Transparency Between Vendors And Analysts?


David Gee, head of marketing for Hewlett-Packard's worldwide management software business, raises an issue with the IT analyst community:

This is a group of generally well-informed third parties that provide us with feedback, customer insight and competitive positioning information. As an industry, they also provide services to IT managers and decision makers on what technology, solutions and vendors provide to meet specific needs. We as HP and a technology vendor pay the IT analyst community for their insight and advice, and you as purchasers of technology do they same. They publish reports on technology trends, market sizes and vendor assessments and so on.

In many respects, these analysts firms influence product directions to some extent with the vendors and buying decisions by customers. Now here's the real crux of the issue and where I'm really interested to hear your views.
Is there any other industry where there is money changing hands for this kind of advice on both sides of the market--the purchasers and the vendors--where there is little or no regulation and governance?

It's unusual for insiders to speak publicly about the vendor-analyst relationship. But it's becoming more common--thanks to crusading prosecutors like New York Attorney General Eliot Spitzer--to talk about transparency involving publicly traded companies.

One potential remedy is self-regulation on the part of vendors, who could opt for transparency and simply disclose which analysts they pay, how much and any other terms and conditions. Gee, for his part, suggests it's the analyst community that should opt for transparency. Perhaps both will eventually be required to disclose something.

And something is more than what exists now. More than anyone, honest vendors and analysts would be the chief beneficiaries.