So much has changed the technology landscape over the past decade or so. The Internet has exploded. Mobile devices are ubiquitous. There’s more information available to people than ever before.
Yet one thing that hasn’t changed is the enterprise buying process. Matt Gorniak, cofounder of a new type of analysis firm called G2 Crowd, believes buying is “stuck in the ‘80s,” when companies would spend 12 months making a selection of software. The process, he said, is totally broken.
“It took them three months just to shortlist vendors,” he said. “They are spending a million dollars just on resource costs. And, after all that, they still were not confident they made the right choice.”
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Customers either have to take a vendor’s word for their claims (“industry-leading, best-of-breed…”), try to go to a forum of customers somewhere online, or seek out an analyst’s opinion. “The process is exclusionary” to customers, Gorniak said. As for analysts, he said, “It’s hard for them to keep track of an entire market. They track only the top four or five, so their research is skewed to large vendors.”
Take CRM as an example. “Vendors like their software to be deployed in 5,000-user environments,” Gorniak said. “Most analysts don’t use these systems, so [they] have no hands-on experience. Even if they try one, they’re not trying it at that amount of users. They have no knowledge of whether it’s scalable, or if the vendor is good to work with.”
With IT spending projected to be US$3.8 TRILLION this year, it’s a problem of huge magnitude. “People are making decisions on million-dollar systems with very little facts. It’s all marketing and hearsay,” said Gorniak.
Gorniak thought about other industries and how purchasing was handled in them. He thought of TripAdvisor, where users of hotels and other travel services could leave reviews of their experiences. He thought of Angie’s List, where people could read recommendations for handymen and other services. And, he thought, why not do this for technology purchases?
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G2 Crowd was created in July 2012 and launched to the public in February of this year. Today, Gorniak said, the website has more than 6,000 users and more than 15,000 ratings and reviews of software. “Our premise is, thousands of users and experts are more influential than one person.” Through the use of social reviews and LinkedIn to verify the reviewer, the site boasts of people who have worked with many vendors in the industry for many years, adding legitimacy to their reviews.
The company has even put together a Grid Report for various software systems—not unlike a quadrant graph offered by another analysis firm. The G2 Crowd grid is ever changing, ranking software in the space based on leaders, high-performers and niche. A click on each of the offerings in the grid leads to a link where the reviews of that product can be found.
Customers can pay for the research, which includes ratings based on effectiveness, popularity and other metrics, coming from the results of the company’s compilation algorithm for the data.
“People are used to going to the Internet for information,” said Gorniak. People can suggest or recommend product areas for review, he added, and a development tools category will be added in the near future.
Soon, small development shops will be able to access Big Data research, at a small cost, for a big return. As the TV commercial says, “Bigger IS better.”
David Rubinstein is editor-in-chief of SD Times.