Simplification or Limitation? Three months of Forrester's new Wave

As a part of the analyst relations industry for many years, I've seen numerous changes in how research firms present their findings. Forrester 's recent update to its Wave methodology, from July 1, 2024, represents a significant shift in their approach. But is this change a game-changer or a necessary step to stay relevant in an evolving market?

The key updates to the Forrester Wave include:

1. A shift from four to three ranking bands

2. Renaming "Current Offering" to "Strength of Offering"

3. Replacing the market presence metric with customer feedback

4. Introducing an interactive digital experience for clients

At first glance, these changes streamline the Wave methodology. However, as we dig deeper, some concerns emerge.

The reduction from four to three bands - now Leader, Strong Performer, and Contender - raises questions about nuance in the evaluations. Forrester argues that the 'Challengers' band was underutilized, appearing in fewer than 10% of evaluations. They also suggest that three bands align better with their 1-3-5 scoring rubric.

Forrester has clarified that no vendors are being automatically dropped due to this change. Due to the increased "real estate" in each band, they expect to have slightly more Leaders than in the past. However, this simplification may come at a cost of losing some granularity in vendor differentiation.

Another concerning change is the reduction in customer references from numerous survey responses to just three interviews per vendor. While this may streamline the process, it risks reducing the depth and representativeness of customer insights - a critical component of these evaluations.

Forrester's position in the analyst firm market has faced challenges recently. There are indications that the company is scaling down its sales team while investing in generative AI, suggesting attempts to adapt to changing market dynamics. As Elena Hutchison pointed out in a LinkedIn discussion (linked the comments), "No one chooses analyst firms based on that stuff [interactive features]." The real value lies in the depth and quality of insights provided.

The analyst firm landscape is evolving, with increased competition not just from traditional rivals like Gartner , but also from business advisory firms like 德勤 and KPMG (Disclosure: I am a Deloitte alumnus). These firms are increasingly seen as playing a similar role to analyst firms in technology purchasing decisions. In this context, Forrester's Wave update can be seen as an attempt to stay relevant and competitive in a rapidly changing market.

Forrester has built a reputation for disruptive and provocative research, often being first to market with insights on emerging trends. The removal of the 'Challengers' category initially raised questions about whether this might reduce coverage of innovative startups and scale-ups. However, Forrester has assured that they remain committed to covering emerging markets, with ongoing discussions about potentially tweaking the methodology to better showcase these sectors.

As Robin Schaffer noted in the LinkedIn debate, "We need challengers to Gartner. These changes in the Wave are a step on a long journey." While I agree with the sentiment, I'm not convinced these particular changes are the right step forward.

To strengthen its position, Forrester should consider:

1. Leveraging its efforts in creating specialized waves for niche markets to differentiate from competitors and capture emerging trends.

2. Clearly communicating how the new three-band system will highlight innovative and disruptive vendors.

3. Demonstrating the value of its AI investments in enhancing research quality and insights.

4. Focusing on thought leadership in areas where it has traditionally been strong, such as customer experience.

The success of Forrester's strategy will depend on how well it can balance simplification with comprehensive analysis, and how effectively it can leverage its strengths to compete in an evolving market landscape. As Rebecca Morris aptly put it in the LinkedIn discussion, "I do not think that the Wave changes are a game changer: not for buyers, not for vendors, and not for AR pros. They are an interesting change that look to me like they may offer an improvement on the Wave product."

In conclusion, while Forrester's interactive Wave aims to simplify and streamline, it may be limiting its ability to capture market nuances and emerging trends. The key question remains: Can Forrester balance simplification with the need for nuanced, forward-looking analysis in an increasingly competitive market? Only time will tell if these changes to the Wave methodology will strengthen Forrester's position or limit its ability to capture the full complexity of rapidly evolving technology markets.