Anyone who doubts the power wielded by IT industry analysts should take a look at this fascinating post from Beth Pariseau in the Storage Soup blog. It discusses how Gartner, the ‘Mr Big’ of analyst houses is being sued for $132 million by email archiver ZL Technologies Inc.
ZL’s ‘main beef’ seems to be that it was wrongly rated on Gartner’s magic quadrant ranking of vendors, which it alleges meant a significant loss of sales. The company indicates that many purchasers refused to even consider its products because of the ranking. And it cites an investigation into one large organisation which made a large purchase based ‘solely on the leadership rankings in the relevant Gartner MQ report’.
ZL says its problems are down to the fact that it was placed in the lower left quadrant of Gartner’s report (ie a ‘Niche player’) because its sales and marketing are not as strong as its larger competitors. And while I’m unfamiliar with the details of this particular case, I can say from experience that there is general confusion in the way people read MQs.
The sought after ranking, and the ‘holy grail’ of analyst relations planners (as every good tech marketer knows) is getting a position on the top right quadrant – a ‘Leader’ positioning. Many IT purchasers (and even some vendors) mistake a top right position as ‘short hand’ for the ‘you should definitely go out and buy this product or service’ position. When in fact if you read Gartner’s own advice about how to use the MQ, it doesn’t mean this at all.
Here’s what Gartner says on its web site:
To evaluate vendors in the Leaders quadrant only and ignore those in other quadrants is risky and thus discouraged. For example, a vendor in the Niche Players quadrant could offer functions that are ideally suited to your needs. Similarly, a leader may not offer functions that meet your requirements — for example, its offerings may cost more than competitors’, or it may not support your region or industry. Use a Magic Quadrant to narrow your list of choices, but don’t base your decision only on the model.
So you can sympathise with companies who lose sales if they aren’t positioned as a Leader. But maybe the real problem is lazy IT purchasers not going through a proper evaluation when making buying decisions.