Jeremiah Owyang wasn't just any analyst. Forrester employs an estimated 250 analysts in a wide variety of specialties, the company reported $260 million in revenue last year, but Owyang's incredible use of blogging and Twitter brought new attention to the firm and made him a star. When an analyst becomes a star, in a red hot market like social media is now, it's not at all unusual for them to leave the cozy confines of the venerable analyst companies.

How The Analyst Industry Works

If you're not familiar with how the analyst industry works, here's a very short summary. Companies brief analysts on their plans, the state of their businesses and the products they are bringing to market. Some companies pay the analyst firms to have a two-way conversation and get advice from the analysts. Then the analysts write up information-rich reports about some important business trend or another, based on all the briefings they've done. They sell those reports for hundreds or thousands of dollars to consumers wanting to benefit from all the research performed by the analysts.

There are professional analysts for every kind of business you can imagine, and for every step of the process of doing business. There are hundreds of practicing analyst firms doing business in the United States, with some variations on this basic business model, but most are very small "boutique" shops. The analyst market is dominated in almost every sector by one name: Gartner.

In a distant 2nd place, but also far bigger than almost anyone else in the analyst market is Forrester. That's the company Jeremiah Owyang just announced he's leaving after nearly two years of leveraging the company's huge reputation and the emerging communication technologies called social media, to make himself a fast-rising star.

How Jeremiah Owyang Works

Jeremiah Owyang came to Forrester as a blogger and he leaves even stronger in that role. Despite a grueling travel schedule, a rigorous report writing regimen and constant briefings with companies large and small, he's one of the most prolific leading voices in the social media blogosphere.

"My use of social media and my career advancement are intrinsically tied," Owyang told us by phone today. "I started my blog as a practitioner at Hitachi. I budget time every morning to read and blog. I do that before I check my personal email or work email. I believe you have to pay yourself first. When you open your email you pay someone else, because it's usually people reaching out to ask you for something. Taking the time to read blogs, synthesize and add value, that builds your community. That's paying yourself first."

Whenever a major initiative is launched by a large software vendor or a controversy erupts around best corporate use of emerging online communication tools, Owyang strikes fast with a blog post at his site Web Strategist, explaining complex matters in ways that marketing staff can use to talk to their executives.

Over the years he's created a number of valuable resources that lead people to return to his blog again and again; most prominently a running list of live-streaming online video services and a regular digest of "people on the move" taking new social media-related jobs in corporate communication departments.

More than 100,000 unique visitors come to his blog each month - that's more people than visit competing analyst firms Gartner and IDC's websites each month, combined. His skilled use of Twitter has built him a readership of more than 50,000 followers. That's unprecedented visibility in social media conversations for a professional analyst. While analysts have traditionally stood apart from the messy fray of democratic conversation online, Owyang is a leader in a new trend of engagement and broader listening. His success has brought new visibility and customers to Forrester and inspired hundreds of other analysts to join that silly-sounding social network, Twitter.

Owyang has received some criticism as well. Some other analysts said his relative inexperience was also amplified by his high-profile in social media circles right along with his strengths. It's also not clear how close a connection there is between being high profile and landing big clients. That's hard to judge from the outside.

The voices praising Owyang's work are more numerous than the critics, though.

Carter Lusher is an analyst analyst, if you will. The husky-voiced man from Portland, Oregon co-owns a firm called Sage Circle, a two-analyst shop dedicated to tracking changes in the larger analyst industry. They aim to help Analyst Relations departments in corporations learn how to engage effectively with the analysts who are influencing customers whom those companies then seek to sell to. Lusher is bullish on Jeremiah Owyang.

"We call Jeremiah the poster boy for effective analyst use of social media," Lusher says. "And he was a very good analyst; he is very conscientious and does his homework."

That homework became most evident when Owyang stepped away on occasion from the rapid-fire chatter on Twitter and the fast-reaction blog posts he puts up on his personal site.

This Spring Forrester published a particularly prescient report titled "The Future of the Social Web," edited by Jeremiah Owyang. Less than 20 pages long, the report was based on interviews with 24 companies ranging from Google and Facebook to Cisco, Dell and this site, ReadWriteWeb. The entire report (retailing at $499) is a valuable read for customers seeking an informed view of the future of social networks, online identity and commerce. Our favorite passage reads as follows:

"... in a bid to extend the reach of its new browser, Chrome, we expect Google to build OpenID and its associated friend connections into the browser; look for Firefox and eventually Internet Explorer to copy this feature. Facebook and MySpace will also likely build a way for users to surf the Web within the Facebook experience, retaining the social functionality. These connections won't be perfect, but they'll allow social networks to colonize communities and other parts of the Web, extending their experience out to other sites through the shared ID. As a result, in two years, portable identities will become a ubiquitous part of the online experience as they reach maturity."

Less than four months later, Owyang announced he was leaving Forrester for a new project not yet disclosed.

Why Jeremiah Left Forrester

Owyang's next move will remain a mystery until next week, but he has offered some clues about what he'll be doing. "I will be spending more time with less clients and be practicing more," he told us.

"My passion is to help companies communicate with the web," Owyang says. "That's my background. I think companies can be improved because they have these communication channels with their customers. They can build better products, reduce resources and have happier customers. That means the world will be a better place."

The desire to return to active practice instead of analysis was one of the reasons that Carter Lusher guesses Owyang was motivated to leave. Another is money. Lusher estimates that Forrester paid Owyang between $125k and $175k per year. That's not a lot of money for the responsibilities involved, and it's just a fraction of the revenue Owyang was likely contributing to Forrester's coffers. Dividing the company's reported revenues by the estimated number of analysts on staff brings the average revenue per analyst to between $650k and $750k per year. That's the average and some analysts are no doubt bringing in far more. That number is almost twice as high as that of industry leader Gartner, another firm that experiences top staff departures with noticeable frequency.

Lusher says it's not at all unusual for rising stars in hot markets to decide to venture out on their own and try to capture more of that revenue directly. It's also understood by the firms, he says, that this is how it goes.

The same day Owyang announced his departure was very successful enterprise analyst Ray Wang's last day at Forrester. Forrester rock star Charlene Li left last year and struck out on her own. Do these departures mean trouble for Forrester? "Not really," Lusher told us. "They acquired Jupiter Research last year largely because they had a very strong social media practice. They have a very strong team."

Of course not everyone who rocks leaves. Many people in every field produce far more value for their employers than they receive in pay. In that the analyst world isn't unique. "Many go out and find out that it's a lot of work being an entrepreneur," says Lusher. "That's why a lot of the smart people stay at the firms."

Enterprise blogger Dennis Howlett addressed these issues in his coverage of Owyang's departure as well. "Changes in the compensation model may help retain the next rock star analyst but somehow I doubt it," he wrote yesterday. "The analyst firms are going to have to get used to their brightest and best viewing the analyst bench as but a stepping stone for greater things. That has to impact the business model and quite how the firms respond remains to be seen."

Owyang has decided to leave and will now take his strong personal brand, greatly strengthened by his time at Forrester, with him. "I recommend anyone who gets a chance to be an analyst," he told us today.

When he departs, it's not as if he'll be taking social media away with him. Forrester is already looking to fill his position - including with a Twitter account @forresterjobs. What Owyang will do next with his skills and whether his replacement at Forrester will bring the same social media success to the firm remain to be seen.

Photo CC by Frédéric de Villamil on Flickr.