Posts tagged Analysts
While many in the community are bracing with the implications of Do Not Track, others believe it won’t have a significant impact on the industry’s ability to effectively optimize advertising dollars. What’s a web analyst or online marketer to do?
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Ever since Facebook’s long-awaited IPO, the social media giant has disappointed investors and faced a seemingly never-ending wave of negative PR. Now, just as things were beginning to calm down, eMarketer revised Facebook’s projected 2012 revenue by a cool billion dollars to $5.04 billion. Debra Aho, an eMarketer analyst, said the following of the revision [...]
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Analysts at IDC said Friday that the launch of Windows 8 in October will be directly responsible for boosting the flat U.S. PC market into a period of moderate growth next year. And they were surprisingly specific about how big a bump Microsoft’s new operation system will deliver.
David Daoud, research director of personal computing at IDC, said the firm is attributing 5 percentage points of U.S. PC market unit growth to Windows 8.
From Flat To Up
“In other words, for 2013, the market otherwise would have been flat,” Daoud told ReadWriteWeb. “But for Windows 8, we boost it by about 5%, so that gives it 5% growth. That’s essentially the premium given to Windows 8.”
On Thursday, IDC reported that PC growth was slowing in advance of Windows 8’s launch in late October. Just 367 million PCs will ship into the market this year, up less than 1% from 2011 and marking the second consecutive year of growth below 2%, IDC said.
Despite the advent of Windows 8, IDC also reduced its worldwide PC forecast for the next few years. IDC now estimates that that worldwide PC shipment growth will average 7.1% from 2013-2016, down from the 8.4% compound annual growth rate (CAGR) previously forecast for 2012-2016. IDC did not formally break out numbers for individual regions.
Next year, however, worldwide PC sales in units should jump from 0.9% this year to 6.5%, with growth accelerating to 7.0% and 7.5% in 2014 and 2015, respectively. Much of that demand will come from emerging markets, whose residents are still buying their first PCs, as well as purchasing Windows 8 replacements for those they already own.
Part of IDC’s adjusted forecast can be explained by its definition of a PC: IDC still defines a PC as a box with an associated keyboard, whether it be a notebook or desktop computer. As more consumers choose tablets, which typically lack those discrete keyboards, the number of “PCs” sold decreases. Daoud also said that IDC factored in macroeconomic conditions; although U.S. GDP growth is expected to be about 2.0% next year, Europe is struggling and the Asia-Pacific region is “cooling off,” he said.
Windows 8 Driving PC Differentiation
One way that PC makers plan to cope is by using Windows 8 to drive new kinds of PCs. The Windows 8 PC designs Daoud has seen show that PC makers plan to differentiate their products. “So we do think there is the opportunity for growth,” he said.
Still, Daoud wasn’t prepared to cast Windows 8 as an unmitigated success, citing increased uncertainty “Windows 8 will have positive repercussions, without any doubt,” Daoud said. “That’s why we’re witnessing consumers waiting for that operating system to hit the market.
“But there’s a lot of unanswered questions: the price point, the design, how consumers will receive the product,” Daoud added. “So it’s also a wild card… We’re certainly moving to a crossroads in the industry: we’re moving to a new OS, new user interface, user behavior, new usage model, new software delivered through the app store, which is a new delivery mechanism. So we’re seeing a totally new type of environment, meaning that consumers will need to be educated about this.”
PC Makers Getting Hammered
Given the anticipation and uncertainty surrounding Windows 8, the slowdown in PC shipments before the launch of the new operating system should have come as no surprise. But PC makers were apparently caught unprepared.
In a conference call with analysts this week, Hewlett Packard chief executive Meg Whitman acknowledged that the number of PCs sold through the channel “softened” or slowed during the second half of July, driving the amount of stock in retailers’ hands “higher than our acceptable ranges,” Whitman said. All told, the company’s commercial revenue slipped 9% and consumer revenue declined 12% year-over-year, HP said.
