The Industry-Analyst Cookbook

I couldn’t help but chuckle when I read today’s updated report on the Secure Content Management (SCM) market by number-cruncher industry analyst IDC. Having dealt with some of the companies in the top ten of that report, I can tell you that the numbers they report to IDC are not only incorrect but paint a picture of growth and penetration that could not be farther from the truth.

Investors and entrepreneurs use this data to engage in new ventures together. Business partners base their strategic picks on it. Customers bet their careers on it. Even the suppliers (of SCM solutions) use this data to prove to their business unit managers how much progress they’ve made; what was the last time you got away with writing your own report card?

The problem with the IDC analysis is that it pretends to show what the size of the market is, and the operators in it, by merely adding the sum of finagled realizations.

But what about the size of the total addressable market? A top-down analysis of the market means nothing if it doesn’t intersect with a bottoms-up analysis (how applicable this technology is to the market). How many computers could be protected with SCM versus how many are? Is the sum of realizations equal to the number of opportunities? I don’t think so. There is plenty of opportunity for SCM vendors that think different.

So, not only does the analysis of the opportunity stink, the facts are doctored too. Let’s be real; Secure Content Management is a bull market with room for 130 competing vendors. The evidence no-one has cracked the code yet.

Entrepreneurs should approach security from a new perspective that crosses artificial boundaries defined by the major players. And entrepreneurs (and investors) should challenge the observations of analysts, for they merely and poorly digest what has been, not what shall and must become.


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