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NetScout takes Gartner's Magic Quadrant to court

Gartner Group fails to prevent NetScout from bringing a lawsuit: ‘Magic Quadrant’ will now be looked at in court

Network management firm NetScout has won the right to take Gartner Group to court, alleging that its ‘Magic Quadrant’ technology market positioning reports are corrupt and ‘pay-to-play’. The Connecticut Superior Court has rejected Gartner’s petition for the case to be dismissed.

NetScout claims that Gartner’s Magic Quadrant ratings were “corrupted by favoritism shown to Gartner’s major customers” and that “its ranking system is based not on objective facts, but rather on Gartner’s ‘pay-to-play’ business model.” NetScout also accuses Gartner of corporate defamation, alleging that the rating and statements about NetScout in Gartner’s 2014 Magic Quadrant report for Network Performance Monitoring and Diagnostics were defamatory and untrue.

magic quadrant hands money thinkstock photos pmcdonald

Source: Thinkstock / pmcdonald

See you in court

This case began in August 2014 when NetScout took umbrage at Gartner Group’s decision to rank it in its Magic Quadrant as a “Challenger” rather than a “Leader.” NetScout objected to the rating it received because it thinks its ranking is based, in part, by its unwillingness to “pay to play”

The NetScout suit contends that analysts’ opinions are influenced by the amount of money some vendors spend with Gartner. It alleges that Gartner’s “substantial success is due to the worst kept secret in the IT industry” -  that Gartner rewards clients who spend substantial sums on its various services by ranking them favorably in its influential Magic Quadrant research reports.

The Court rejected Gartner’s attempt to dismiss the Revised Complaint, denying “in its entirety” Gartner’s motion to strike the case out. Notably, the Court held that “Gartner has not met its burden of showing,” among other things, “that the statements in the Magic Quadrant are protected opinions.”

Buying a place?

Jeff Levinson, general counsel, NetScout

Jeff Levinson, general counsel, NetScout

“The Court’s well-considered decision is a significant win for NetScout, but more importantly, a win for our customers and the industry,” said Jeff Levinson, NetScout’s General Counsel. “The Court’s ruling makes clear that no law allows Gartner to defame technology companies.”

 The court judgement says: “…the court finds … that NetScout has sufficiently pleaded the facts showing that it has been damaged by Gartner’s ‘pay-to-play’ scheme.”

The judgement goes on: “The complaint states that Gartner has a model in which it leverages its influence ‘to pressure IT vendors that are the subject of that research into purchasing additional services from Gartner,” i.e., the ‘pay-to-play’ model.

NetScout alleges that its competitors that spend a significant amount of money on Gartner’s ‘consulting’ services have been placed in the ‘leaders’ section of the Magic Quadrant.

This is not the first time that Gartner Group has been sued for unfavorable coverage. ZL Technologies sued Gartner Group in 2009 for putting it in the niche category of its Magic Quadrant and lost. The difference this time is that the court is prepared to give legitimacy to NetScout’s allegations and they will now be heard in open court.

Readers' comments (1)

  • I was a Gartner Research Director in the 2001-2003 timeframe. During that time I "killed" OS/2 (to the great chagrin of IBM) and killed DOS (believe it or not to the great chagrin of Microsoft as it was till a cash cow for them).

    Both calls were extensively peer reviewed, and after both got a lot of heat from the affected vendors, senior management at Gartner stood up and refused to let our conclusions be watered down by commercial or "pay to play" considerations.

    Of course that was 15 years ago, and I have no idea what the current policies are. But I can say for sure that back then no matter what you spent with Gartner it gave you no serious influence on objective analyst opinions.

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  • Thank you Bernd. Hopefully the court case will bring some clarity to the current situtation.

    Peter Judge

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