Dell’s results were even worse: consumer revenue slipped 22%, and a combination of weak consumer environment and macroeconomic concerns prompted Dell to cut its revenue forecast by 2% to 5%.
“In the quarter, we saw the channel drawing down inventory in anticipation of the Windows 8 launch,” Brian Gladden, Dell’s chief financial officer, reported. Dell’s strategy of maximising profits at all levels of the business failed to pay off, as the only growth the company saw was in the low-value segments, Gladden reported; high-end customers, who undoubtedly knew Windows 8 was coming, held off purchasing PCs.
Arrow image courtesy of Shutterstock.
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Writers and analysts who keep an eye on the value of certain stocks, have been writing all year about the curious phenomenon of Google’s stock price. They generally say something along the lines of, “If you compare Google’s cash generation capabilities, why is it valued so much…
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Google top executive Marissa Mayer has surprised the tech industry by jumping ship to become chief executive of Yahoo. Mayer started as a computer programmer for Google and rose to become a star in product development. Her background has left some analysts wondering whether she is the right person to lead the nearly 20-year-old Yahoo, which has plenty of products, but no clear vision of how to stay relevant on today’s Web. “I’m not sure I’m 100% sold,” Shar VanBoskirk, analyst for Forrester Research, said of Mayer’s appointment.
Thirty-seven-year-old Mayer, who was employee number 20 at Google, resigned as vice president of local and location services Monday and is expected to start work at Yahoo Tuesday.
Mayer has been the brains behind the design of Google’s most popular products, including the search engine’s homepage, Gmail, Google News and Google Images. More recently, she was put in charge of Google Maps. Mayer sat on the company’s operating committee, which means she had a direct line to Google co-founders Larry Page and Sergey Brin.
VanBoskirk’s first fault with Mayer is her background. “What I think Yahoo needs is a visionary – an aggressive executive who can make some pretty solid decisions about the business Yahoo needs to be in,” VanBoskirk said. “I’m not sure Yahoo needs another product person.”
Mayer’s hiring also signals yet another strategic direction for Yahoo, marking the company’s fourth in the last two years. In 2010, Yahoo was a media company focused on creating content. It then changed focus to provide tools that other media companies could use to sell ads on the site. During its previous chief executive, Scott Thompson, who stepped down in May, Yahoo had shifted to becoming an e-commerce company.
Hiring Mayer indicates the company is likely to go back to focusing on its consumer products, such as Yahoo Mail. “I want them to pick one thing and stick with it,” VanBoskirk said. “And this indicates yet another strategic vision for the company that’s not consistent with what they’ve been trying to do in the past with previous executives.”
According to Allen Weiner, analyst for Gartner, Mayer’s background was “more a match for Yahoo’s needs a decade ago rather than its current needs as a technology-based media company.”
Many observers expected interim CEO Ross Levinsohn, ex-president of News Corp’s Fox Interactive Media division, to be made permanent. Now that he has been passed over twice, the first time with Thompson’s appointment, Weiner said it would be a “minor miracle” for him to stay.
While Yahoo is financially viable, it is very possible that Yahoo’s time as an industry icon is gone and Mayer won’t be enough to change that. However, if Mayer does, then “she is a first batch tech industry hall of famer,” Weiner said.
In May, CEO Thompson stepped down after only four months. His downfall came after activist shareholder Dan Loeb revealed that Thompson falsely claimed on his resume to having a computer science degree. Loeb, who was waging a proxy battle with Yahoo’s board, was later appointed to the board, along with three of his cronies.
Before Thompson was Carol Bartz, the former CEO of engineering design software company Autodesk. Bartz was fired in September 2011 after two years at the helm. Bartz had replaced Yahoo co- founder Jerry Yang, who returned as CEO in 2008 and lasted only 18 months.
Nevertheless, Mayer, a 13-year-veteran of Google, told The New York Times that leaving the company “was a reasonably easy decision.” She described Yahoo as “one of the best brands on the Internet.”
