How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes


Archived Published: 26 July 2013 ID: G00252457

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Summary

Gartner Magic Quadrants and MarketScopes offer visual summaries and in-depth analyses of the direction and maturity of markets and their vendors. Understanding our research methodologies will help you use these reports to evaluate markets, select the right vendors and manage relationships with them.

Overview

Key Findings

  • Gartner Magic Quadrants and MarketScopes are based on rigorous analysis, backed up by highly structured methodologies.

  • Informed interpretation of a Magic Quadrant or MarketScope is crucial. Only then will you get the most from Gartner's analysis in light of your unique business and technology needs.

Recommendations

  • Read this document to learn how Gartner's Magic Quadrants and MarketScopes can help you evaluate markets and their technology and service providers, and thereby improve your evaluation and investment decisions.

  • Study this document in conjunction with a Magic Quadrant or MarketScope to give context to the analysis.

  • Consult a Magic Quadrant to shorten your list of possible vendors in a particular market, but don't make a decision on this basis alone. Consider scheduling an inquiry session with the Gartner analyst who wrote the Magic Quadrant to gain more details and insight.

  • Consult a MarketScope to understand — at a high level — the strength and potential of a market and to review its key vendors.

Analysis

Assessing a market and its participating vendors is a crucial business task. Vendor differentiation caused by differing sizes, levels of complexity and strategies can make it challenging to compare vendors' offerings. In addition, a market's overall direction is often murky.

Gartner's Magic Quadrants and MarketScopes help overcome these challenges by offering snapshots of markets and their participants. These documents enable you to assess vendors' strengths against your current and future needs.

Distinguish Between Magic Quadrants and MarketScopes

Markets vary in many ways, but all follow a predictable life cycle with five phases:

  • Emergence

  • High growth

  • Consolidation

  • Maturity

  • Decline

A market's current phase helps determine which model — Magic Quadrant or MarketScope — we use to assess it (see Figure 1).

Figure 1. Market Life Cycle
Research image courtesy of Gartner, Inc.

Source: Gartner (July 2013)

A MarketScope rates a market itself and helps organizations evaluate key participating technology and service providers against Gartner's vision for that market. Vendors are rated by criteria that focus on the important aspects of an emerging market where products are less well known or tested, and when it would be difficult to analyze all the criteria typically used in a Magic Quadrant. By focusing on a limited set of criteria for these markets, MarketScopes help you understand their dynamics, as well as the strengths of their vendors.

Magic Quadrants provide a graphical competitive positioning of technology and service providers where market growth is high and provider differentiation is distinct. Magic Quadrants depict markets in the middle phases of their life cycle by using a two-dimensional matrix that evaluates vendors based on their completeness of vision and ability to execute. A Magic Quadrant has 15 weighted criteria that plot vendors based on their relative strengths in a particular market.

Due to the dynamic and fluid nature of high-growth markets, a market moving into the high-growth stage could be the subject of either a MarketScope or a Magic Quadrant. The choice is subject to the analyst's discretion.

Understand Gartner's Qualitative Market Analysis

To evaluate vendors for Magic Quadrants and MarketScopes, Gartner uses a comprehensive process that defines the boundaries of a market, the research focus and the steps taken to form the analysis.

Identification of Market

To be considered for a Magic Quadrant or MarketScope, a market must be distinct and viable. Gartner selects a market for analysis based on the impact of emerging trends and users' requirement to understand changing market dynamics. Gartner analysts focus on markets in which their insights can assist clients with planning, investment decision making and the ongoing support of vendor relationships.

Selection of Vendors

A Magic Quadrant or MarketScope is not intended to be an exhaustive analysis of every vendor in a market, but rather a focused analysis. Inclusion criteria cover market share, revenue, number of clients, types of products or services, target market and other defining characteristics. These criteria help narrow the scope of research to those vendors that Gartner considers to be the most important or best suited to the evolving needs of the majority of buyers in the market.

Consideration is given to vendors that cannot meet the broad Magic Quadrant or MarketScope inclusion criteria. Vendors of particular note are recognized for their ability to meet specific business needs and may be included in an "Honorable Mentions" section.

Definition of Rating Criteria

Magic Quadrants use standard criteria in two categories: ability to execute and completeness of vision (see below).

MarketScopes may use up to seven of these criteria to focus on factors that differentiate a particular market. We then adapt the inclusion criteria to the particular market by prioritizing and weighting them based on a "high," "standard" or "low" scale of importance. In some cases, a criterion may have a "no rating" weight because it is of very low relevance for the market or does not provide sufficient differentiation.

Completeness of Vision

The category includes the following criteria:

  • Market Understanding: The ability of a vendor to understand buyers' needs and translate these needs into products and services. A vendor that shows the highest degree of vision listens to and understands buyers' wants and needs, which it can then shape or enhance with its vision.

  • Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and publicized through an online presence, advertising, customer programs and positioning statements.

  • Sales Strategy: A strategy for selling products that uses an appropriate network of direct and indirect sales, marketing, service and communication affiliates to extend the scope and depth of a vendor's market reach, skills, expertise, technologies, services and customer base.

  • Offering (Product) Strategy: A vendor's approach to product development and delivery that emphasizes differentiation, functions, methodology and feature set in relation to current and future requirements.

  • Business Model: The validity and logic of a vendor's underlying business proposition.

  • Vertical/Industry Strategy: A vendor's strategy to direct resources, skills and offerings to meet the needs of market segments, including industries.

  • Innovation: Marshaling of resources, expertise or capital for competitive advantage, investment, consolidation or defense against acquisition.

