A computer performance management provider seeks monetary damages in a lawsuit filed this week against Gartner Inc. after the IT research giant named the vendor a "challenger" and not a "leader" in one of its Magic Quadrant industry reports.
NetScout Systems, based in Westford, Mass., filed the lawsuit in Connecticut Superior Court Tuesday under the Connecticut Unfair Trade Practices Act for "corporate defamation arising out of Gartner’s information technology research business practices."
"Gartner is not independent, objective or unbiased," NetScout claimed in its lawsuit, "and its business model is extortionate by its very nature. Its substantial success is due to the worst kept secret in the IT industry: Gartner has a 'pay-to-play' business model that by its design rewards Gartner clients who spend substantial sums on its various services by ranking them favorably in its influential Magic Quadrant research reports and punishes technology companies that choose not to spend substantial sums on Gartner services."
NetScout reported in its lawsuit it has not paid Gartner for consulting services in the past five years.
Tale of the Tape
In a statement to CMSWire, Andrew Spender, group vice president, Corporate Communications at Gartner, acknowledged the company is "aware of a complaint filed by NetScout" in a Connecticut court "that stems from its unhappiness with NetScout’s placement in a Gartner Magic Quadrant."
While it’s not our practice to discuss pending litigation, we do consider this complaint to be without merit and intend to defend ourselves and the integrity of our research processes vigorously. We remain committed to providing our clients with independent research and advice about the products and services that we cover and upon which they have relied for decades," he continued.
NetScout did not immediately return requests for comment. In particular, CMSWire wanted to know if NetScout would have filed a lawsuit had Gartner named it a "leader" in the Magic Quadrant.
NetScout, in business since 1984, reported that since 2011 annual revenue has grown from $260 million to nearly $400 million. NetScout offers sales, support and services in more than 30 countries, yielding international revenues for fiscal year 2014 of approximately $93 million. NetScout employs more than 1,000.
Founded in 1979, Gartner employs approximately 6,000 associates, including almost 1,500 research analysts and consultants. It has clients in 85 countries. Gartner's revenue for 2013 exceeded $1.7 billion.
It routinely distributes industry reports it calls "Magic Quadrants" where it ranks vendors in particular spaces, offering criticism, praise and state-of-the-industry analysis and predictions. It groups vendors into four categories: "Leaders, Visionaries, Niche Players and Challengers."
NPMD Magic Quadrant Questioned
NetScout officials in the lawsuit cited one Magic Quadrant in particular -- the Network Performance Monitoring and Diagnostics market ("Magic Quadrant Report for NPMD"), published on March 6. Gartner ranked NetScout as a "Challenger," which "Gartner defined as, essentially, a technology company that saddles its customers with outdated technology," according to the lawsuit.