Members of the press looking for commentary on the launch of this new firm can contact SageCircle at “press [at] sagecircle [dot] com” or 503-636-1500 or 650-274-8309.
On March 2, 2010, Horses for Sources (Horses) was launched as an advisory analyst firm covering business process outsourcing (BPO), information technology outsourcing (ITO), and business specific outsourcing. “Horses” is interesting for enterprise outsourcing buyers and vendor analyst relations (AR) teams because it is focused on end users as its primary client base, it is an analyst firm not a consulting firm, and it has innovative research tools through its established social media presence.
For those familiar with Phil Fersht’s Horses for Sources blog, this new firm is the brainchild of Fersht that leverages the personal brand he has developed in a long career as a market researcher, management consultant, and advisory analyst coupled with his very popular blog and 9,000 member community, The BPO and Offshoring Best Practices Forum. However, this is not Phil hanging out a shingle as a single practitioner. Horses launches with three other analysts with practical BPO experience, three expert contributors, and public relations (PR) agency support. Other hires, including more analysts and sales professionals, are in the pipeline which signifies Horses is determined to develop market influence quickly.
This blog post is part of SageCircle’s coverage of this announcement. In today’s AR Community Podcast (on the podcast page and iTunes) there is a long interview with Phil Fersht. There is an extended 54-minute version of the interview on the Free Replays page (free registration and then login required). Finally, a SageFlash was sent to clients.
Here are some salient points about the announcement that we picked up from Horses for Source’s advanced briefing for SageCircle:
- This is a true firm, not a loose collection of individuals operating under a marketing umbrella
- Its research coverage emphasis will be on BPO, which will differentiate it from firms like Gartner which focus on ITO. Moreover the boundaries between BPO, SaaS and Cloud Computing are overlapping, which will put Horses in a strong market position
- The focus will be on decision support for customers of outsourcing. It’s goal is to have 75% buy-side clients
- Horses is launching with enterprise buy-side customers already in its client base
- Horses will not generate market research numbers like an IDC
- Horses will not be a deal broker or sourcing consultant, but will cover deal brokers advisors in the BPO and ITO market
- Horses’ business model will incorporate many traditional advisory analyst firm elements (e.g., annual analyst retainer, regular client-only research publications, and enterprise clients) with an aggressive use of social media for research, marketing, and lead generation
Because of the founder’s blogging and tweeting, the coverage of this announcement will likely give too much play to social media. While this is an important part of Horse’s initial marketing and critical research tools, SageCircle thinks that focusing only on the blog and Twitter activity misses other more interesting implications of this announcement:
- Horses goes beyond blogs and Twitter by having the 9,000-member BPO Forum to leverage In addition, the Horses blog already has over 14,000 subscribers and a large following of regular visitors via RSS / Google feeds. This gives them an enterprise BPO buyer base that might even be larger than Gartner’s. The community is a significant opportunity for use as a source of research data. Yes, Gartner is a $1.2bn firm with tens of thousands of clients, but BPO is only a tiny fraction of that, which limits the number of end user inquiries its outsourcing analysts conduct – a primary source of Gartner’s data points
- Horses has the potential to grow a serious enterprise BPO buy-side client base, maybe over 50%, unlike most single practitioners and analyst boutiques that rely on vendors for revenues
- An enterprise BPO buy-side client base when combined with its vendor selection services should increase Horse’s relevance to vendor analyst relations (AR) and other influencer programs providing it access to vendor executives and thought leaders for research, and budgets
- Horses has the potential to be a contender (see Boutique Analyst Firms: Pretenders and Contenders) with serious visibility and influence
An example of using its online community to generate data points for research is the recent The Industry Speaks series of posts and speech at the Global Service Conference. The series and speech were based on a survey of the online community conducted in January, which received 1,055 responses from buyers, intermediaries, and vendors. The size of the response was impressive, especially for the minimal cost. However, for this approach to be effective Horses will need to grow the community and ensure that it does not overuse it, which could lead to survey fatigue.
In many respects, this is a very traditional announcement that has occurred scores of times over the last two decades. Horses’ founder Fersht’s atypically high visibility via social media gives Horses an advantage for a new firm, but that will only go so far. Ultimately, Horses for Sources can only succeed if it creates a cohesive business, develops exciting new research, and executes on selling and closing business.
One key indicator for AR managers to determine Horses’ ultimate influence over deals is whether it invests in a sales force that can grow the enterprise client base. While its market visibility and likely launch buzz gives it the opportunity generate highly qualified leads, converting those leads into contracts will require significant investment in time, not the least of which will be working with prospects’ procurement departments which is a notable time sink. Fersht has a proven reputation in the industry for developing high-level buy-side contacts and influencing vendor selection decisions; his ability to harness these relationships will be critical for ensuring the long-term success of his new firm. Fersht states that he has sales resources poised to join the firm to accelerate the business growth with enterprise buyers.
SageCircle clients received a SageFlash concurrent to the announcement with more detail about the announcement, more analysis on the business model’s implications, and an in-depth set of recommendations. In addition, Advisory clients are encouraged to schedule inquiries to discuss how to apply the recommendations in the SageFlash to their specific situation.
Analysts
(Photo L to R, Blodgett, Coulter, Persht, McCracken)
Expert Contributors
- Jason Busch (Twitter)
- “Anthony Calabrese” anonymous contributor, Fortune 500 company sourcing buyer
- Yasha Stelzner
(Photos L to R, Busch, “Calabrese”, Stelzner)
PR Agency – Devon Group, Jeanne Achille ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 732-706-0123, ext. 11)
SageCircle Technique:
- BPO, ITO, and other sourcing vendors should immediately look to add Horses staff to their analysts lists, ranking them according to established criteria
- While this is about outsourcing, it is important for vendors to do social media monitoring because of Horses’ heavy reliance on social media
- AR teams should determine their appropriate investments in Horses’ future
- Upgrade status, i.e., manually moving Horses’ analysts up the ranked analyst list so they get a higher tier
- Enhance flow of information by AR doing appropriate briefings
- Provide time for executive and thought leader conversations
- Buy entry level contracts
Bottom Line: What Horses for Sources’ announcement does not do is signal any massive change to the analyst ecosystem in the short term. Nor should a firm of Horses’ size be considered a serious threat to the largest firms like Forrester, Gartner, or Ovum. Rather, Horses complements other firms in the analyst ecosystem. Over the mid-term, a successful Horses for Sources, like the Altimeter Group, could be a role model for boutique analyst firms, especially when it comes to demonstrating the need to build a significant technology buyer client base.
Question: AR – How do you evaluate the status of a boutique analyst firm, especially a new one?
Tags: analyst relations, AR, Horses for Sources, Phil Fersht