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“We Are Not Influenced By Vendors”

Of course we bloody are – we talk to them every day. How can industry analysts not be influenced by vendors? Just wondering… after reading a quote in this interesting document i had not seen before. I didnt know the Oracle PeopleSoft court case threw up these insights into how a major vendor “works with” industry analysts.

The trick is to parse the influence and be transparent about who we do business with.

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3 Responses

  1. As an insider (an analyst) I can assure you that for a period of time Oracle sent nastygrams to anyone who characterized their offer as “hostile”. I also know that the folks at my firm who recieved these told Oracle to shove off.

    The real issue is not specific objections of vendors, the issue is who analysts are motivated to work for. Some firms get most of their money from corporate customers, and the analysts are paid based on the work they do for those customers. In many cases, however, the analysts are paid based on work they do for vendors.. this is where the conflict starts.

    There is nothing wrong with a vendor hiring James to advise them on how to positoin products, etc. What is wrong is if this causes you to have a more favorable view of that vendor than you should. Since we all tend to have favorable views of people who pay us money, it is important to know where the money comes from.

    BTW, where does your money come from? :)

    On a related topic, there is one thing that in all of your analysis of the analyst community you have consistently gotten wrong, and it comes up most frequently in your discussions of why the analysts do not pay enough attention to open source technologies.

    This thing is one of those that is so simple, it is easy to miss….
    The reason people pay analysts is not to help them understand and make use of technology, (which is what your analysis implies) but it is to help them spend money on technology. The link with spending money is very strong.. and if you look at a successful analyst firm, you will discover that the coverage for their chosen constituents aligns very closely to how money is spent by those constituencies. As Open source starts to become a greater percentage of spend, then it will get more coverage.
    This of course begs the question about the role of analysts in evangelizing new things, but I think that most firms (at least, the ones I am familiar with) are pretty comfortable with the idea of open source solutions, and are also able to discuss the particular solutions that have some significance today in specific markets. However, they do not spend a lot of effort marketing this, because this is not where a lot of money is being spent right now.

    AnonymousMarch 7, 2005 @ 4:03 pmReply
  2. The great majority of our revenues come from vendors. we’re not secretive about the fact.
    http://www.redmonk.com/jgovernor/archives/000407.html

    i always prefer answering questions on trasnparency from folks that dont post anonymously – but that is just a preference.

    you make my point rather well. thanks. the business is all predicated on buying behaviours when the relationship between an analyst and an enterprise should be based on suggesting the best approach for the job–even if that means not purchasing a lot of new systems. That is a key reason we don’t do “advise by ticklist”. the only time we can give decent advice to an enterprise is when we have talked and listened to them – found out their existing skillsets, technologies and goals, the degree of process and architecture maturity, and so on.

    you say i have consistently got it wrong. that is your opinion. i tend to think we’ve got it consistently right. Just becauae that is how things are now doesnt mean we shouldnt try and change them.

    money being spent is NOT a good reflection of technology being deployed. it just is not granular enough and gives no sense for what platforms are pushing into the enterprise.

  3. Hello (This is the anonymous poster from before.. I would prefer to attribute this, but circumstances prevent me from doing so right now).

    You are correct, and I did misspeak about you “getting it wrong”. I believe that what you are doing is in many ways much more in line with where the analyst business needs to go than what the major firms are currently doing.

    What I meant to say was specifically that when you comment on other analyst firms, you often criticise them for ignoring the open source initiatives and alternatives, and you express incredulity that they could miss this stuff. I believe that there are three major reasons why the published material does not stress these alternatives. The first is that the analysts are often not asked about these things. At the end-user focussed analyst firms, the majority of customers are at best “early majority” adopters. This means that most of the prospect and customer base is not “bleeding edge” and the materials are designed to correlate with the types of technologies that customers will be considering today. (Since an immediate question is the best way for the analysts to get a customer engaged). Given where we are with open source in many areas, this should not be surprising that there has been only modest coverage thus far. The very low price points of some open source offerings adds to the myopia of the analysts, because while you may consult with someone when you are about to spend several million on something, you may decide not to bother when it is only several tens of thousands. And finally, these offerings do not have marketing departments that make sure the analysts don’t forget about them, and that they know about all the successes that they have had. While of course a good analyst will do the legwork , the information on open source is not as easy to uncover in many cases, because there is no one whose job it is to package it for the analysts.

    In a few years, open source alternatives will be so prevalent in markets that no one will question whether they belong on the magic comparison charts, but today the combination of user hesitancy and self selection make their adoption harder to see for the traditional analyst firms.

    AnonymousMarch 8, 2005 @ 3:55 amReply



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