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A recent lawsuit against Gartner accused the IT research giant's Magic Quadrant of being misleading and unfair. Brought by ZL Technologies of San Jose, Calif., the e-mail archiving vendor felt wronged by a recent Gartner Quadrant ranking that placed it down in the lower left portion.
ZL's contention is that this positioning had damaged its sales significantly. It also claimed that Gartner places undue emphasis on sales and marketing, so it is rigged to favor the big boys. In other words, if you are a large company with a decent sales and marketing presence, you will place somewhere in the top half, while the smaller players with perhaps superior technology are doomed to a lower ranking, as the sales duties are being shared between the CEO and the janitor.
So is there any truth to the claims?
"Most vendors hate the Magic Quadrant and have the perception that it caters to Gartner's larger clients," said Mike Karp, an analyst for Infrastructure Analytics of Westborough, Mass.
Gartner declined to comment, except to reference its Ombudsman blog. Gartner claims vindication in the courts, total innocence and an ethics record that is beyond reproach.
"While the technology provider is clearly dissatisfied with its placement in the Magic Quadrant, we will not compromise our research or be unduly influenced by threats of legal action," said the ombudsman. "We take the independence and objectivity of our research very seriously."
Research for Sale?
Despite these protestations, whispers remain that the big players' hefty contributions to Gartner assures, at the very least, a less negative MQ score than they would otherwise receive.
"Whether or not it actually represents 'pay for play' is, I suppose, in the eye of the individual," said Karp. "But it is certainly true that many vendors refer to engagements with Gartner [and its competitors] as 'paying the analyst tax.'"
Gartner, though, heartily denies such claims.
"Gartner is not 'pay for play,'" said the ombudsman. "Influence over research content or the amount of research coverage focused on any vendor, sector or topic is not, and has never been, for sale by Gartner. Period."
The ombudsman mentioned that a number of vendors have told their prospects that Gartner charges vendors to be covered in its research. Specific amounts of up to $100,000 were being claimed. "Quite simply, if this were true Gartner would not be in business today," said the ombudsman.
Last year, Gartner raked in $1.3 billion, so its services appear to be solidly in demand. But while Gartner's reports generate plenty of cash, the Magic Quadrant garners a huge amount of interest in the vendor community as well as the press. Companies clamor to raise their rankings and regularly trot out favorable results in their own press releases. Clearly, the clout of Gartner carries some weight. But is it weighted too heavily in favor of the mighty? If it does, Karp doesn't necessarily think this is the fault of the analyst firm.
"The Gartner MQ has tremendous value as a marketing tool for Gartner Group," said Karp. "Many smaller companies lack the time, finances and marketing wherewithal to engage effectively with Gartner, and so get relatively little face time and no visibility with them. While addressing this situation is certainly something under Gartner's control, we can't really fault the company for wanting to spend its time where the potential revenue is."
A Purchasing Decision Tool?
The complaint by ZL referenced the fact that many potential customers look to the MQ for product selection guidance. So is it the case that IT managers take the safe route and only choose those products? Karp doesn't believe that IT staffers "cover their asses" by relying on it. In his experience, it is one tool among several that they use to build a short list of vendors.
"Any IT manager using a single tool this one or any other to make a purchasing decision will likely have neither a budget nor a job before too long," said Karp. "Multiple research perspectives are always a requirement for informed decision-making. And whether or not it adds to the intelligence of a purchasing decision by an IT manager is a matter of debate both amongst Gartner's competitors and I'm one of them and amongst IT managers."
Greg Schulz, an analyst with Storage IO Group of Stillwater, Minn., feels that people use the Magic Quadrant for different things. There are those who strongly support and believe in it, others who leverage it for sales and marketing, some who use it as a tool to cover their decisions, and others who put little value in it.
"When I was a customer, it was a convenient yet expensive way of seeing how Gartner thought about different vendors, and as a vendor it was an expensive way to get coverage," said Schulz. "Now I wonder why both customers and vendors continue to play the game, given all of the different Web resources available to them."
He's amazed at how much customers pay for such analyst services when there is similar information available for free on the Internet. And while he has observed some reliance on it, like Karp he's noticed a tendency for IT managers to use it among many other tools in purchasing.
"ZL gets lots of media coverage, and even assuming that they re-file and amend their claims heading back into court, they are doing what others have wanted to do but were too scared to do for fear of the lash back," said Schulz. "Even if the courts reject an amended case, ZL is now on the map as the vendor to stand up and openly challenge Gartner. It will be interesting to see if that rallies customers to them, as well as encouraging others to stand up to the Gartners of this world."
"ZL has probably gotten more publicity from this than their PR agency or their technology is likely to have delivered," said Karp. "But this story is likely not yet over. It will be very interesting to see how well their amended complaint fares."
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