Don’t Obsess, Don’t Ignore: the Magic Quadrant & Tech Vendors [part 1]

Even with the blogosphere and other forms of social media, Gartner’s Magic Quadrant remains the IT market’s most highly visible piece of commentary. Because the Magic Quadrant impacts billions of dollars of corporate IT purchases, some IT vendor executives put too much emphasis on “moving the dot” which drains resources from the overall AR plan. Other vendors decide to ignore Magic Quadrants, missing an opportunity to leverage an effective marketing channel. Neither approach is 100% appropriate. In this post, we provide background on the Magic Quadrant and suggest that vendors take a middle approach between obsession and indifference.*

It is not uncommon for a SageCircle strategist to hear the following comment from an analyst relations (AR) manager: “Our execs – or even board of directors – have made improving our position on the Magic Quadrant THE (not ‘a’) goal for AR.” While ignoring the Magic Quadrant (MQ) can be perilous to a vendor’s top line, too much emphasis on a MQ can drain scarce AR resources from influencing all the analysts covering your particular market. The downside is that AR won’t be able to develop counterbalancing relationships with analysts in other firms, leaving the vendor dangerously reliant on Gartner and the MQ for positive analyst coverage.

We think it’s time that vendors take a balanced approach to the MQ.

Snapshot of the Magic Quadrant

The MQ is the most famous and enduring analyst signature research. It was developed by Gideon Gartner, Mike Braude and Doug Cayne in mid-1980s based on Boston Consulting Group’s “2 by 2” graphic from the 1960’s. The purpose is to offer a snapshot – not a definitive view – of a technology market. It acts as a visual “Strategic Planning Assumption” tool and covers all markets: software, hardware, services.

Around 1993, Gartner’s Editorial Department unilaterally decided that it would no longer permit analysts to use the phrase “Magic Quadrant” to describe this research graphics on the grounds that it was neither a quadrant nor magic. I think I was one of the first analysts who got a draft MQ research note back from Editorial for final review only to discover the words Magic Quadrant had been edited out. Needless to say, this caused an uproar throughout Gartner Group, especially in the Sales force. Why?

The MQ truly is magic… for Gartner.

The MQ is branding, marketing and selling magic for Gartner. Even in the early 90’s it was becoming legendary. While Gideon Gartner bemoans the dominance and misuse of the MQ (watch his 2007 comments at the Computer History Museum), it is valued by the IT managers that use it every day.

Yes, the Magic Quadrant can impact billions of dollars of IT purchasing decisions. Often it is used to select which vendors can bid on a particular project, either formally (e.g., only “leaders” are added to a short list) or informally (e.g., the IT manager thinks “hmm, Acme Software doesn’t have that great of a position on the MQ so let’s just leave it off the short list”).

However, even though it is pervasive and has a high impact, the MQ is not the only game in town. Other analyst firms (e.g., Forrester with its Wave) are working to raise the visibility of their research deliverables. Furthermore, even though Gartner is the largest analyst firm, not every buyer of technology is a client of Gartner. Gartner’s CEO Gene Hall often says on their quarterly earnings call that it is only in approximately 20% of global enterprises with US$1 billion or more in revenues. And even in those clients, Gartner has not penetrated every part of the company. Finally, Gartner is not influential in every market covered by a MQ.

* Are you having trouble convincing your executives to take the middle approach between obsession and indifference? SageCircle’s Executive Briefing on the Magic Quadrant can be a valuable tool in your education campaign about the appropriate approach to take. For SageCircle Annual Advisory clients this and other Executive Briefings are standard deliverables that can be used any number of times.

SageCircle Technique:

• Investigate how the Magic Quadrant actually impacts your market segment
• Educate your executives about the real role of the Magic Quadrant in your market and with your customers and prospects
• Develop and socialize a plan on an appropriate campaign to change or maintain your company’s position(s) on the relevant Magic Quadrant(s)

Bottom Line: While Gartner’s Magic Quadrant is the signature IT analyst deliverable and has tremendous influence with buyers of technology products and services, IT vendors should not become obsessed with moving their dots. It is critical that executives and AR managers take a realistic appraisal of their situation in regards to any particular MQ and devote only the amount of effort proportional to the potential return.

This post is one in a series on the SageCircle blog about how communications and IT vendors and their relationship with the Gartner Magic Quadrant. In addition to this series, there is a “Consumers Guide” to the Magic Quadrant that helps research consumers – whether enterprise IT managers or vendors – make appropriate use of this most famous and misused research deliverable. For those AR managers needing much more depth than what is appropriate please check out the SageCircle AR Wiki where you can find a lengthy thread of articles that provide more depth and breadth on this critical topic in the IT industry including checklists.

1. Don’t Obsess, Don’t Ignore: the Magic Quadrant & Tech Vendors [part 1]
2. Common Mistakes: the Magic Quadrant & Tech Vendors [part 2]
3. Homework – Gather Background Information: the Magic Quadrant & Tech Vendors [part 3]
4. Homework – Talk to the Analyst: the Magic Quadrant & Tech Vendors [part 4]
5. Moving the Dot: the Magic Quadrant & Tech Vendors [part 5]
6. The Danger is Complacency: the Magic Quadrant & Tech Vendors [part 6]
7. Equipping Sales for the MQ Effect: the Magic Quadrant & Tech Vendors [part 7]

Question: Are your executives too much on either extreme of the obsess-and-ignore spectrum? Have you attempted to move them to the center?