By John | July 31, 2007
The Analyst Groups
My first real touch-point with an analyst group was a baptism by fire. It was in the early nineties and I was doing a lot of consulting work for a marketing support group at Candle. I was often brought in to do shotgun projects. They would hire me to do stealth competitive analysis on other vendors or they would have me develop projects that they could not get their dev group to do. I used to work for this guy Jim Woolery who made his first million on Texas land deals. In fact the story goes that he would bring his employees at Candle into his office and ask them if they wanted to invest in a land deal. When the employee would say they didnâ€™t have any money – he would say oh yes you do, here is your bonus. What Jim would do with me, is if a customer wanted something that development wouldnâ€™t give him he would pay me to do it. One of the projects I did at Candle was called the Started Task Manager. The STM was an automation tool to start and stop system tasks in order. About a month after I completed the project I get a call on a Wednesday from Jim asking me if I could demo the STM to Gartner on Thursday. It seemed that someone was sick at the last minute and I was the only other one who could explain it. I flew up that night to White Plains
1) They are usually never hands on people. Therefore they never have hands on experience with the technology they pontificate on.
2) Vendorâ€™s subscribe to different analyst groups and these fees are not cheap. IMO, this is an immediate conflict of interest.
3) Most of the analyses J an analyst groups performs on vendors is from a short list of hand picked executives and a vendor picked cherry list customers.
4) The only time I find an analyst to be useful for me personally is when I want to use their data to make a point I agree with.
What does this have to do with OSS ESM? Well last year Gartner published a report defining the OSS ESM stage by describing CA, IBM, HP, and BMC as the â€œBig Fourâ€ and Hyperic, Groundwork, Zenoss, and Qlusters as the â€œLittle Fourâ€. This is a classic example of my 4 points above. I donâ€™t know about HP but I know I never hear BMC or Tivoli worrying about CA so why are they on the $list$. Also, Hyperic, Groundwork, and ZenOSS are different business models than Qlusters (provisioning). One last point on the Gartner report is that if they had bothered to stick their head beyond the vendor interviews and the vendorâ€™s hand picked customers they would have listed OpenNMS as one of the â€œLittle 4â€.
Recently, the 451 Group made some of the same mistakes Gartner made. This time they listed Alterpoint, GroundWork Open Source, Hyperic, Open Country, The OpenNMS Group, Qlusters and Zenoss as the players against the â€œBig 4â€. Here again they didnâ€™t separate the network monitoring from the provisioning vendors (Open Country and Qlusters). Also, since there is not that much financial data about Hyeric,, ZenOSS, and OpenNMS I believe the only way they could have possibly received their data is as I described in point 3 above. I donâ€™t fault them for this. However where I do fault them is where they should have done some deeper analysis. The question I ask about the â€œLittle Fourâ€ and its variations is why isnâ€™t anyone analyzing the business validity of theses models? Donâ€™t get me wrong, I believe OSS ESM is a reality. However, if you look at Groundwork as a template for the others I donâ€™t see how this dog will hunt. Groundwork has 20 million in VC investment and they are still only doing 5 million in revenue after 3 years. You could not try any harder than this company has. They have a robust software company infrastructure with more sales than technicians. And still, as I have previously stated in other blogs, they are doing more than half of their revenue in services not product sales. I personally think that the OSS ESM play is all about services and Groundwork would be in a perfect position to lead the pack if they were not so deep into VC. I can tell you the last thing a VC wants to here is services. Tell tale signs of a pipes breaking in Groundwork will be when you see key players start dropping out. These will be key players who were brought in on the promise of great financial gains and who realize the only people who are going to make any money are the VC and the CEO. This is a common implosion for VC backed ventures. In fact they have already lost one of their â€œFour Hoursemanâ€ in Tony Barbagallo VP of marketing.
Hyperic and ZenOSS have similar low price offerings however, not as much data is published about their financials. IMHO, if they are VC based they will suffer the same fate as Groundwork. Another point that should have been made by the 451 group is that ZenOSS and Hyperic are using a different model than Groundwork. They have developed their own software and instead of going the propriety route they are, IMO, trying to ride the OSS bubble. Ground work has taken more of a SpikeSource route by integrating the best that OSS ESM has to offer and packaging them as one offering. This I have always felt was a brilliant idea itâ€™s just the delivery model of Groundwork that I disagree with.
In conclusion I think analyst groups can be very informative at a surfaces level and their published data can be great guidelines for a road map. One of the hardest $lessons$ I have ever learned is figuring out that my Lawyer is not my business advisor and just my legal advisor. My lawyer is fabulous at making legal decisions however every time I let him creep over into my business decisions things go hay-wire. I kind of look at analyst group in the same vain. I use them to help me understand all the things I donâ€™t have time to research however I would not use them as a source for my technical road maps.
Stay tuned for Part 2 when I take on the VC’s.