Mayer’s possible departure from Google had been the rumor around Silicon Valley for sometime. Despite her success in running the company’s most profitable businesses, Mayer watched as Google promoted Jeff Huber to senior vice president of local and commerce, placing him one level above her. While Google played down the reshuffling, the buzz in Silicon Valley was that Mayer would unlikely be happy with the reshuffling, according to The Times.
As Yahoo CEO, Mayer enters a small, elite group of women to lead a major company in the tech industry. Others include Meg Whitman, CEO of Hewlett-Packard, and Virginia Rometty, president and CEO of IBM.
Photo by startupamerica.
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The government-mandated quiet period surrounding Facebook’s initial public offering has ended, meaning Wall Street investment banks that underwrote the company’s IPO can issue research on the stock. And judging from the mixed reviews of analysts at firms that priced Facebook at $38 a share, Facebook shareholders may be wishing they’d stay quiet for a lot longer.
Facebook’s stock fell as much as 3.5% today after research analysts began to publish reports on the stock. Typically, when the 40-day, post-IPO quiet period ends, underwriting analysts will publish reports offering a bullish view to justify the offering price they helped to establish – especially when the stock has dropped below that offering price.
After its IPO, Facebook’s stock quickly fell as much as 33% below its offering price. Over the past three weeks, it rebounded to $33.10, a 13% discount on its offering price.
That put underwriting analysts in a quandary: Do they issue justifications for the original offering price that the market has resoundingly rejected? Or do they throw in the towel and admit that the stock was overpriced to begin with? Looking at today’s reports, analysts seem to be split on that question.
The three top underwriters of the Facebook IPO – Morgan Stanley, JP Morgan and Goldman Sachs – all have buy recommendations on Facebook, setting price targets for the stock between $38 a share (Morgan Stanley) and $45 a share (JP Morgan) between today and the end of 2013.
Even some of the more bullish underwriters concede that Facebook will need some time to deliver on its potential. Goldman, JP Morgan and Morgan Stanley all expect Facebook to fall short of the 12 cents a share profit that other analysts have been looking for in the quarter ending June 30.
But six of the other 11 underwriters listed on Facebook’s IPO prospectus gave a neutral rating on the stock, and many of their price targets are close to Facebook’s current level. On Wall Street, “neutral” is often a nice way of saying “don’t bother.” And those lower price targets are basically telegraphing to investors that Facebook is not expected to rise much higher than its current value in the coming months.
Four investment banks that helped to underwrite Facebook’s stock – Credit Suisse, Barclays, Bank of America and Citibank – all issued neutral ratings on the shares today. And three of them expect the stock to trade between $34 and $35 a share (BofA has a more bullish $38 price target.) While most of those analysts believe Facebook has long-term potential, they feel it’s still expensive at its current price.
Among analysts at Wall Street firms that weren’t listed as Facebook underwriters, there was a similar disagreement. Oppenheimer & Co. saw Facebook rising to $41 a share, while BMO Capital urged shareholders to sell, predicting Facebook falling back to $25 a share, citing slower growth.
Behind the disparate price targets is a debate over whether Facebook can deliver on its promise. That promise is considerable: More than 900 million active users, its deep reach into the data that describes their lives, its ability to target ads, and its focus on user experience are all unrivaled in social networking. Yet, as more users migrate to mobile devices, Facebook has been slow to monetize that transition with mobile ads. Bulls believe Facebook will succeed in mobile as it has on desktops. Bears aren’t so sure.
Then there’s the disagreement over valuation. When Facebook went public, it had a higher price-earnings ratio – more than 100 times its recent earnings – than 498 of the companies in the S&P 500, according to Bloomberg. As a Citigroup analyst noted in a report today, “Super-high multiples and decelerating growth don’t mix well.”
