Gartner Magic Quadrant for Sale? No, but Access is.

I attended the Olin Innovation Lab at the Franklin W. Olin College of Engineering, hosted by noted Futurist Thorton May this week. It was a good discussion from the IT perspective on Clouds, Augmented Reality, Social Media, Security, and Green Tech. And in the middle of it all, our good friends at Gartner Research were actually booed, as shocking as that sounds.

Here was an audience of 30 or so well respected CIOs from several different industries and they were more than happy to hear the news that Gartner is getting sued by ZL Technologies over their Magic Quadrant methodology.

Many high quality articles have been written on this subject already, you can read one of my favorites on ZDNet here. What I am most interested in however was what the suit, and this reaction means for Gartner, and their brethren. (To be fair, the financial ratings services also took it squarely on the chin during the sessions as well, it was a spirited group!)

In the interest of full disclosure I have worked in the AR field for the last 15 years and have a decent understanding of the MQ game and have survived it a few times. And survive is the operative word here because “winning” is often measured in picas.

Vendors big and small tithe at the feet of Gartner and their brethren because they feel they have to. The Analyst firms have the ear of the technology buyers who consume their reports to make buying decisions. In short, positive Analyst recommendations drive real business, and tech companies know this unequivocally.

Research from a few years back suggested that something like 80% of all enterprise technology deals involved an analyst in some capacity, either through consulting, research, shortlisting or verifying qualifications etc. What I told my sales team at the time was that you needed to assume that analysts were involved somehow even it wasn’t disclosed, and try to find ways to bring the analysts in ourselves to help control the interactions.

But is the MQ truly pay-for-play? I personally don’t think so. I think the analysts have deep integrity and an understandable defensiveness around these issues. The good ones would never be bought so baldly. However, what your money DOES buy is access.

The more I spend, the more access I get. If I am willing to plunk down the half day or full day rate, I can get the analysts time pretty much whenever I want.  And if I use that time well, then I have a greater opportunity to shape the message and the analyst will be that much more familiar with my offering. Which is most important when it comes time to do the MQ or to ANSWER THE SHORTLIST INQUIRY REQUEST FROM MY PROSPECT.

Can you get access without being a client? Of course you can. But nobody for a minute thinks that one formal briefing a year and the answers to the questionnaire is a replacement for the amount of access money can buy.  I know of technology companies whose AR budget alone far outstrip my entire global marketing budget. And with good reason. It works.

Does the MQ skew to higher end companies? In my view, of course it does. Did Gartner try and solve this by coming out with the MarketScopes for emerging markets, up and coming vendor highlights, and well printed fine print about how to view the niche providers? You bet they did.  But as long as the vendors still pony up the dough, and the end-users keep sucking up the reports and using them in the decisions cycle, the circle will continue, lawsuit or no lawsuit.

So what of the booing that went on at the event? Does this mean we are reaching a tipping point where the consumers of these reports are beginning to question their veracity and objectivity? 30 people is hardly a valid focus group, but if this is a signal that one leg of the stool is getting weak, the industry analyst firms should be very, very concerned.

@ajdun

PS: And I really want to know how wronged does ZL Technologies feel that they needed to take this step? What did their AR and PR people tell them when this came up in the strategy session? I need to see the inside story on that one!

Advertisements

3 Responses

  1. Hello,

    On December 4, 2009, ZL Technologies filed an amended complaint against Gartner, Inc. in the United States District Court for the Northern District of California. The Court granted ZL the opportunity to clarify and augment our earlier allegations of defamation and trade libel.

    In the first round of ZL’s legal dispute with Gartner, Gartner argued to the Court that its rankings and other statements in the proprietary “Magic Quadrant Reports” are merely opinions that are not based upon fact, and that they are understood as such by the readers of those reports. However, Gartner’s past statements in marketing materials, white papers, blogs and even the Magic Quadrant Reports themselves, assert that their research and analysts’ opinions are based on a body of facts compiled through what is asserted to be a rigorous process.

    The amended complaint clarifies ZL’s contentions about the inaccuracy of Gartner’s reports, the inherent conflict of interest arising out of Gartner’s voluminous business with the vendors it reviews, and its subsequent bias towards large and established vendors. The amended complaint also adds new detail about Gartner’s repeated claims that its research is based on objective fact—a position exactly opposite to the stance forwarded by Gartner in court.

    While this case is focused on ZL’s dispute with Gartner over the erroneous statements in Gartner’s publications, the issues here also implicate Gartner’s larger business model. Gartner plainly admits that it attempts to leverage value from its largest clients, many of whom are also vendors covered in the company’s research. ZL’s legal filings describe how that business model causes Gartner to favor those large companies at the expense of identifying the best technologies, thus misleading not just the vendors who are inaccurately reviewed by Gartner, but the consumers who base their IT purchasing decisions on Gartner’s biased research.

    ZL is seeking injunctive relief as well as compensatory and punitive damages from Gartner.

    The amended complaint can be found here: http://www.zlti.com/courtdocs/docs/First_Amended_Complaint.pdf

  2. Thanks for the update Rob. Seems like tough sledding for ZL, but clearly you feel there is a case to be had. I think a question on the minds of people who are following this case however is why ZL is pursuing this at all? Perhaps this is in the filings, but in short, what happened that triggered the decision? Was there a specific prospective client that chose another vendor over you based on the report? Did potential investors shy away?

  3. […] that was by far my most popular post of the year that didn’t involve Augmented Reality, the Gartner Magic Quadrant, or One Hour Translations. Not sure why it resonated so much, but perhaps it was the simplicity of […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: