An email archiving software company has filed a legal complaint against analyst company Gartner after it was placed in the ‘Niche’ segment of the Magic Quadrant market analysis.
ZL Technologies says that Gartner’s appraisal of its technology is “derogatory because [it is] understood by technology purchasers as a warning, by Gartner, that ZL and the ZL Products are not good choices for enterprise email archive applications.”
The company took opposition to the fact that software company Symantec’s offerings, which it claims are not as technologically advanced as its own, appear in the ‘Leader’ segment of the Magic Quadrant in question.
Gartner makes it clear that the Magic Quadrant takes a supplier’s ability to grow its customer base – and therefore to secure the funds needed to support and develop a product in future – into account, as well as the quality of the product itself. This, ZL claims in its complaint, “help[s] entrench vastly inferior products in the American economy whose principal virtue, according to Gartner, is good sales and marketing.”
The company alleges that Gartner’s analysis has significantly impacted sales, and suggests it is owed $1.3 billion in damages.
It also calls upon Gartner to make its operations more transparent. “Gartner generates its revenues from payments made by the same vendors whose products it evaluates,” the complaint reads. "Similar to the new rules now being imposed on financial ratings agencies on Wall Street, Gartner should be required to disclose the revenues received from the vendors it ranks.”
In a legal response, Gartner said that “the complaint in this action alleges seven causes of action, each of which depends upon allegation of a false or misleading statement of fact,” adding that its right to express opinions is constitutionally protected.
ZL Technologies is not the first to call on Gartner to make its relationship with vendors more transparent, and such calls have intensified as the IT analyst industry has consolidated. But while if upheld the company’s complaint could trigger greater transparency among analyst companies, it could also threaten their ability to analyse without fear of litigation.