So investors looking to Wall Street analysts for investment guidance are likely to walk away even more confused. The consensus view is that Facebook is either worth buying, or it’s not. It will rise as high as $45 a share, or fall as low as $25 a share.
In other words, you’re just as well off flipping a coin: Heads, buy Facebook. Tails, sell Facebook. Or better yet, do your own research.
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Business Analysts See Hardware and Car Retailing to Improve with the … – San Francisco Chronicle (press release)
Business Analysts See Hardware and Car Retailing to Improve with the …
San Francisco Chronicle (press release)
Perth, Western Australia (PRWEB) May 08, 2012 Oracle Digital, Australia's premier SEO provider, has expressed its support to local retailers by offering its most aggressive social marketing techniques and ethical SEO strategies that would eventually …
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There’s a reason that IDC, Forrester, and Gartner are so big. They offer scale and coverage that small firms can’t match, and they attract industry heavyweights who can make or break emerging technologies. But there’s a downside to scale. Unless you’re a corporate whale, it’s easy to get lost in the shuffle, and getting that superstar on the phone in a pinch might take more time than you have.
I’m certainly not suggesting that you throw away your existing subscriptions, particularly if you’re a vendor or solution provider. Put some effort into those relationships, and they’ll pay themselves back several times over. But there’s something to be said for the little guy, and there are hundreds of smaller analysis firms that can provide you with the kind of service and support you need to make informed decisions on a daily basis.
There’s no way to provide a comprehensive list of analysts or coverage areas in small firms, but I’ve chosen five analysts who exemplify the kind of breadth in business model, coverage areas and perspective you can find when you look beyond the Big Three. Full disclosure: I’ve worked with some of these people before, but don’t hold that against them.
Coverage Area: Gaming
The gaming industry is a tough nut to crack. It’s an art, a business and a unique exercise in supply-chain economics. Plenty of analysts cover financials (“300,000 units shipped!”) and tech (“11 million polygons!”), but most leave the games themselves to the press.
M2′s Billy Pidgeon understands all three worlds. While he’s spent the last dozen years at various research houses, Pidgeon will always be a gamer at heart. He’s produced more than 20 games, including major releases such as 1997′s Turok: Dinosaur Hunter. This street cred gives him access to insights and talent that more buttoned-up analysts might miss. If you’re looking for one-on-one practical advice about the gaming market from someone who’s been there but also gets the big picture, check him out.
The Guys at RedMonk
Coverage Area: Multiple (Tech-Related)
If you’re a Firefly fan, think of RedMonk as the BrownCoats of the analyst world. If you’re not, their motto should tell you what you need to know. “Analysis by the people, for the people” says it all. I would have chosen just one of their four analysts, but that would have violated their whole “community” vibe.
RedMonk tips its hat to the open-source world it covers by giving away its research, believing that an open discussion provides the greatest benefit to everyone, including their paying customers. They make their money from consulting services that start at a flat $5,000 per year, increasing with the size of your company or your consulting demands. For your money, you get access to very astute technical minds focused on helping vendors produce tools that developers will actually want to use. As the business model might suggest, it’s a very populist approach in which the end user, IT manager, or systems analyst is a lot more important than the CIO, which is dramatically different than the coverage aims of most larger firms. If you’re a software developer, $5,000 a year is a very small price to pay for a contrarian perspective.
Coverage Area: Sustainability
Sustainability is no longer just hip; it’s an essential (and sometimes mandated) part of doing business, sitting on a growing pile of hard science. It’s a big industry, so hundreds of consultancies have bolted on an “eco-” to get your business. It’s tough to weed out the pretenders.
David Schatsky has a background in technology, policy and finance. He also spent nearly 10 years at JupiterResearch as a Research Director and President (yet more disclosure: He was also my boss there for a while), so he understands the analyst gig. But what sets him apart from the rest of the eco-kids is his understanding that he shouldn’t do it alone. When he founded Green Research, Schatsky brought in David Meyers, an environmental heavyweight, to build out the company’s real-world expertise and complement his research experience, and they’ve further rounded out their expertise with associated content providers. The result is a small, personalized shop that should be able to address most of your environmental concerns directly, but has the connections to pull in other experts where needed.
