It was the sort of offer that RISE, an alliance based in Cloud Ring,
couldn't refuse - not because of a mafia-esque strong-arming, but the
more subtle coercion of greed. Leave their home in a resource-poor,
cramped and irrelevant region to become a player on the board of the
Great Game. New territory, richer than they could conceive of. Status -
of the derivative, cape-holding sort - but far more than they had
before. There was only one price: Rent. Each month, no matter what.
Like so many others before them, and without thinking of the
consequences, they eagerly accepted this devil's bargain. This choice
sealed their doom: RISE had become a pet.
For RISE, everything about the arrangement went well for the first few months. Their master, the now-defunct Band of Brothers alliance, had recently conquered the territory of Ascendant Frontier and needed someone to hold space in Feythabolis, Esoteria and Paragon Soul. RISE was settled into a constellation in Feythabolis and began injecting six billion isk each month into the BoB coffers.
Almost immediately, some of the catches became apparent to the more perceptive members of RISE: the alliance had to tower and fuel their rented space with their own isk and their own logisticians, yet without the benefit of any R64 moons (which usually fuel a normal alliance's fuel costs). Not only that, RISE were obliged by their agreement with BoB to defend their territory against hostile incursions, which commenced shortly after they moved in. This was problematic, because RISE had not taken its new territory by force, so the military skills needed for effective defense had never been developed.
After the annihilation of Ascendant Frontier, Band of Brothers relied entirely upon the pet system to populate and defend their three newly-conquered regions. Almost every available constellation was rented out to pets like RISE, Confederation of the Red Moon, and Gods of Night and Day. This enabled BoB to avoid the problem of logistics strain associated with rapid territorial acquisition, provided steady income, and brought thousands of new players to the banner of the 'Greater BoB Community'. The result? Within a year, all of this territory was lost, the pet alliances who once lived there had disbanded, BoB was humiliated, and half of their territory was gone.
As BoB and RISE discovered, in practice, the pet arrangement is a grim thing. Much ink has been spilled over the shameful lack of e-honor and self-sufficiency of pets, as well as the greed and neglect of their masters. However, the pet system isn't merely shameful, it is actively harmful to the strategic interests of the master, and positively deadly to the health of the pet alliance.
For pets, the danger of the arrangement was more extreme. A young alliance matures through the promotion of experienced leaders, particularly in the areas of fleet command and logistics. The pet system is a dead-end for those interested in advancement, because the strictures of the arrangement prevent aspiring leaders from taking a pet alliance in an independent direction. Instead, they aspire to join the master's alliance to shake off the stigma of being 'just a pet'. This results in a continual brain drain as talent is sucked out of the pet alliance to bolster the master. The master is likewise weakened, because the core identity of the landlord is diluted by the influx of former renters.
Worse, a pet alliance jumps ahead of the progression through which independent alliances learn the ropes of 0.0. Many pets are recruited directly from Empire. As renters, these alliances never learn how to be self-sufficient, because they haven't had to train up a capital fleet, siege and capture R64s, take down cynojammers, time strontium, or run a logistics network. When put under any pressure to do these things, they crumble. Pethood becomes a kind of alliance-level infantilism, where the renters never learn what it takes to stand in 0.0 on their own merits.
Like many things in EVE, the pet system seems attractive at first, but becomes a deadly trap for the unwary. If you are thinking about taking the first steps into 0.0, or if you are an established alliance looking to expand into new territory or buttress your income, learn from the mistakes of others and give the pet system a pass. Who would you rather have on your side, a friend or a flunkie?