The Relationship Between Technology Vendor CIOs and IT Analyst Services Firms

If you’re the CIO at a technology vendor, you may have even more analyst complaints than your peers in other industries. Vendor CIOs use analyst firms for all the reasons other CIOs use them, with one key difference: The vendors have to pitch the analysts on the technology they sell so that the analysts can, in turn, sell the technology to the practitioners. And there is a common perception that to do so, the vendors must pay for the privilege.

Companies that cannot afford the hundreds of thousands of dollars it costs to subscribe to the top analyst companies have long denounced this practice as a polite form of extortion. It can be very difficult for a smaller firm to get more than a few minutes of an analyst’s time. “It’s not quite that direct that you have to subscribe to the service to get on their schedule. But anyone is more inclined to meet with someone they have a relationship with,” says James Brentano, executive vice president of technology for Intraware, a software vendor in Orinda, Calif. Intraware subscribes to half a dozen analyst services and in the past has spent nearly $500,000 a year, according to Brentano.

David Cearley, senior vice president and coresearch director for Meta Group in Stamford, Conn., denies there is a quid pro quo when it comes to meeting with vendors. “You don’t not meet with a vendor just because they refuse to sign up,” Cearley says. And if they do elect to sign up, he says, there is no guarantee of coverage?favorable or unfavorable.

Still, vendors believe that they have to play the game. “[The analysts are] part of getting our message out to customers. And then we use them to synthesize for us what the market is doing,” says Brentano. The cards would appear to be stacked against those who can’t pay up.