Analyzing the analysts

Last year, when the Transportation Security Administration developed the primary contract to create the agency's information technology infrastructure, officials relied heavily on Gartner Inc.'s so-called magic quadrant to narrow down the field of possible bidders.

Gartner, an analyst firm in Stamford, Conn., produces about 20 magic quadrants, or frames, that classify product and service vendors in specific technology categories. The frames are divided into four areas — niche players, challengers, visionaries and leaders — and Gartner rates vendors in each area.

Companies and government agencies can use the rankings to evaluate vendors for contract awards. For its $1 billion Information Technology Managed Services contract, TSA required that integrators be ranked one or two in the leader frame to qualify to compete for the award. Surprisingly, the competition for the coveted TSA contract became only a two-horse race between Unisys Corp. and EDS.

If other agencies follow TSA's lead, they could improve government IT by reducing the time it takes to purchase products and services and reducing bidding costs because vendors can avoid contracts for which they don't meet minimum standards. Agencies also will have access to integrators' qualifications and past performance, reducing the potential for vendors' misrepresentations.

But agencies must recognize that analysts, so far, have had little influence in the government IT market. If federal IT program managers plan to rely on analysts, they must inform the vendor community of their intentions. If they do not, agencies may reject capable solutions providers if those solutions providers are not on analysts' lists.

It also is important that government executives consider the complex revenue models that support the analysts. These "IT shrinks" charge fees to consult with both IT buyers and vendors.

All this raises questions regarding analysts' role in the government IT market:

n Will agencies rely on analyst opinions for solution architectures, in which agencies will require enterprise resource planning vendors to occupy leading positions on analyst frames?

n Will other analysts enter the market, setting up a situation in which agencies could affiliate with specific analysts? If not, agencies will have to brief many analysts, which would add new costs to a system that analysts were supposed to simplify.

n Will analysts be held to the public sector's traditional open standards? For example, will analysts be required to provide details on their vendor affiliations?

n Will industry develop a magic quadrant that rates the capabilities of each analyst? Who would evaluate analysts and measure their performance?

TSA's move to embrace commercial best practices should be applauded, and the IT analysts can make significant positive contributions to the government procurement process. But the market must avoid the dangers of introducing new qualification layers and establishing a new analyst hegemony. n

O'Keeffe is a former writer for The Economist and president of O'Keeffe & Co. Inc., a technology marketing firm. He can be reached at


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