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EXCLUSIVE: We examine how IDC operates in NZ

18 Mar 2015

IDC’s reports regularly pop up in tech news stories, but have you ever wondered how those reports are collated – or how exactly IDC operates as a business?

We have. So we sat down with Ullrich Loeffler, IDC Australia and New Zealand managing director, to find out the back story to how the analyst firm operates in New Zealand.

When it comes to vendors, IDC reports carry real weight.  It’s not unheard of for executive bonuses to be linked to the analyst firms ‘market sizing’ reports, which detail what percentage of the market – and wallet – a vendor had in their particular market in a given quarter.

In New Zealand, IDC has 14 staff, with local operations headed up by Ullrich Loeffler.

While he’s based in New Zealand, Loeffler who started with IDC in 2006 as a software analyst, also heads up the Australian operations, having taken over as IDC’s ANZ managing director last November. It’s a role he’s been well groomed for, having been the New Zealand country manager for nearly six years, and doing an 11 month stint as IDC Australia research director, before taking on the ANZ managing director role.

The company is known for its market share statistics and highly regarded for its Kiwi stats – where many analyst firms only include New Zealand as part of ‘ANZ’, IDC provides reports specifically on the New Zealand market.

The company’s local analysts all have their own ‘beats’ – cloud, PC, UFB and so forth. Some of the topic areas are so specialised that one analyst will work across both New Zealand and Australia for the topic. Others have a separate analyst in each country. Declining markets – servers for example – also only have one analyst covering the market for both countries.

IDC’s business model actually revolves from both the vendor and IT buyer markets, While vendors traditionally subscribe to IDC research and data for business planning, competitor and TAM analysis, IT buyers leverage IDC research for technology assessment, vendor selection or benchmarking practices

The company was founded 50+ years ago on market sizing and forecasting services, which Loeffler describes as ‘tracking’. Data is gathered from the industry ecosystem including technology providers, channel and technology adopters. The information is cross-validated within the country and also cross checked through a parallel process on a regional level.

But the information gathering is only one side of the analyst profession. They also present their market views and predictions at many launch events, industry and press briefings and other industry events to ensure they’re up to date and across their particular topic area.

Country by country reports are then rolled up into regional and global reports – also available on a similar subscription basis. Vendors pay to see what percentage of the market they – and their competitors hold and how the market is expected to develop over the coming quarters/years..

Analysis is also done across different categories to compare which segments are growing fastest and other market trends.

Make it bespoke

But it’s not just the market sizing reports IDC is known for.  Loeffler says an increasing area of business for the company is bespoke custom projects. These projects are often linked to business opportunity validation such as acquisitions or when a client wants to enter a new market, or perhaps build a new facility such as a data centre. Bespoke projects typically require a tailored research approach with specific primary research or data modelling techniques.

In the case of a company looking to build a data centre, IDC may be called onto analyse the market, pricing and key areas of opportunity for the new venture, with a view to helping the company assess and map the current and future supply vs. demand side for data centre services, current and future pricing trends, and ultimately the ROI calculation of the investment in question.

Bespoke consulting typically doesn’t get seen by anyone other than the client for six to 12 months. After that, it may be used in other research, presentations and consulting, Loeffler says.

Both the traditional market sizing and the more bespoke reports produced are only licensed to the subscriber or client for internal release, although additional licensing arrangements can be made for the report to be licensed for public distribution.

And that, in a nutshell, is how one of New Zealand’s foremost analyst firms operates in our market. Easy!