Thursday, 7 June 2007

Why doesn't everyone do open source?

Jonny is wondering why not all firms are switching an open source model:
In praise of open source analysis [Technobabble]

The answer is simple: it takes more time to make money (check this IDC report). Which is an issue if you have to bear costs associated with producing the research -like interviewing customers or channel partners, paying spreasheet jockeys junior analysts, not to forget a decent (or indecent for some Borg Prima Donnas), etc...
Open source on the other hand is both sustainable and convenient if you're an independent analyst doing business mostly with IT vendors: Redmonk, MWD, FreeformDynamics and others seem to be doing well after all...

See our comments on Jonny's post.

2 comments:

Anonymous said...

Open source analysis = fancy name for collateral to sell consulting to vendors????

Jonny Bentwood said...

I agree the transactional-based analyst houses have a much higher cost of production.

My point though, is that much of the data they create through research can often be found elsewhere for free and (more importantly) has far less value than the consulting money their research consequently brings in.

To reiterate, companies want bespoke information that is of relevance to them - not some generic report.

Yes, analyst houses need to cover their costs but I don't believe that in this 'web 2.0' world this business-model has long term viability. There are of course caveats as I mentioned previously where brands have been created (e.g. MQ or IDC for number-crunching).

Nevertheless I foresee many analyst houses relying far more on generating income though consulting and Inquiry rather than flogging reports.

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