[Guest Post] Humpty Gartner’s Logic

Blog courtesy of: Simon Levin (IIAR Board Member), Managing Director at The Skills Connection

A client of mine was talking to a Gartner analyst recently and learned, to his delight, that the analyst had given a particular prospect a clear steer in his direction.

“They’re a mid-sized company and they asked for my advice on relevant vendors, so I told them you guys were definitely relevant for small and mid-sized enterprises,” the analyst said.

But nothing happened. Our client didn’t hear from the prospect. And it was only later that we discovered our client had even been removed from a previously compiled consideration list as a direct result of this brief conversation.

The client was mortified. The analyst was baffled. The prospect, of course, missed the opportunity of acquiring what may well have been the best possible solution for his particular set of requirements.

Nobody had done anything wrong. In fact, everyone had acted in utterly good faith. But the result pleased no-one. And it arose from a problem that I believe to be causing a good deal of mischief at the moment.

The problem is simply this: what does the term mid-sized mean?

In this particular instance, the prospect was convinced he was being warned off the vendor, when the Gartner analyst was actually trying to give him a firm and helpful recommendation to consider our client.

It’s all a bit too much like looking-glass logic for my liking.

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.” 

“The question is,” said Humpty Dumpty, “which is to be master – that’s all.”

There’s no denying Gartner’s dominant position as the biggest and most influential of the technology research organizations. We all know that the company’s recommendations, assessments, comments, and even hints colour buyers’ views of vendors, directly influencing thousands of vital purchase decisions.

So it is a matter of critical importance if companies keen to hear Gartner’s views and act on its advice are misunderstanding what its analysts are saying.

In their research and guidance, the analysts are continually using terms like SMB and mid-sized, or medium-sized, in the belief that everybody understands what they mean. But that’s not necessarily true.

There is simply no standard definition. The US Small Business Administration states that a midsized enterprise can have as many as 1500 employees. Industry Canada defines midsize as less than 500 employees. The European Commission defines midsized as up to 250 employees OR revenue of 10-50 Million euros. To some degree, of course, that all makes some sense, as where you are certainly makes a difference. A big company, as perceived in China (population 1.35bn) is most certainly not the same as a big company as perceived in Australia (population 22m).

Add to this though that each technology company has its own definition. For example, Microsoft has traditionally classed firms with 50 to 1000 employees as mid-sized, while SAP, for example, preferred a range from 101 to 2,500. Xerox has offered a narrow definition of 101 to 500, while analysts at Info-Tech are on record as defining medium-sized as being between 50 and 5000 employees.

If Microsoft sees a 50-person firm as mid-sized and Info-Tech uses a similar term to cover a 5000-person company, it’s not surprising that wires get seriously crossed sometimes.

Gartner’s own definition (http://www.gartner.com/it-glossary/smbs-small-and-midsize-businesses/) provides little more real clarity. “In the United States, between $50 million and $300 million in annual revenue and between 100 and 1,000 employees; in Europe, between $10 million and $150 million in annual revenue and between 75 and 300 employees”. How many people are aware that is their definition? More to the point, how many of their analysts know that this is their definition? And/or stick to this definition?

Now, I don’t have a single neat solution to this problem, but I would be very interested to hear the views of other IIAR members.

Have others experienced the same thing, and seen clients and their prospects go on to totally misread the messages from the analysts? These could be expensive mistakes, and we, as an industry, shouldn’t just be dodging the issue. The one thing I know is that the present situation is a recipe for confusion and disaster – and it shouldn’t be allowed to continue. Should we as an association be pressing all the analyst firms to stop using such vague terminology – and instead to state explicit company sizes in any given piece of research?

Is now the right time for us to be launching a Campaign for Research Clarity? Is this something the IIAR should be putting its weight behind? Please add your comments below – for or against – and let’s get a sense of whether this is a campaign we should take up with Gartner and the other research companies.

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4 Responses

  1. What an interesting take!

    Like

  2. Do you have a concrete suggestion Simon? Your article shows that Gartner’s definition of mid-market is both clear and is publicly available. Garner cannot prevent the misuse of language.

    Like

  3. Duncan. I do. My concrete suggestion is that we should press analysts to be explicit about the size of company they are indicating by directly using revenue or employee (or both) numbers in their research rather than using vague terms like mid-market which are open to interpretation.

    You are right that Gartner’s definition is explicit. BUT we both know that 1) most Gartner analysts probably dont know this definition and 2) examples show that, even if they do, its not adhered to. As a result it makes the situation worse not better as it implies there is a standard that their analysts are using – but they are not.

    Like

  4. Duncan, I do. My concrete suggestion is that we should press analysts to be explicit about the size of company they are indicating by directly using revenue or employee (or both) numbers in their research rather than using vague terms like mid-market which are open to interpretation.

    You are right that Gartner’s definition is explicit. BUT we both know that 1) most Gartner analysts probably dont know this definition and 2) examples show that, even if they do, its not adhered to. As a result it makes the situation worse not better as it implies there is a standard that their analysts are using – but they are not.

    Like

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