Real Story Group
Coverage Area: Content Management
Real Story Group doesn’t work with vendors they cover. At all. No consultations, white papers, or appearances at vendor events – nothing that could possibly influence their coverage. This independence irritates the industry and helps their clients (anyone working with content or knowledge management) trust what they read. While RSG has a number of top-notch analysts (Theresa Regli deserves a shout-out, particularly regarding international content management issues), the man behind the business model is Tony Byrne, the company’s founder.
RSG’s Evaluation Reports are their most popular deliverable, largely because of their Consumer Reports-style comparison charts. They aren’t cheap (running around $2,500 per report), but they can save you tens or hundreds of thousands during your evaluation process and give you the answers you need to ask the right questions of your vendors. Byrne is convinced that RSG’s objectivity and laser focus will convince most one-off purchasers to stick around as clients for further research, as well as advisory services to help manage the tools and content with the software you’ve bought. So far, so good.
Aging in Place Technology Watch
Coverage Area: Seniors, Health Technology
Seniors are our fastest-growing demographic segment, and the technology required to help them age is of tremendous social and financial importance. So it’s strange that until fairly recently, most major research firms treated the category like an afterthought. Laurie Orlov is one of the few experts in that space, and the foremost authority in the study of using technology to remain in the home as you age. In fact, she kind of created it.
Jeff Makowka, AARP’s Senior Strategic Advisor, Thought Leadership, explains her impact: “She’s a real visionary. She took her past life (as a Forrester analyst) and overlapped it with a caregiving experience and basically thought up the category. Solutions already existed, but she defined and legitimized Aging in Place Technology.”
Like every boutique analyst, Orlov’s journey is unique, and probably impossible at one of the largest firms. Small firms will never give you the coverage of the Big Three, and can’t shout your voice as loudly to the world, but they do a great job of filling the gaps if you’re willing to do some searching.
Have you had experiences with small research firms? Let us know who you’ve used and how it worked.
Lead image courtesy of Shutterstock.
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Gartner. Forrester. IDC. And lots of smaller fish, too. You can’t read a tech-industy news story, attend a conference or listen to a sales pitch without someone quoting an industry analyst. For tech companies, analysts are big news and big business, promising to help with transformation, monetization and a slew of other things ending in “-ation.”
But what do technology industry analysts really do? And how do you find the one that’s right for your company’s needs. Let me try to explain, from the inside. You see, from 1999 through 2001, I was an analyst at Jupiter Research, now part of Forrester Research.
It’s a tough job to explain. Analysts write and speak and pontificate – all the things you see in the news – but their true value lies elsewhere.
Companies pay analysts the big bucks to provide educated gut checks before making major strategy moves, for help mapping competitive landscapes and to get the dirt on vendor features and pricing you can’t find anywhere else.
Analysts deliver numbers to justify your hunches, and they can even take the fall when execs need to save face with board members or investors. The best ones make life easier and more productive, but how do you tell which analysts are worth your time and money?
Well, analysts are fond of lists, and old habits die hard, so here’s a list of key criteria:
Don’t Believe the Hype
When I was young and green, I spoke to a crowd of IT managers about testing tools. They nodded, took notes, asked questions and seemed satisfied with my answers. An analyst from a rival firm followed me and ranted for 20 minutes. He was way out of his depth in the Q&A, and was obviously making up answers when he got stumped. He fell back on “You don’t understand – the Internet changes EVERYTHING!” several times. The guy was a jerk, but I felt bad for him.
When the lights came up, the “jerk” had 15 people waiting to speak with him. I had four. Afterward, he shared some wisdom I’ll never forget.
