings following their acquisition of Counterpane Internet Security. In fact, yesterday, it announced a £126million contract with Atos Origin to provide a managed network service for the Department of Constitutional Affairs. No surprises then to find that Atos Origin is up 3 positions as is Verio. Siemens Business Services has recovered from its dramatic fall last month and is up four spots.

On the down side, Verisign has dropped seven positions and Xansa has dropped six positions. Fujitsu Services has also fallen this month and in fact has dropped out of the top 25. Telindus is also down as is CGI Group.

If you'd like to be sent the top 25 of the Lighthouse Services Index each month, please send an email to analysts [at] lighthousear.com.

How we do our Analyst Index rankings

Showing results is one of the key challenges faces analyst relations managers. Some AR managers only track 'inputs' (how much activity they are doing) but most companies focus on 'outputs', the shift in analyst behaviour that they aim to influence.

Our Analyst Index is one of the simplest forms of measuring outputs: it's share of voice research. As we've noted, it's one of the topics that AR managers are most interested in this year.

Share of voice metrics are very simple: they show how prominently vendors are being mentioned in research. They calculate each individual vendor's prominance as a percentage of the total, and then rank the data accordingly. It's a simple enough measure that even the busiest boss can understand it, and it's less dangerous than the traditional approach.

We're not the only people to do studies like this, of course. We are very happy to see that a US competitor is following in providing a similar service. We think our approach is better through, for five reasons.

1. We put more weight on research from the largest and important analyst firms, which reduces the risk of volatile bloggers and analysts-for-hire distorting the data.
2. We look across a wide global range of analyst firms. Many analyst firms give us access to their research and, with a large majority of them, we are the only firm of our type with access their research.
   
3. We also cover a wide range of technology providers; the Index sees how often hundreds of technology firms are mentioned. [While our Analyst Index 'cuts off' after the top 75 firms in each of our four segments, we are collecting data on more].
   
4. Ours also has the merit of being the oldest, most widely used and the only one that's free in its most basic form (although we sell custom analyses).
5. We smooth the data a little with a statistical technique that's rather like a running weighted average. We've found it quite important to do a bit of work to avoid the data being distorted by peaks. The ranking actually does include some of the weighting from the previous month, to smooth the time series. That works pretty well, as one can see from Dell's relative stability in our Index through the Sony battery problems it had. It also gets around the risk of quarterly financial annoucements having a major impact. Generally firms tend to end their quarters in the same months. Almost all close in months 3, 6, 9 and 12. So these peaks end to syncronise and cancel each other out. Few firms do what Dell does, closing quarters on another cycle. Since so few analysts are driven by quarterlies, I can't see this would produce any significant shift in the results [however, using a running average would reduce even that risk: for more about this read why you should not be scared of statistics].
   

Of course, the are limits to every kind of research. An important division exists between the AR pereformance of publicly-listed and privately-owned firms: since public firms often release more information than private firms, they are written about more through the whole year.

One way to get more out of these data is to weight the information according to how importan each firm is to you. Our Analyst Mindshare service takes that a bit further by weighting each firm according to its impact on sales in the market that interests the client. I've also mentioned how Analyst Track, another Lighthouse service, helps to control and manage reputational risk. It takes the same data and uses a combination of human readers and data mining approaches to show the tonality in the research.

A lot of analyst relations managers are very unsure about whether or not AR can be measured in any way. What we've found is that it's only AR programmes that measure their progress which are able to defend and extend their resources.

P.S. One further feature of our Indexes should also be mentioned: we continue to track brands that have been retired. If a company changes its name, replaces a brand, merges or otherwise stops using a brand, we continue to track the rate at which that old barnd name stops being written about. Some brands fall away quickly, like PeopleSoft. Others live for a long time, like MCI. Either way, we would be removing useful information about the 'half life' of brands without that information.

P.P.S. I've added a few words [in square brackets] to the numbered points above.