Under the banner of a legitimate report on negotiating cloud contracts Gartner’s latest report torpedoes the new players using IBMs old FUD approach . . . will the market listen?

p>The following first post in the 9-Part Analysing The Analyst: Negotiating Contracts in the Cloud Series has been reprinted with permission from the Procurement Insights Blog.

Under the banner of a legitimate report on negotiating cloud contracts, Gartner’s latest offering should be viewed in the context of my January 7th, 2011 post “Madison Avenue ooops . . . make that Gartner, names Oracle as a leader in supply chain planning.”

Leveraging the old IBM classic FUD approach (not Elmer but Fear, Uncertainty and Doubt), the Stamford Connecticut company which as I had pointed out in the January article is owned by a UK-based advertising firm, deftly and subtly I might add, attempts to walk the tightrope between embracing an emerging technical reality while simultaneously eschewing the up and coming players that are its driving force.  Its kind of like trying to separate the salt from pepper duo or Rogers from Hammerstein . . . it’s unnatural.

However, you gotta give the Gartner crew kudos for trying to set the tone of uncertainty right out of the gate in that they weave a cautionary tale of vulnerability in an effort to submarine indigenous cloud providers while leaving the door open to the old guard that by and large pay the bills to keep the lights on.  Maybe being owned by an ad firm with a crack copy-write team has its advantages?

The real question is simply this . . . will the market listen?

Given the results of a ScienceLogic Survey that was released at the FOSE conference in Washington this past summer, which indicated that there are serious and more universal reservations regarding soon to be former Federal CIO Vivek Kundra’s Cloud First policy the answer, at least in terms of the U.S. Federal Government, would seem to be yes.

As covered in my July 27th, 2011 post Fear and loathing in Washington: Why a recent survey found that 92% of government IT leaders have reservations about making the move to the cloud, it does appear that Gartner has a ready audience whose fertile minds are just waiting to have their worst fears confirmed by a supposed objective third party.  Or to put it another way, Gartner is merely giving that segment of the market what they want . . . a reason to keep things the same.  If you think about it, it is a brilliant dance in which mutually motivated, non-arms length stakeholders on both sides of the contracting fence seek a way to legitimately operate within the relative safety and familiarity of a lucrative and long-standing working arrangement.

An arrangement I might add that has its origins with Gartner founder Gideon Gartner, who spent many years working in IBM’s competitive intelligence operations division.

In fact, prior to starting the company that bears his name,  and immediately following his departure from IBM, Gartner joined Oppenheimer & Co. where “he was rated as the top individual securities analyst in the technology field for seven straight years by Institutional Investor.”  

To further stress my point regarding the importance of the relationship between Gartner and its client firms, in its early years it became well known for its “insider” perspective on IBM and the “comprehensive information that it possessed about the company’s products and services.”

Gideon Gartner

While this relational proximity did pose problems in the company’s early years as demonstrated by a lawsuit in which IBM alleged that Gartner and company had illegally revealed IBM trade secrets (the suit was later settled out of court), the die relative to the Gartner business model was nonetheless cast and over time perfected.  This is of course my point in that there is eventually a line that can be crossed when the revenue from the vendors you are covering become your lifeblood.

For this reason alone I will, if nothing else, offer a true arms length assessment of the Gartner findings by way of a 9-Part Series starting this Friday, in which I will review what the analyst firm calls the Nine Contractual Terms to Reduce Risk in Cloud Contracts.

It should be an interesting series.

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