Know Your Analysts' BiasesKnow Your Analysts' Biases

No one is immune to bias--from the most seasoned research director at the big analyst firms to the most ruggedly independent conspiracy theorists flooding the blogosphere. The challenge is to understand an analyst's bias and factor that into your own analysis.

Analyst firms launched in recent years go out of their way to avoid the appearance of bias. Former Gartner analyst Rich Stiennon doesn't write vendor-sponsored white papers for his new firm, IT-Harvest, and he says he has turned down financial stakes in his most recent employer, anti-spyware vendor Webroot Software, and a handful of other vendors.

Rob Enderle, one of Stiennon's contemporaries, went solo after years as a research fellow with Giga Information Group. Enderle concedes that many of the criticisms about analysts are valid: They restate the obvious, make unsubstantiated claims, and are biased toward certain vendors. "Boy, there's almost no way to get around bias," he says. "I take revenue from vendors; it's fair to say that impacts me in some way." Like analysts in many other small firms, Enderle says he invests his own money in large, diversified funds rather than in individual companies.

Small research firms can't escape scrutiny any more than their big competitors can. Stephen O'Grady, co-founder of RedMonk, a market research and consulting firm, says he addresses accusations of bias by including disclaimers in research whenever it references a client. Blogs run by the firm also blunt any accusations that RedMonk is hiding bias, O'Grady says. "If someone thinks we're biased, they can challenge us on one of our blogs."

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