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August 07, 2009


Seth Gottlieb

The big analyst firms will never adequately cover open source software (in particular, community open source) because it is against their revenue model. The big analyst firms make nearly all their money from the software companies that they cover (asking about how they are doing in relation to their competitors and the size of the market) and the investment community (asking what stock/companies they should buy ). Open source software does not have the marketing or M&A budget to get a seat at that table.

The only types of open source that are likely to be covered by the big analyst companies are large commercial open source companies (like Red Hat) and hybrid companies (like IBM and Sun). But in order to get that big, you need to sell high margin, commercial software products.

That said, I don't think this is much of a problem. The research of the big analyst companies is pretty worthless from a buyer perspective. If buyers are still making decisions based on what Gartner says, they are probably not ready to benefit from open source anyway.

Scott Paley

Thanks for commenting Seth.

One question though... if the big analyst company research is pretty worthless, how is Gartner still in business? They must make a pretty penny from these reports. Somebody must think they're add value. If the buyers don't care about it, I'm not sure I understand how, in the long term, the vendors would either.

Aaron VanDerlip

I think the key to Seth's comment is from a buyer's perspective, these analysts provide little value. The analysts earn revenue from the companies they review, the latter get exposure (advertising). The same is true for many of the publications and magazines dealing with CMS, they are very close to catalogs of products in terms of content.

Having attended an expo with many commercial CMS vendors, I can say that they are not marketing and selling based on end user experience. Licensing costs are only the beginning since by nature a CMS needs customization. This becomes a second source of revenue for these vendors, as their clients usually do not have the option of choosing their implementers. To be fair, a large percentage of the cost of a CMS is the integration and customization work, open source included.

I will say that many commercial companies have an 'open source like' pitch in terms of their own code base, or at least that was the pitch I got, sans suit I looking more like the programmer type to their sales staff. So open source is seen a competitor at that level.

I highly recommend Seth's blog
https://www.contenthere.net ; in a world of mushy reports and analysis it is a breath of fresh air.

Seth Gottlieb

I meant it is worthless for software buyers.

Most of the money is in the subscription business. A big company like IBM will spend several million per year (sometimes up to 10 million) at each of the big firms. The primary value that the analysts provide is all the market surveys that they do. They can make predictions about how big the ECM market is going to be over the next 5 years. I don't know how accurately they are, but because nobody else knows, they offer enough credibility for execs to support calculated market gambles (like Autonomy buying Interwoven).

I still have plenty of software buying clients that carry (smaller) analyst subscriptions but they read the reports more for the overall technology trend analysis so they sound well informed. They also like going to the briefings simply for the networking aspect. Still I hear more CIO's referencing articles on Tech Crunch and other blogs than Gartner.

Ray Ranson

After carefully studying / reviewing this report for the last 4 years now, I am not sure I can safely say Gartner has some consistency within their evaluation criteria for their yearly Magic Quadrant release. Sure, many market conditions can change the quadrant scatter chart 'shape' and the companies that are positioned in their respective quarters, but as an Enterprise Architect, on the street and visiting dozens of companies and talking to many more year after year, OpenText is in major trouble with their salesmanship and overall ability to execute but is comfortably at the top.

Daniel Greenfeld

Gartner is crap. I've dealt with their mistakes since 2002. I need to blog about it one day.

Dylan Jay

I've been thinking that community open source could perhaps do more to make it comparible. For instance, Plone as a community is a very distributed and loose organisation but it is still an organisation. As a total organisation, including commercial integrators, it does make sales. Consultancy, support, hosting etc. If Plone were a single company that would all be tracked and reported on so that those who like such things to analyse (for better or for worse) could do so. But is it possible, even without Plone being one company?

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