There was a time when no other organization was even close to “a strong hold” that Gartner has over the technology.
For many years, technology companies, investment lots, and global corporations trusted Gartner for its valuable insights and deep analysis of various market sectors. Probably, Garner is also your organization’s go-to resource for assessing various market trends and outlooks of software.
However, the same is not true for now. Gartner’s long-held position is affected, and the company’s widely known tools, such as “Magic Quadrant,” are not considered to be on top of the merit. Many believe that Gartner is just over-emphasized by the industry and its magic Quadrants are severely misleading. Every organization uses Gartner as a key reference for decision-making just because of its ubiquity.
Since the company’s tools are losing relevance and credibility in various market sectors and subscription costs are the highest, many ask, Is Granter subscription worth it?
The answer cannot be a “Yes” or “No.” You need to critically look at many factors to decide whether a Gartner subscription is really worth it for you or not.
Furthermore, it also depends on how you use or interpret various reports on Gartner. In the end, those extensively researched and reviewed grids are no more than opinions that can be right or wrong. And above all, do you really need its subscription, or are you expecting the highest level of functionality for your company that can be achieved only with eligible and intelligent employees.
To discuss it all and reach a final conclusion, let’s review it in detail:
Why Companies Strive for Good Relationships With Gartner?
A technology company always needs industry analysts to initiate a powerful marketing strategy or product development strategy.
If we look at the past years’ trends, we will know that one company stands out amongst the group for serving powerful analysis i-e, Gartner.
Since the time it went public in 1993, it has been considered the most influential company of all the analysts’ companies for the end-user community. With the revenue of $2 billion, Gartner’s worldwide presence cannot be denied.
It is well known for introducing data center executives, CIOS, and architects to companies with the best solutions to technology challenges. If we look at this service from a technology vendors’ point of view, it is no less than a blessing for them.
An approval by Gartner in the form of a research report can bring utmost credibility and several major revenue opportunities to a preferred technology vendor.
Gartner’s MQ reports the buyers about the pros and cons of the vendors they want to collaborate with and make a purchase. This is why companies strive to have a good relationship with Gartner and secure a good position in Gartner Magic Quadrant (MQ).
Is Gartner Investment Worth It?
The answer to whether Gartner’s investment is worth it or not depends on many factors.
Major field vendors spend a handsome amount on Gartner, though they know how expensive it is. Here are some worth-knowing factors before reaching a final decision.
How does Gartner’s MQ affect the Stock Performance of Vendors?
When the reports are launched, investors straightaway review the Magic Quadrants and make a buying decision before others can do so.
They decide their investment strategy and invest immediately. However, apart from Magic Quadrant, investors also look for the context.
Mainly, their focus is on the next big thing or a company with innovation. Investors read Gartner’s researches, talk to analysts, attend various networking events, and then make their decision.
Several studies reveal that MQ reports affect the stock performance of vendors positively. Vendors witness increased stock prices and favorable ratings. However, the studies were performed privately and reflect that only a good rating positively affects the stock performance, specifically for medium-sized vendors compared to the previous year’s MQ quadrant.
Only an ideal vendor would match that MQ methodology to get the improved or top position and attract more investors.
For large vendors that compete in various MQs, it is pretty challenging to track their coherence with MQ methodology. Because of multiple MQs, their position would be improved in one quadrant, stay the same, or decline in the other. So, it would be difficult to predict how various MQs affect their stock performance.
The most noticeable criticism was to Gartner MQ due to the silent and exclusive methodology.
Gartner’s Magic Quadrant (MQ) is a collection of research reports related to the market built after analyzing proprietary qualitative data that shows market trends, future direction, comparison, and maturity of the market vendors.
Gartner updates MQ every one or two years and includes a visual representation of top vendors in a 2D matrix based on their ability to execute and reach the goal. The evaluated vendors are placed into one of these four quadrants:
4) Niche Players
And the most wanted position is the top right of the MQ matrix.
