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Posted on 09/20/2003 8:36:31 AM PDT by ShadowAce
Editor's Note: How Analysts Get Paid
Sep 20, 2003, 00 :00 UTC (18 Talkback[s]) (2572 reads)
(Other stories by Brian Proffitt)
By Brian Proffitt
Managing Editor
Analyst's report reveals that Linux is more expensive than CP/M!
News at 11!
And so it goes. Analyst reports on the so-called expense of using Linux are a dime a dozen these days, with one analyst group praising Windows and another anointing Linux with the same praises. It is hard to know who is right and who is wrong. It becomes even more frustrating when it is revealed that some reports are sponsored by Microsoft and other proprietary software companies, for the seemingly express purpose of detracting Linux and open source software.
But are analysts' opinions really bought and paid for, as so many Linux advocates maintain?
Here's a shocker: they are, but not in the way you think.
Looking at the typical analyst firm's business plan, there are few ways to generate revenue for the company. One is to do some research, create a report, and then hope enough people are interested in the subject of the report to buy copies of it. Or, better yet, hire the analyst to do more in-depth research for them on a longer-term basis.
Another way, a more stable revenue-maker, is to supply research based on a client's request. The client sponsors the costs of the research and the creation of the report, and is given a copy of the report at the end of the proverbial day.
So, if a client sponsors a report, than the analyst will always have the report conclude the end results the clients wants, right?
Not if the analyst is honest or wants to stay in business very long.
Microsoft commissioned Giga to do that study on Windows vs. Linux development costs a while back, the results of which were released this month. Clearly, Microsoft liked the results, but did the very fact that Microsoft sponsored the report automatically ensure that the results would be favorable to Microsoft?
To reach that conclusion, either one of two things would have has to happen: Microsoft requested a specific "study" with specific end results or someone at Giga decided to please their client and give them the results they thought Microsoft would want to hear.
Let's tackle the first scenario. If Microsoft did do such a thing, and Giga submitted to the request, then both companies are foolish. By not commissioning an honest study, Microsoft would be blinding itself to the realities of the marketplace and, in this case, of honest development practices. By accepting such a request, Giga--if discovered--would be forever branded as a data cooker and would never be treated with any amount of respect (or revenue) again.
If Giga voluntarily provided soothing conclusions to Microsoft, then Giga is more the villain by sending fraudulent data to its client, and Microsoft is more the fool for listening to such information.
With billions of dollars of sales at stake, it would be surprising to me if Microsoft were deliberately cooking the data or surrounding itself with sycophant "yes-men." Yes-men may soothe the ego, but ultimately they will be wrong and lead you down the garden path to destruction.
So, would Giga's report immediately be dishonest because of Microsoft sponsorship? With so many negatives for such a scenario, I think this answer is no. I think most honest analysts will deliver what they believe to be honest information to a client. If, for instance, Giga's report had gone the other way and they found Linux to be cheaper to develop than Windows, that information would still be useful to Microsoft, and would give them a goal to shoot for.
The only difference would be that had that specific report gone the other way, no one outside of Microsoft would ever see it.
I know honest reports are delivered to Microsoft (and other companies) all the time. Linux has too many advantages for proprietary software companies not to receive bad news about one thing or another. After all, if all the analysts' reports were rosy and cheery for Microsoft, why would the company ever take action against open source?
No, I think company-sponsored analyst reports are more honest than we would believe. But the release of reports is dictated not by the analyst firm, but by the company. Which is why the media and the rest of the community very rarely see reports negative about the report's sponsor released to the general public.
In many cases, when a company hires an analyst to create a report, the final dispensation of whatever information revealed in that report belongs solely to the hiring client. Which means that report and its conclusions belongs to the report sponsor and no one will ever see it... unless the sponsor decides to release the information.
In other words, Giga's report was bought and paid for by Microsoft, but not the conclusion of that report.
Which is clearly what happened in the case of this report. Microsoft liked what it saw, and they authorized Giga to release the information. Without that authorization, Giga would never have revealed the outcome of that report. To do so would be legal suicide. If a report is created that Microsoft does not feel is favorable to them, then they do not release the information.
We know such reports exist. Specifically, some of Eric Raymond's Halloween documents recently revealed that analysts were reporting that Microsoft's continued attacks on Linux and open source software were backfiring. Sure enough, the company changed its tactics. But we were never supposed to know about those reports. If it were a perfect world for the kids at Redmond, their tactics would have just changed and we never would have known why. But the information was leaked (intentionally or otherwise), and now there is a kinder and gentler Microsoft.
This is my reasoning for maintaining that corporate-sponsored analyst reports are not inherently dishonest. I am concerned that the media and the community is far too eager to dismiss such reports because of the implied fakery that is believed to be in such reports. There may indeed be some grains of truth in any analyst's reports, no matter who sponsors them. Would we be as dismissive of a report sponsored by Red Hat stipulating that Open Source Rulez? The media would, but the community might not.
My point here is to try to focus arguments on the content of such reports, and not so much their origins. Crying fake just because we don't like a report's sponsor may be a tactical mistake. The origins of an analyst's report should be noted but it should not be the crux of any argument against that report. The methodology of the report, the cited examples, the data-gathering... these are the areas that should be focused upon, if we disagree with the conclusions.
I am not, nor do I intend to be, an apologist for analysts. But knee-jerk cries of foul will not help win any case against their conclusions. The focus should not be on analysts' honesty--something which would be hard to prove, regardless--but on the accuracy of their claims.
Because even if analysts are being honest with what they conclude is the right answer, that in no way means they are right.
Notwithstanding new Linux desktop apps, MS enables greater productivity for tech disinclined end-users. However, a significant cost driver is the continuous presences of virii; regardless of whether MS has holes or more people write virii because MS is a target is not the point - the point is lost productivity.
Now, in a server side environment comprised of knowledgable IT staff, Linux is clearly the better choice not only because of the associated licensing/cost factors, but also due to the lower scale of virus problems (again, whether it's due to lack of holes or smaller installed base is not the point).
If you take religion out of it, each platform has its place. I run MS in the office (even with the add'l overhead of dealing with virii) and Linux/PHP on the Web server. I don't think my situation is atypical - rather, it's probably right there in the middle of the normal distrib curve.
What's the cost of that knowledge? I saw one report, that has no more credablity than any of the others, that Linux gurus were more expensive ( I don't remember the exact metric) as they command a higher salary in the market place.
Wanna be Penguified? Just holla!
Got root?
If the alternative option doesn't more than offset that cost, despite promises of eventual cost savings, few businesses will make the switch.
What are you doing? Writing VB apps? I could see how that would take longer on Linux. :-)
Very un-B2K. Congratulations on the unsually clear headed post. Not a bit of drool.
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