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FIRST PERSON: Analyse this!

FIRST PERSON: Analyse this!

Things are a little uncertain in the market. In the lift at work you heard one thing, at the bar you heard something else entirely. God knows, there are a handful of young guns coming up behind you who would like to believe you've lost it entirely when it comes to IT and claim they could do twice the job you do. If you make one more bad decision, you're out the door. Where are you going to find a reliable source of information?

But wait, your saviour has just come in the form of an e-mail promising all the answers. Analysts to the rescue! Market trends, vendor-speak and bold predictions for the future!

Please excuse my cynicism, but I find it a little concerning how much the press relies on analysts for comment and information. It is even worse in the States than it is here. It's hard to find a US-based story without a comment from an obscure analyst. And while ARN reports on sales figures of specific importance to the IT channel, one has to wonder whether it is of interest to the local reseller that Joe Bloggs' research company thinks the US mobile e-commerce market will be worth five squillion dollars by the year 2010.

A lot will happen between now and 2010, and in my opinion it's highly unlikely Joe Bloggs is on the money.

Analyst groups, to my knowledge, have several sources of revenue. There is the revenue from the sales of reports for a start. They cost a packet, but there must be a market for them or else they wouldn't keep producing them. Aside from the reports, I would bet that a significant portion of analyst income comes from research commissioned by vendors - that is researched in the vendors' interest.

Let's take a recent example. Without dragging the names of any vendors through the mud, let's just say that there are two leading the market for Java-based Web application server software. Both claim to be the "market leader by a clear margin" for this product category, based on comprehensive research by several analyst organisations.

How can this be, I hear you say? Surely if the research was accurate, there would only be one market leader in terms of sales. And if that vendor led the market by a clear margin it would be obvious to all which vendor it is. In this case, one vendor cited reports from IDC and Meta Group, the other from Gartner and Forrester. It comes down to who commissioned the research.

If a vendor sits you down and tells you they are a "clear market leader" because the analysts told them so, request solid figures, not "commissioned research". If their product works, if there is a need for it in the market and if they give you good margins to work with - chances are you are on to a good deal. Suddenly whether or not analyst group X thinks its highly scalable or analyst group Y thinks it is going to revolutionise the Internet, becomes highly irrelevant.

The press and, unfortunately, the investor community, took a lot of statistics as gospel a couple of years ago and a lot of money was spent on bad ideas. What analysts are any more in touch with the market than those in the market itself? If I want to know anything about the health of the market, the best source of information would probably be a reseller or a distributor, or anyone who can see patterns of demand for technology products in their everyday business.Brett Winterford keeps his finger on the Web Developer and Channel.com pulse at ARN. Contact him on brett_winterford@idg.com.au


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