However, once desired by every company, this position no longer holds the same credibility. The market has now matured enough to understand these details and the inherent problems with Gartner’s MQ approach.
Gartner’s MQ approach is subjective and uses process automation, revenue, operating budget, and client number thresholds as criteria for vendors to be in MQ.
As a result, if the vendor misses any of the set criteria, it is excluded. Although a strict criterion is necessary, it shouldn’t overlook the innovation, quality, applicability of products, customer support, and the customer review about the product and company.
The lack of transparency, arbitrary qualifiers, and the outdated process cannot serve the market well and is never worth the expensive subscription.
Gartner itself boosted about naming automation in its top 10 strategic technology trends of 2020. Other companies converge robotic process automation, AI, machine learning, process discovery, process mining, and analytics as hyper-automation to amplify the automation process, then why is Gartner not practically implementing it? Why are vendors in Gartner’s RPA MQ measured on RPA revenue only and existing technology?
Compared to other analyst firms, Gartner is still counting on old methods to examine the market. It still uses these technologies separately, whereas they should be evaluated in agreement with each other.
Various other firms such as NelsonHall, Zinnov, and Everest have produced vendor reports based on process discovery and process mining under the context of automation.
Business Process Management gave way to robotic process RPA, which includes digital transformation, machine learning, and AI. It should be applied to RPA. If Gartner is still relying on past methods, it cannot be trusted in the future.
High Ratings and Analysis Products
Gartner pretends that vendors’ interest to invest does not affect its rankings. It has created an ombudsman where vendors bring their complaints. Actually, it is a fake office that works to keep the secret of its actual funders?
However, the financial bias that Gartner has towards high payers is pronounced. When new companies start making more money, suddenly they start performing perfectly in Gartner’s MQ. Birst and Snowflake are two noteworthy examples.
Besides ratings, Gartner’s investment can be valuable for its detailed analysis on hot topics in the software industry and new directions and guidelines for hardware, software, and consulting companies. So, its subscription will be effective from a market intelligence point of view.
Benefits to Vendors
How much benefit a vendor can get from Gartner ratings also depends on the vendor’s nature and product.
Vendors interested in improving its ratings with Gartner have to invest time, energy, and money to educate Gartner. Estimated, it costs about $50,000- $100,000 to stay on Gartner’s best position on MQ and other analysis products.
Simply, this amount can be considered as Gartner Tax. The amount that a vendor has to pay is also affected by the number of products of a vendor. Initially, the estimated amount to be paid would be based on one or two products and then goes up with added products. However, the price does not scale up with every new product added. As the cost is not exactly specific to a number of products, we cannot know the exact amount a vendor needs to pay.
1. Benefits to Smaller Vendors
Regarding smaller vendors, they have to look at where they rank and what information buyers and investors get about them. They have no other way except to maintain a good relationship with Gartner to be on the safe side at Gartner’s system of tribute.
In case smaller vendors do not pay, it retaliates and lowers their rankings.
2. Benefits to Larger Vendors
It is not a difficult decision, mainly for large vendors. Companies like Oracle, Microsoft, and SAP are stable enough to spend several million to stay on the top of carts.
Gartner methodologies are designed in such a way that it shows large vendors as the best companies with high values.
It is beneficial for large vendors as it makes them sell even low or immature products. So, even if a product by a large vendor is full of bugs, it will be rated decently by Gartner.
3. Benefits to Medium Vendors
For medium-sized vendors, it is essential to improve or maintain the already attained quadrant position. So, it is worth the cost with Gartner for medium-sized vendors.
Mostly, vendors with international offices and comprehensive software suites best fit to Gartner’s requirements.
Overall, medium-sized vendors do not get as much advantage as large vendors, but they can still get a positive return on investment.
Increasing Subscription Rates
Now that you understand why it is important to have a good working relationship with Gartner let’s look at its subscription charges.
Gartner has always sold its services at premium rates, and the rates have continuously increased as Gartner is the leader among technology analysts.
