James Governor's Monkchips

RedMonk’s Business Model

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Tim asked so:

We are a service business, primarily. We consult with vendors and users on their problems using open intellectual property models where appropriate.

We help large companies like BMC, IBM, MS and Sun to better understand the industry conversation, the narratives that are sticky enough to drive product purchases or just projects (you don’t need to buy new “solutions” to compliance problems – why not use what you have?). We help small firms with these currents too.

We don’t make all content freely available. Its not GNU. But, for example, we can allow reproduction for *non-commercial* purposes wheras if I write something Microsoft wants to license because it happens to support their position on something they have to pay for those rights. A bit long taily in that regard.

We don’t accept commissions for white papers, although we are willing to license content after the fact. Are there potential contradictions here- sure, MS’ Get The Facts campaign for example, doesn’t commission white papers. But analyst sales forces know what the campaign would like to see more of… Its not a perfect one, this.

We don’t accept stocks or shares in any IT vendors–when we set up the firm Stephen tookly a deeply ugly bath on his Sun stock, because we decided to offload it to support our independence.

I am more than happy to say who my subscription clients are, as long as they don’t mind saying so. Client confidentiality is also crucially important, even though we do believe in transparency where appropriate. In general we would recommend vendors to be open to lower contradiction effects. Would be nice to see apple wake up to this.

Our clients are almost all vendors – but we have worked with many enterprises for free – that is, we talk to them and help with the odd shortlist where appropriate. We do a ton of reference calls from vendors to check claims. When you talk to users your value to vendors increases dramatically.

So yes – vendors buy a subcription that gets them

1. Time with the analysts
2. Access to a library (not all content is free)
3. Pings about important events and trends – we ensure vendors know what conversations are going on, and suggest ways to join them.
4. Speaking engagements on industry issues
5. We also license some content for commercial use.

There is a GREAT quote – stallman or raymond – that the problem with software vendors is they think they are in the product business when really they are in the services business. I think the same is somewhat true of analyst companies.

People need immediate answers to “what is going on” questions – they will pay a premium for aggregators than can help find out faster. Until google is smarter than me, and I become its tool rather than the other way around, I can still charge people for helping them with immediate queries. Could they get the information elsewhere? Sure/ but Sun can build its own chips, or use AMD’s…

Another role we play? We serve as a kind of external corporate memory and connection maker. people move around so much that sometimes an outsider can know the company or area (broadly) or centers of expertise as well as anyone. We’re a virtuall corporate zip drive with semantic querying. That has some value.

But what’s our business model – i think that is a very good question. All analyst companies are currently asking themselves that very question. I believe the models are set for change, so ask me again in 12 months and i will have a better idea

We’re going to be following up with a nod to the meme – tieing our thoughts to Simon’s, on Resoloving The Open Source Paradox. Taking an editorial stance based on available information. We find new ways to package information so it wil me more appealing – in narratives, for example. Part of RedMonk’s business model is too package information in stories rather than reports.

Our business model is primarily based on services, support and documentation. That can be documenting success stories or failures – so its still partly publishing. but the more i see of publishing the clearer it becomes that its not impossible to sell a book and publish it online too. Just ask Cory Doctorow. Or any of the folks set to benefit from another key theme/meme/business model for 05 – expect to see more of the “book and a blog“: So far we have the Red Couch and The Long Tail. There will be more, mark my words. And some of these books very likely likely make the NYT Best Seller list, even with the content already there on the web. I love Gladwell therefore i am going to buy the book, even though i have already read the essays. Oh yeah – thats blink too then. Or was that the New Yorker and a Book model…

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