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Bias And The Credibility Of IT Industry Analysts Reloaded, Part II

In my previous installment on this topic, I noted that InformationWeek is working on a sequel to its controversial February 6 cover story on the credibility of IT industry analysts. The story won't appear until later this month, but I wanted to share with you some interesting ideas expressed to me in the area of bias, an important hurdle for any analyst to leap in order to achieve credibility.

Smaller IT analyst firms aren't immune to this scrutiny any more than Gartner, Forrester Research, or any of the other top-tier IT analyst firms. Stephen O'Grady, co-founder of RedMonk, a market research and consulting firm based in Denver, Co., told me that his firm addresses the bias issue by including disclaimers in its research material whenever a client is referenced. Blogs, he says, are also a great equalizer. "Transparency of our customer list is the key," says O'Grady, who has a blog called Tecosystems. "If someone thinks we're biased, they can challenge us on one of our blogs." Disappointingly, I didn't come across any reactions to any of O'Grady's blogs that made me blush, but there's an undeniable two-way interaction in play.

Even in academia, the appearance of bias can rear its ugly head. "We're partly funded by corporate gifts, so we have relationships with industry," says Ron Durbin, director of industry relations for the Information Storage Industry Center at the University of California, San Diego. ISIC's analysts and academics write reports and papers conceived to shed light on the factors that affect IT industry performance, such as the impact of globalization of hard disk drive manufacturing. Durbin points out that sponsors don't have any editorial control over content, although they do have a look at the center's content before it's published.

Concerns over bias and credibility won't go away simply because newer firms offer blogs. "The IT analyst market will always have with it some inherent transparency and bias concerns, no matter how pristine a company is," Louise Garnett, VP and lead analyst with Outsell Inc., a firm that tracks the market research and analyst industries, told me. "But the new generation has more of a propensity for transparency and disclosure than the old guard."

Ultimately, it's up to the person reading the research or analysis to determine its credibility and understand the writer's bias, Dennis Howlett, author of the AccMan Pro accounting blog and a former accountant, told me. As an example, he points to SAP's Jeff Nolan, who writes the Venture Chronicles blog. Nolan, who used to work for SAP Ventures before taking a job on the operations side of SAP, carries with him an inherent bias, Howlett says. "I don't have a problem with that; I know where he's coming from. Most people are intelligent enough to know when they're being pitched and when they're being given useful information."

In general, people prefer to be spoken to rather than pitched. As InformationWeek's examination of the credibility of analysts, part II, will show, there's no shortage of information available to anyone who goes looking. In the end, however, it's finding the right information that's most valuable. Some of this may come from sources with, shall we say, a history. Does this mean we shouldn't listen to them?

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