Gartner sued by ZL re. Magic Quadrant; huge damages claim

ZL Technologies, an archiving vendor, is suing Gartner Group for $1.7 billion. It seems that ZL didn't like its position in Gartner's famous Magic Quadrant. In IT Blogwatch, bloggers mostly ridicule both parties -- and poke fun at anyone who bases IT purchasing decisions on a Magic Quadrant.

By Richi Jennings. October 22, 2009.


Your humble blogwatcher selected these bloggy morsels for your enjoyment. Not to mention more from Pomplamoose...

    Paul McNamara spits out his morning coffee:

On Friday, a judge in San Jose will hear arguments regarding Gartner's motion to dismiss a lawsuit filed in May by ZL Technologies that seeks to not only eviscerate the Magic Quadrant but also punish Gartner severely for ever having foisted it upon the IT world. (That some of you are cheering grants ZL's case not a scintilla of validity, but point taken.)


ZL Technologies accuses Gartner of "defamation, trade libel, false advertising, unfair competition, and negligent interference with prospective economic advantage." ... Gartner had the audacity to relegate its software to "niche player" status. ... ZL takes wounded exception to the fact that Gartner considers such squishy criteria as vision and marketing ability when determining quadrant placement.


OK, so how much does ZL want for having been so maligned and mistreated? ... [$1,696 million] ... That's not a judgment request, it's an exit strategy.

Andrew Lochart has been tracking this story for a while:

McNamara holds the same point of view that I expressed last month: ZL doesn’t have a leg to stand on because Gartner’s research reports are covered by First Amendment protections. Yes, we all know that Gartner has virtual monopoly power these days in the IT research area, but the fact remains that what they publish are subjective views on market segments and the vendors that serve them.


There’s a certain symmetry to the fact that this is taking place at the same time that SCO has fired their CEO, Darl McBride, he of the lamentable and endless lawsuits over who owns unix.

David Ferris adds background:

Since its inception, Gartner has consistently placed Symantec in the “Leader” quadrant. ... Other archiving vendors such as ZL ... have for years struggled to get positive placement on the MQ. ... [It] has become somewhat of a holy grail for archiving vendors. ... In the suit, ZL outlines the many ways it has tried to convince Gartner that its technology is on par or superior to that of Symantec.


Any analyst firm is simply expressing an opinion, hopefully an educated one. ... Any analyst vendor rankings need to be transparent concerning the underlying data. How was a decision made, and why? ... Vendors commonly note that if they spend a day or two educating the Gartner analyst (and paying handsomely for the privilege), they often move to a better position in the MQ. ... When you look closely at [MQs], they don’t really hold up. ... Customers evaluating vendors should always look at the products themselves, and not rely solely on analyst opinion.

Michael Krigsman agrees:

As one of the top analyst firms, with revenue in excess of a billion dollars, Gartner’s opinions and recommendations carry substantial weight with technology buyers and influencers. ... Analyst research and reporting is not an exact science, which does lead to real or perceived conflicts of interest.


To increase transparency, analyst firms should also disclose their revenue relationships with vendors. [Including] the break down between retainer and consulting revenue. Consulting is much more influential ... because it represents one-on-one relationships with an individual analyst.

Stephen E. Arnold doesn't suffer fools gladly:

Consulting is often a marketing game. People often forget this premise of the largely unregulated information niche. ... The problem is that most of the people who are “experts” ... may not know as much as they assume. This is the “they don’t know what they don’t know.”


After all, who would market a search system that crashes when it has to process more than 50 million documents? Well, a vendor does in point of fact. Some consulting firms take advantage of this ignorance by making complex issues simple. ... Simplification and the reduction of problems ... to a simple ... grid are fooling themselves, fooling potential licensees, and fooling quite a few “experts”. ... Not too helpful in work centric software procurements.

Unlike his namesake, Dennis Byron isn't mad, bad, or dangerous to know: [You're fired -Ed.]

ZL’s complaint appears to be a little different than the usual pay-to-play complaint. ... The legal paperwork implies that ZL paid (although that is not clear), got to play, and didn’t like the way the game turned out. ZL supposedly got marked down because of poor sales and marketing. ... I would say Gartner got that right.


On the other hand, if the purpose of the lawsuit was simply publicity, ZL's a winner.

So what's your take?

Get involved: leave a comment.

And finally...


Richi Jennings, your humble blogwatcher
  Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, he is also an analyst at Ferris Research. You can follow him as @richi on Twitter, or richij on FriendFeed, pretend to be richij's friend on Facebook, or just use good old email:

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