It might just be a case of sour grapes, but ZL Technologies is clearly tired of puckering up to Gartner's fabled "Magic Quadrant" ranking, which has consistently relegated the archiving vendor to "niche" status. After many attempts to prove its technology was on par with "leader" Symantec, ZL filed a lawsuit attacking Gartner's methodology. According to the filing, "at the core of this action are not only the reckless statements made by Gartner as an influential member of the media, but an economic model championed by [Gartner] that elevates marketing puffery over serious technology." The suit sought $396 million in damages and $1.3 billion in punitive damages.
The judge who ruled in early November had little sympathy for ZL. The case came down to whether the Magic Quadrant is an objective presentation of quantifiable facts or, as Gartner argued, just Gartner's opinion protected by the First Amendment. The judge dismissed all of ZL's allegations - defamation, trade libel, false advertising, unfair competition, and negligent interference with prospective economic advantage - but he gave the vendor until December to present something more convincing.
Undaunted, ZL said it will amend and refile its complaint. "ZL believes that Gartner's overwhelming influence on large corporations' purchasing decisions, and its inaccurate ratings, including its bias in favor of large vendors, combine to pose major competitive hurdles that hurt smaller innovative vendors across all technology sectors."
Most observers say the lawsuit was doomed from the start; however, the action does shine a light on how much sway Gartner has over banks' purchasing decisions, and the multi-faceted financial relationships Gartner has with technology vendors. "There's an element to what ZL Technologies is saying," says Kelly Trammell, managing director for technology services at Sheshunoff Consulting + Solutions, which offers bank performance improvement consulting. "[Gartner is] powerful and they have an obligation to be more transparent. So many of their elements are qualitative in nature - vision and the ability to execute - it's hard to quantify those."
Nancy Erskine, a representative from Gartner's Ombudsman's office, says, "Each piece of Gartner research is subject to a peer-review process by members of the worldwide analyst community, and review by research management is required prior to publication. This process is designed to surface any inconsistencies in research methodology, data collection and conclusions, as well as to fully use Gartner collective expertise on any research topic."
Trammell says the danger is when banks lean too heavily on Gartner's findings. Too often banks get halfway into a technology deployment before realizing a critical requirement is missing because they never went through the exercise of articulating all requirements at the start. "Shame on you if you don't know exactly what your requirements are," Trammell says. "You can't outsource that to Gartner."
That's a valid point, a valuable reminder, and perhaps the best outcome that ZL Technologies could hope from its lawsuit.
