Software vendor ZL Technologies has sued Gartner, Inc. about the impact of the firm’s research on its business (see the court documents on its website). Needless to say, this has gotten the attention of twits and bloggers. Here are two example blog posts
- Blog post critical of Gartner – Dennis Howlett in his ZDnet blog post Gartner in the dock over Magic Quadrant
- Blog post addressing the potential for sour grapes on the part of the vendor – Dave Kellogg in his Mark Logic blog post Gartner Sued Over Magic Quadrant for Alleged Damages of $132M plus Punitives of $1.3B
There are legitimate criticisms about any particular firm’s research methodology, whether a standalone piece of research or a recurring research deliverable like IDC’s market share models or Aberdeen Axis. SageCircle, vendors, and others have certainly given Gartner suggestions for improving the Magic Quadrant in private meetings, on blog posts, and in public forums like the Gartner Quarterly AR Call. And to be fair, Gartner has tweaked its methodology a little for the Magic Quadrant over the years, but probably more in response to the Forrester Wave than what they hear from the vendors.
There is also the issue that many technology buyers who use the Magic Quadrant as an input to decision making do not know how to use it (see this post and this one). One of the reasons for the misuse is that vendors buy reprint rights to every Magic Quadrant and Wave giving technology buyers who are not clients of the analyst firms access to these research notes. Unfortunately, the research notes lack the critical context necessary to use the research appropriately.
However, improvements to the research methodology or research consumer best practices are not the issues SageCircle want to address here. Rather, the issue is whether suing Gartner, Forrester, or any other analyst firm with a recurring signature deliverable is a good idea.
Gartner has been sued in the past. While we do not know the specifics about all the lawsuits, there are some things that can be inferred from the public record. First, if there have been settlements favorable to the vendor suing Gartner, then the damages awarded were non-material otherwise they would have shown up in Gartner’s SEC filings. Second, Gartner’s research methodologies for the Magic Quadrant and other signature deliverables have only been modified marginally over the years. If a vendor had won a significant lawsuit over the Magic Quadrant then one would assume that Gartner would have made more substantial changes to the methodologies. Based on these admittedly slim inferences, it appears even though Gartner has been sued over the years, the plaintiffs must not have won any major victories.
If not a legal victory, could a vendor achieve other goals from a lawsuit, especially one so public as this one? For example getting Gartner to change its position on the vendor or damaging Gartner’s credibility? It would seem unlikely that Gartner or any firm would back down in a situation like this because it would invite lawsuits from other vendors.
As to damaging Gartner’s credibility that is unlikely as well even in the age of the blogosphere. The Gartner detractors will point to this lawsuit and go on about what they perceive to be the shortcomings of the firm. On the other hand, many IT managers will see the lawsuit as sour grapes on the part of a vendor who could not execute well enough to break out of the Niche box. Remember there have been vendors very publicly critical of Gartner in the past who did not dent the firm’s or its analysts’ credibility. In the 1990s, Computer Associates’ (now CA) stopped briefing Gartner and criticized its analysts at every opportunity (Carter was at Gartner at that time). The result? Gartner analysts used Computer Associates’ actions as proof that Gartner was on the side of the end user not the vendor. A few years ago, Oracle CEO Larry Ellison went after Gartner analyst Betsy Burton in an interview in the Wall Street Journal and other venues. Again, this public criticism by one of the IT industry’s most visible vendor executives had no impact on the analyst’s or Gartner’s credibility.
Bottom Line: SageCircle does not have any insight into whether or not ZL Technologies has been using the best practices for moving the dot or dealing with a perceived problem analyst. Even though it might be tempting for a vendor to ignore or even sue an analyst who does not give it a favorable rating, SageCircle always counsels that engagement is a better approach. Moving the dot or moving an analyst to neutral or positive takes a sustained, multi-year campaign. While waiting for the campaign to bear fruit, vendors should implement an AR-Sales Partnership program to assist its sales force in mitigating negative research.
Since 2000, SageCircle has helped analyst relations teams to focus on business value by encouraging innovative thinking that leverages insights and drives revenue.