The Myth of the Objective Analyst

In the previous post I commented that end-users valued analysts because they provided an un-biased and objective assessment of a vendors strengths and challenges or of a technologies value or speed of adoption.  Is that really true - are analysts truly objective?  Having been in the industry for fifteen years my answer is “not really”.  Certainly many analysts have high moral standards and do not intentionally favor a particular vendor because of outright incentives.  However, analysts are human and all humans have biases.  To say an analyst (and hence the firms they work for) is completely objective belies human nature.  As noted earlier analysts love acronyms.  Being the creator of a catchy acronym is a sure-fire path to fame and fortune in the analyst world.  So if an analyst creates an acronym that starts to gain root in industry and one vendor jumps on-board and adopts the acronym and starts to sing its praises while another vendor favors a competing concept do you really believe that the analyst can objectively evaluate each vendor’s offerings? Likewise if a vendor adopts an analysts position and then aggressively pursues it and spends tens or hundreds of thousands of dollars on consulting fees with the analyst firm, all the while singing the praise of the analyst to the analyst firms management, is the analyst going to remain objective?  

If an analyst is a passionate environmentalist, and one company pursues a “green agenda” while another focuses on serving smokestack industries with technology that ensures compliance but at minimal costs which one will fair better in a comparison?  If you buy the argument that no analyst is completely objective (and hence no analyst firm) how do you measure the objectivity of an analyst - by simply asking key questions about how the nature of the relationship between the various vendors and the analysts.  While no firm will likely disclose revenue figures related to vendor activity you can gauge the relationship by studying the interactions yourself.  You need to understand which vendors are aligned with a particular analyst firms philosophies and which are pursuing an alternative path and how that might impact the objectivity of the analyst.  So while analysts can be a credible source of insight you must do your homework to understand how their opinions might be influenced.

Dan Miklovic is blogger contributor for Control's blog Manufacturing 2010. You can email him at [email protected] or check out his Google+ profile.