In the start, it was easy to get in touch with an influential analyst only by being a Gartner client. But things have changed now. Just going for its subscription is not enough to get hands-on with some good analysts.
Moreover, Gartner has changed its rules for the analysts. Time for the individual companies has decreased, and analysts are limited to doing minimal service for base subscription customers.
The average cost of a Gartner subscription is $30,000 for one client plus the additional consulting charges. Usually, this package gives access to standard publications, toolkits, and a restricted number of analyst calls.
So, if you want to get additional advisory assistance, it costs you more.
Say you get advice on negotiation with SAP; it will cost you $100000, which will include a few interactions with analysts and some negotiation reports.
In fact, this is Gartner’s sales strategy to show a lack of effort at the initial level. It uses a lack of effort and value in the initial stages to urge customers to shift to higher-level subscriptions. Only 10-15% of the information is in the reports, and the rest is in the analyst’s head. So, you are given half information that bounds you to pay more for a higher subscription level.
Additional Costs to Hiring Gartner
Several vendors gave their view that getting Gartner’s technology services help them get better rankings. The matter of how much the vendor needs to spend depends on the company’s size, key characteristics, etc.
Additional costs include:
- Vendors’ labor cost to fulfill Gartner’s requirements
- Forms to fill
- Communication with Gartner
This is all done only for the potential that customers will contact the vendors for their better rankings, and they would be able to recover from their sales quickly.
This is all because Gartner still has a dominant position in the IT analyst field, and vendors have to abide by their rules.
You can also participate in Gartner conferences that start around $35,000 for the basic package and rise up in price.
Alternatives to Gartner
To reach a final decision, comparing Gartner to other growing IT analysts firms is also important.
Although Gartner is bigger and has a stronghold, it has several weak points already discussed above. New analyst firms offer independent and curated reviews and bias-free vendor ratings to help the companies better understand the product. Unlike Gartner, other IT analyst firms permit their clients to buy a single article and compare and contrast different reports in a cost-effective way.
The Real Story shows ratings without huge financial bias. Other analyst firms better explain certain software categories than Gartner. Forrester is doing better than Gartner in many aspects.
Bloor Research analysts are more informed, independent, and passionate than Gartner’s analysts.
Apart from IT analyst firms, another useful alternative is academic research. Definitely, it’s not going to tell you about choosing vendor A or B; instead, it will give you an overview of the software categories.
Moreover, the writing intent is totally different for academic research. For analyst firms, IT analysts get the promotion when companies buy or implement a new product. On the other hand, academic researchers need funding to do more research and are not selling any product.
So, the information that you may miss from informational sources, you may get from academic research.
Get Best Out Of Gartner
To get the best out of Gartner’s subscription and time spent with analysts, tell the analyst your high-level requirements and ask for shortlisted vendors for your company. This would help you get straight to the point without wasting time on extra things and leaving critical discussion for the next session and more charges.
If you didn’t come prepared and your requirements were not well-defined, there will be more cost burden as you have to get more analyst’s time. As the full Gartner’s guided vendor’s selection can be very expensive and sometimes unnecessary, we recommend you stick to a high level of requirements.
What Is a Final Decision?
You cannot completely say “No” to Gartner. With many players in the game, Gartner still manages to lead all of them and holds incredible weight in the field. You executives will make big decisions based on Gartner’s expertise. So you need to get some help from Gartner.
Gartner is the preferred and needed source, and to add up further productivity to your decisions, augment it with other IT analysts firms and academic research. You need to read the actual reports rather than just the MQs and then understand the inconsistency between MQ rankings and Gartner’s analysis.
To conclude, instead of just relying on Gartner, you should use the approach of extracting valuable points from different firms. You can also buy a multiple-seat Gartner subscription and use analysts only for software categories.
And before that, always conduct your own research and make your comparison points. Look at which company has the best service; the time vendor has been in business, assessment criteria of the company, etc.
So, following the approach of taking the best from every available source will help you make good decisions and avoid expansive Gartner subscriptions.