I’ve been following Ombud (I’m on the advisory board) with some interest ever since the service was created with the idea of creating a more up-to-date replacement for the Gartner Group. Over the last year, Ombud has been evolving a lot and it has recently been having a ton of success selling a service that massively lowers the cost of vendor bidding and increases the effectiveness of that effort. Its service, which effectively places purchasing inside a large company into a Gartner-like resource, continues as well. This has me thinking about what should be coming next.
Let’s talk Ombud and the fourth generation of IT support firms.
Brief History of Technology Analysis
Gideon Gartner is credited with creating the second and third generations of IT support firms, and his story sticks with me because I worked for him on his last iteration at Giga Information Group and this history was part of his stump speech. The first generation was made up of numbers firms, like IDC and Dataquest (currently part of the Gartner Group). These firms mostly served vendors and provided statistics on how they did in the market. They were the beginning of outsourced competitive analysis, but they provided little insight to buyers. When the Gartner Group was formed, Gideon Gartner had the idea for a firm staffed like a financial firm was for stock, but with experts on technology. This was the Gartner Group, but it was created at a time when there was basically one huge vendor, IBM, and folks were becoming distrustful that what IBM was saying was actually accurate (in effect, Gartner Group exists because IBM began taking customers for granted).
But the world has changed a lot since the 1970s. Giga was created in the 1990s to address what Gideon Gartner saw as significant contamination between the vendor-focused and the user-focused services, and a disparity between the skills of the analysts and the technology they were looking at. Vendors contributed virtually all of the profit for firms like Gartner, which gave them a massive amount of influence, and technology was advancing so quickly that the idea of a re-missioned financial analyst as a technology analyst didn’t make as much sense. So Giga was created with a firewall between the analysts and vendor revenue, and analysts were hired from executive positions in vendors and IT. Unfortunately, before Giga could get to critical mass, it was bought and effectively killed by Forrester as a defense against change.
But a lot has changed since the 1990s, too. We have analytics, we have the Internet, we have social networking, and we have a level of technology change that is as far beyond what it was in the 1990s as the 1990s were ahead of the 1970s.
Ombud was created by a bunch of industry experts tied to the world as it is today.
Ombud has two services. One is a social technology-based, IT-focused service designed to monitor vendors that uses trusted resources (generally internal) to rate those vendors based on actual performance. This is based on the realization that it matters less what the technology is than whether the vendor’s total solution performs as promised. Think of this as creating kind of a magic quadrant custom designed for each IT organization, focusing that organization on using vendors that constantly perform and guiding it away from vendors who often disappoint specifically with relation to the firm. The other service is focused on vendors, creating a collaborative structure integrating RFP responses, compliance, SLAs, contracts and credits into a single view of the IT client with a blended focus on cutting time and cost for bids, increasing bid effectiveness, and better assuring customer loyalty on both sales and service vectors.
In short, the two services rank vendors on performance metrics and supply vendors with the tools they need to rank highly. There are no inherent conflicts because the two services don’t have a hard link to each other; one service actually makes the vendors more responsive and efficient, and the other service correctly identifies and favors vendors who are actually more responsive and effective. The vendor knows better where to spend its resources for higher returns but still has to execute in order to benefit.
Wrapping Up: What’s Next for Ombud
Ombud remains a relatively small company and one of the big concerns is that its solutions have been so effective that ramping the company to take advantage of growth in both product areas has been problematic. Or, put more bluntly, lack of growth isn’t the problem; growing too quickly is becoming one. This showcases that there is a huge demand for this next-generation model, which uses current analytics tools to provide a better solution, in terms of both IT and vendor execution, and both cost and profit, for both vendor selection and customer management.
This isn’t an end game yet, but I think Ombud showcases the foundation for a solution that does what Gideon Gartner originally targeted with his solution, but based on the technologies and thinking of this century instead of the last.
In the end, what makes Ombud interesting is that it starts with the value proposition. IT wants the best services for the least money, vendors want to sell with increasing profitability. Both problems have at their core customer satisfaction, though from different angles.
But, as I think about this, maybe Ombud is the first generation of advisory firms using technology to cover technology, which is really very different.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+