Gartner in the dock over Magic Quadrant

Friday October 23rd will see Gartner argue a motion to dismiss a complaint by ZL Technologies Inc about the famed Gartner Magic Quadrant. According to court papers, Gartner will argue to dismiss based on First Amendment rights citing that the Magic Quadrant is not meant to represent statements of fact but is based on pure opinion.

I'm not qualified to argue the legal ins and out of the case and so if anything I say here veers in that direction then you can safely ignore it. However, ZL's plaint is not really about constitutional rights but about what it sees as an abuse of market power.

In a statement sent to me, ZL says of its original plaint:

ZL claims that Gartner’s use of their proprietary “Magic Quadrant” is misleading and favors large vendors with large sales and marketing budgets over smaller innovators such as ZL that have developed higher performing products. The complaint alleges: defamation; trade libel; false advertising; unfair competition; and negligent interference with prospective economic advantage.

This is a topic that from time to time gets aired by those who believe Gartner (and other industry analysts) are in what some regard as an incestuous 'pay-to-play' arrangement with vendors. Earlier in the month, Gartner analyst Tom Bittman hit out at those who argue 'pay to play:'

As an analyst at Gartner, I can’t describe how angry I get when I read bloggers spouting as “fact” their opinion that I and my teammates have no integrity. That we can be “bought.”

In my 14+ years at Gartner, I have never, ever allowed a vendor to influence my opinion with anything but facts. Period. They have certainly tried to influence me with non-facts. I can say this definitively – it has never worked.

I don’t think there is a single vendor that I have dealt with who has not been very angry with me at some point. Tough. I’ve been yelled at by many IT executives – including the CEOs of Microsoft and HP, and many other firms. I can’t think of one of those cases when I changed my analysis one bit. I can’t speak for other firms, but at Gartner, getting yelled at by a CEO is a badge of honor. Being proven right as time goes on – priceless.

I certainly spend time helping vendors with their strategies and their marketing messages – and I enjoy doing it. Frankly, the ones who yell at us the most seem to respect our opinion the most. We can spot holes a mile away, and engaged early enough, we can help vendors fill those holes with real product offerings – that not only help the vendors, but help our end user clients. And my primary business is helping end users.

The post attracted 33 comments including several from Vinnie Mirchandani and myself. Vinnie argues pretty much the same thing that ZL is saying (you need to check the post as there are no comment links):

Tom, as for your former colleague and now a blogger I guess I see both sides. If you think it is just bloggers raising the issues, you are not reading the market, including your customers well.

The issue is not at an individual analyst level. It is at the firm level. You know it and I know it that vendor sourced revenues have been growing nicely as percentage of Gartner revenues. You and I know the majority of top 25 Gartner revenues are vendors like IBM – and individually they dwarf what even the biggest user entities like GE or BP pay you.

It would help if Gartner was transparent about that, rather than avoid talking about it, and if Gartner aggressively showcased how those vendor interests and subtle and not so subtle pressure from them is balanced with user inteersts. The answer usually is the Gartner Ombudsman blog does that. Seriously?

The other thing is 2 of Gartner’s best known tools – the MQ and the Hype Cycle are skewed towards larger vendors and against startups. The MQ rewards market share and viability or tenure in a market. By its very definition the Hype cycle warns people about newer stuff. So Gartner comes across as pro-establishment with more skew towards larger, incumbent vendors

In the field I see time and time again vendors using your metrics where it suits them. I see economics that are dated. In a consulting assignment last year, the CIO asked me fairly loudly during a presentation when a vendor put some of your metrics “so is that 30 or 40% over priced?”