“Always tell them it’s different. Especially when it’s not.” He may have been a goon, but the guy knew how to sell. Seeds of doubt grow into juicy contracts, and for marketing purposes, a controversial statement is worth 10 correct ones.
Marketing is the highest-profile part of an analyst’s job. Don’t get sucked in by the controversy. When evaluating an analyst firm, you can safely ignore just about any controversial headlines or projections, particularly if they show up in the subject of a press release. Whether you agree or disagree with an analyst’s published findings, you’ll need to dig deeper to see whether there’s a useful business partner underneath.
The one exception to this rule is a finding so patently off-base that it’s just silly. You know the ones: “80% of commuters will be using hovercrafts by 2015.” In these cases, the analyst lacks either a brain or a spine. Any way you slice it, that’s bad news.
Examine the Goods
When you buy a subscription to an analyst firm, you’re buying access to the analysts themselves. The research is secondary.
Before you plunk down cent one, set up a call or face-to-face meeting with the analysts who interest you. You might not get to meet everyone you’d like, but the sales team will bring someone with an A-game. This will give you a good idea of the firm’s character and how well its analysts can work with you.
Assuming an understanding of your business and their coverage areas, the basic ingredients of what an analyst has to offer are pretty simple. Look for communications skills, a network of vendor and client relationships, and a healthy dose of business sense. The trick is finding someone who balances all three in a way that works with your business.
Your first introduction to an analyst will probably be a written report. This can help you assess the firm’s target market and general level of technical understanding, but a face-to-face meeting is essential to gauge his or her communications skills. You should feel comfortable explaining your issues, and the responses to your questions should seem considered.
The analyst may not be able to answer all of your questions, and that’s fine. An “I don’t know, but I know who to ask, and here’s why” is infinitely better than getting steamrolled with pat answers or desperate fakery.
Beware of overused buzzwords and cliches, and don’t be afraid to ask analysts to explain their statements in greater detail. Absolutes and one-line mandates are for sales pitches and keynote addresses, not one-on-one conversations. Analysts who won’t listen to you probably won’t listen to vendors or customers either, so they won’t have a lot of secret wisdom to broker.
Prominent analysts at powerful firms command greater respect from vendors and can dig more details from them. This doesn’t mean the analyst needs to be in bed with the vendors it covers. Some of the best, most respected firms are the most resented by vendors. For example, Real Story Group (formerly CMSWatch) is fairly small, but it covers only content management, and it’s never taken a dime from a vendor. This focus and objectivity has earned the firm an incredibly devoted following, forcing CMS vendors to show their cards.
On the flip side, an analyst who consults with a large number of clients in a particular area will be able to broker a lot more collective experience on your behalf. One disgruntled customer of Vendor A could be a fluke, but knowing that 10 have complained to your analyst in the past week could save you from a very expensive mistake.
This is probably the biggest value an analyst brings to the table. We all learn from mistakes, and a well-connected analyst is learning from the mistakes of dozens of clients all the time.
3) Business Sense
Analysts will never know your business as well as you do, and you shouldn’t expect them to. But they should be able to see patterns and linkages you haven’t. The best question you can ask an analyst about anything during a meeting is “How does X apply to me?” X can be a report, a competitor’s press release or something you heard on the news. It’s always a valid question, and the answer isn’t always the most important thing.
What matters is that the analyst listens to your question, considers your specific circumstance and comes to a logical conclusion based on the information provided. If you get an answer that’s counterintuitive but still makes sense, even better. You want someone who can shake things up. If you get back a rehash of the same pitch you heard from the sales rep, move along.
Analysts aren’t superheroes. At their best, they’re smart people who sit in the middle of a lot of valuable information, which can make them a valuable asset to your business. And doing a little homework can help ensure you get what you pay for.
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Two new Q1 2012 paid search reports reinforce the strong growth of the PPC market, driven by higher click-through-rates and lower costs-per-click in the mobile space. Industry analysts share tips for marketers looking to maximize returns in Q2.
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