We've never mastered the art of the crystal ball here at CMSWire. So don't expect us to tell you who will ultimately prevail in the newly filed lawsuit that pits NetScout Systems against the Gartner Group.
NetScout, a Westford, Mass.-based computer performance management provider, filed the lawsuit last week over allegations of "corporate defamation" arising out of the business research practices of Stamford-based Gartner.
NetScout doesn't like being called a "challenger" rather than "leader" in one of Gartner's Magic Quadrant industry reports — especially because it thinks its ranking is based, in part, by its unwillingness to "pay to play."
Magical thinking? Maybe. But this isn't the first time Gartner has been sued by one of the vendors it ranks, and there's no reason to expect it will be the last.
Don't Worry, It's Magic
Gartner even includes boilerplate language about the risks of "legal proceedings and litigation arising in the ordinary course of business" in its quarterly reports to the US federal Securities and Exchange Commission. But it further notes "the potential liability, if any" is unlikely to have a material effect on its "financial position, cash flows, or results of operations."
So far, that appears to be true. Back in 2009, what was then an email archiving company, ZL Technologies, Inc., unsuccessfully sued because Gartner placed it in the "niche" quadrant rather than in a more prominent spot. Gartner claimed the suit was without merit because the Magic Quadrant is nothing more than opinion based on its research — not an objective presentation of quantifiable facts.
Money Doesn't Buy Happiness Ratings
The NetScout suit goes a step further, contending those opinions are influenced by the amount of money select vendors spend with Gartner. It alleges that Gartner's "substantial success is due to the worst kept secret in the IT industry" — the fact that Gartner rewards its clients who spend substantial sums on its various services by ranking them favorably in its influential Magic Quadrant research reports.
Now, in fairness, just because someone gives you a wad of cash — even in the form of extra business — it's no guarantee you'll write something favorable. Trust me on this: Back when news was still reported in daily papers and reporters were wooed with more insincerity than a contestant on The Bachelor, it was customary for sources to send gifts.
Liquor. Chocolates. Fruit baskets. Tickets to random events.
Eventually, newspaper management — envious of the fact that the gifts generally went to reporters instead of editors and managers — adopted ethics policies prohibiting such gifts. But you know what? It didn't matter.
Reporters would willingly pour from an expensive bottle of Scotch with one hand while writing a scurrilous story about the person who sent it with the other.
Facts, Feelings, Infamous Accusations
But are non-reporters — the less jaded, the less hardened, the ones more likely to have hearts and feelings — as immune from the power of gifts and cash? Can someone with a vested interest in growing a business, not to mention generating value for shareholders, really look as kindly on companies that never spend a cent for its services as it does on the ones that spend big bucks?
Thomas J. Bittman, a vice president and distinguished analyst with Gartner Research, claims "yes."
Back in 2009, the same year ZL Technologies filed that suit over a host of alleged illegalities regarding what writer Paul McNamara has called the "famously controversial Magic Quadrant," Bittman published a self-described rant.