From 2014 – present, the most quickly expanding job category in America for increasing numbers of new jobs is Truck Driving. For example, last week, Alan Lepofsky and I provided a short briefing call for a financial analyst from a well-known Wall Street investment firm on the subject of CRM vendors. At the end of the call, the financial analyst remarked that what he liked about our call was our ability to refer to specific examples with specific customers. Update: my friend Jon Appleby has a great post, critiquing the same financial analysis post I referenced here.
As my late business partner used to say, financial analysts are using a different algebra.” Seeing things from the investor perspective can help me, as an industry analyst, understand why a vendor may be behaving in a certain way. So, just as shareholders shouldn’t ask me for investment advice, enterprise IT buyers shouldn’t read financial analysts for advice on technology decisions.
However, in my limited experience – enterprise buyers do rely partly on financial analysts’ version of the story – especially the bigger ones. I have often seen procurement folks using financial news to grill vendors on their commitment to the product or segment long term. If we consider a company like salesforce, they are making a loss, not using convention financial reporting and are not keeping costs in check.
All that said – I am in full agreement with you on the spirit of your article – Industry analysts have a much superior ability to help buyers than financial analysts. But short term, CEOs of publicly held companies are extremely conscious of the opinions of financial analysts, as they can influence the share price, which is often tied to the executive’s comp plan. My point is not that corporate executives should not listen to financial analysts. Cloud, HANA and mobility are the new SAP buzz words that analysts will feel whoever is buying into your junk.
This is vital information for a customer to know and will be reported by 10 financial analysts to every 1 industry analyst. Interesting and I largely agree with the idea that industry analysts are more reliable when it comes to analyzing the products of tech companies. There are a handful of financial analysts that understand enough about tech, so you should always keep an open ear to hear them too (if you know which ones to trust). Financial planners/advisors- a financial planner is also called a financial advisor.