Of privately-held firms (and why they are such bad press fodder)

A bigger splash

Why don't the big companies like SAS and Information Builders Inc (IBI) you might actually use at work get the press coverage of, say, Microsoft?

It could be because all journalists are on the Microsoft payroll (but just check out the sort of car most full-time journos – without a day job – drive, compared to those driven by the average Microsoft employee).

I think it might really be because publicly-quoted companies, such as Microsoft, have to keep their share price up - and stock market players read the press.

This means that publicly-quoted companies run whole departments devoted to feeding the press and analysts with information; and even if only 10 per cent is interesting, that’s still a lot of coverage.

On the other hand, a privately-held company just has to keep its customers and owner happy, and may be less interested in providing stories for the press.

Yes, this is an over-simplification, but consider this scenario. If a public company doesn’t make its analyst forecasts, its share price drops (and we punish the company, not the analysts who got it wrong). So “making the figures” that the analyst guessed is all-important – and well-publicised, short-term decisions that accomplish this win out over long-term strategic decisions. After all, the execs can cash in their share options and move on before their long-term pigeons come home to roost.

In an even worse scenario, a new chief exec on a two year contract can announce some “business process redesign” and move the share price upwards (in his two-year window) by sacking people – it is not hard to get this into the press. No matter if the company loses its “corporate memory” on the way (surely no-one really believes that people will dump their expertise in “knowledge management” and “CRM” databases), destroys its morale and, eventually, delivers worse customer service – before heading downhill, during the next CEO’s reign.

A privately-held company may find it easier to make long term decisions in the best interests of its customers, and may not see much need to tell the press about them (in fact, it may not want to attract the attention of the acquisition vultures – not all vultures are as nice as the one El Reg keeps in its office). Of course, a private company may also have a charismatic owner who decides that, say, the PC will never catch on (that’s a bit harder to do, although obviously not impossible, if you’re a publicly quoted company, operating in the full glare of publicity).

Nevertheless, there are rather a lot of private companies around that aren’t making a lot of noise, yet are bigger and more successful than you might expect. And they also don’t have to spend as much money meeting SOX regulations as the public competition. So, it is interesting that a strong player in the Application Lifecycle and Change Management space like Serena is moving back into private ownership. I wonder if this is a trend others will follow?

This struck me just now because I’m preparing to visit the Information Builders Inc (IBI) global summit - and IBI is a privately-held company, devoted to Business Intelligence in the widest sense, with a very interesting message. According to Forrester Research (it says), “today’s feature-packed BI tools have not reached deployments wider than five per cent in most organisations”.

In other words, the oft-quoted vision of “information at everyone’s fingertips” oft comes to nothing, with a few power users getting something out of BI and with a lot of shelfware (or unused licenses) lying around. IBI says, in essence, that you should deliver BI to everyone first, “BI for the masses”, that’s the hard bit; and then rather let the Power Users look after themselves. This interesting message doesn’t come from a publicly-quoted company and doesn’t feature over-much in the general press – perhaps shelfware is good for quarterly sales figures and doesn’t need much resource for support, while “power users” make for nice stories.

Now, IBI has sent me a Best Practices guide to Operational BI (which is what it calls BI for the masses). It’s an interesting loose-leaf book and could make many developers of BI systems think. It raises some concerns, for me: Gerry Cohen, president and CEO of IBI, for example, thinks that if an organisation doesn’t have “at least one BI application saving $1m a year, or more they haven’t realised the full potential of enterprise BI”. Well, perhaps not, but some enterprises have a turnover an order of magnitude less than $1m a year, which must limit their options. Shouldn't there be continuity in BI for a small start-up as it grows into a multinational enterprise?

And, although the book is littered with what are, in effect, adverts for IBI, as well as good advice, it’s not being made available to its potential customers, who are referred to its website – “as the essence of IBI's best practice initiatives runs through the site” (however, there’s a seminar coming up on Operational BI here; and there's an overview of IBI “best practice” here, but I liked the book better).

So, perhaps it’s intended for journalists, but, granted IBI’s pardonable enthusiasm for its products, its impact here would be greater if the book was kept neutral and the IBI examples/illustrations were put in an appendix.

Perhaps this is a downside of dealing with privately owned companies. They may have lots of experience, some very good ideas and a healthy customer base but they’re not always very good press-fodder.

On the other hand, who wants to read “a tale told by an idiot, full of sound and fury” – in the press – which, in the end, signifies nothing, in the real world? Perhaps the lesson, in these days of 24-hour news feeds, is to remember that the “sound and fury” surrounding a publicly-quoted technology company in Cyberspace may have more to do with its stock market performance than its technology. ®

David Norfolk is the author of IT Governance, published by Thorogood. More details here.

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