  • Geographic Strategy: A vendor's strategy to direct resources, skills and offerings to meet the needs of regions beyond its "home" or native area, directly or through partners, channels and subsidiaries, as appropriate for that region and market.

Ability to Execute

This category includes the following criteria:

  • Product/Service: Core goods and services offered by the vendor that compete in and serve the market. This category includes product and service capabilities, quality, feature sets and skills, offered natively or through original equipment manufacturers, as defined in the Market Definition and detailed in subcriteria.

  • Overall Viability: Includes an assessment of the vendor's overall financial health, the financial and practical success of the relevant business unit, and the likelihood of that business unit continuing to invest in and offer the product within the vendor's product portfolio.

  • Sales Execution/Pricing: The vendor's capabilities in presales activities and the structure that supports them. This criterion includes deal management, pricing and negotiation, presales support and the overall effectiveness of the sales channel.

  • Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers how responsive the vendor has been over time.

  • Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the vendor's message to influence the market, promote its brand and business, increase awareness of its products and services, and establish a positive identification with the product, brand or vendor in the minds of buyers. A combination of publicity, promotions, thought leadership, word of mouth and sales activities can drive this mind share.

  • Customer Experience: Relationships, products, and services and programs that enable clients to succeed with the products evaluated. This criterion includes the ways customers receive technical support or account support. It can also include ancillary tools, customer support programs (and their quality), availability of user groups and service-level agreements.

  • Operations: The vendor's ability to meet its goals and commitments. Factors include the quality of the organizational structure, such as skills, experiences, programs, systems and other vehicles that enable the vendor to operate effectively and efficiently.

Researching of Market

Research activities include, but are not limited to:

  • Holding vendor briefings

  • Conducting surveys

  • Interviewing reference customers identified by the vendors

  • Interacting with industry contacts

  • Discussing pertinent topics with clients

  • Consulting public sources, such as U.S. Securities and Exchange Commission filings, articles, speeches and published papers

  • Seeking input from other Gartner analysts

Evaluation of Vendors

Teams of Gartner analysts collaborate to evaluate and rate each vendor against each of the weighted criteria. The resulting scores are used to generate a Magic Quadrant or MarketScope.

Publication of Research

The Magic Quadrant or MarketScope is published as a research document that explains the vendors' positions and ratings, as well as new developments in the market. As a result, these documents provide a context in which to use the evaluations. Before publication, the research undergoes rigorous internal peer review and validation, as well as a factual review by the vendors included in the Magic Quadrant or MarketScope.

Learn About Gartner Magic Quadrants

The Magic Quadrant graphic has two axes (see Figure 2):

  • Ability to Execute: Summarizes factors such as the vendor's financial viability, market responsiveness, product development, sales channels and customer base.

  • Completeness of Vision: Reflects the vendor's innovation, whether the vendor drives or follows the market, and whether the vendor's view of how the market will develop matches Gartner's perspective.

Figure 2. The Magic Quadrant
Research image courtesy of Gartner, Inc.

Source: Gartner (July 2013)

Understand the Four Quadrants

Vendors positioned in the four quadrants — Leaders, Challengers, Visionaries and Niche Players — share certain characteristics with others in the same quadrant.

Leaders

Leaders provide mature offerings that meet market demand. They have also demonstrated the vision necessary to sustain their market position as requirements evolve. The hallmark of leaders is that they focus and invest in their offerings to the extent that they lead the market and can affect its overall direction. As a result, leaders can be the vendors to watch as you try to understand how new offerings might evolve.

Leaders typically possess a large, satisfied customer base (relative to the size of the market) and enjoy high visibility within the market. Their size and financial strength enable them to remain viable in a challenging economy.

Leaders typically respond to a wide market audience by supporting broad market requirements. However, they may fail to meet the specific needs of vertical markets or other more specialized segments.

Challengers

Challengers have strong ability to execute but may not have a plan that will maintain a strong value proposition for new customers. Large vendors in mature markets may often be positioned as Challengers because they choose to minimize risk or avoid disrupting their customers or their own activities.

Although Challengers typically have significant size and financial resources, they may lack a strong vision, innovation or overall understanding of the market's needs. In some cases, they may offer products nearing the end of their lives that dominate a large but shrinking segment.

Challengers can become Leaders if their vision develops. Over time, large companies may fluctuate between the Challengers and Leaders quadrants as their product cycles and market needs shift.

Visionaries

Visionaries align with Gartner's view of how a market will evolve, but they have less proven capabilities to deliver against that vision. In early markets, this status is normal. In more mature markets, it may reflect the competitive strategy of a smaller vendor — such as selling an innovation ahead of mainstream demand — or of a larger vendor trying to break out of a rut or differentiate itself.

For vendors and customers, Visionaries fall into the higher-risk/higher-reward category. They often introduce new technology, services or business models, but they may need to build financial strength, service and support, and sales and distribution channels.

Whether Visionaries become Challengers or Leaders may depend on whether companies accept their new technologies or whether these vendors can develop partnerships that complement their strengths. Visionaries sometimes make attractive acquisition targets for Leaders and Challengers.

Niche Players

Niche Players do well in a particular segment of a market, or have limited ability to innovate or outperform other vendors in a market as a whole. This may be because they focus on particular functionality or a particular geographic region, or because they are new entrants to the market. Alternatively, they may be struggling to remain relevant in a market that is moving away from them. Niche Players may have reasonably broad functionality, but limited implementation and support capabilities, and relatively small customer bases. They have yet to establish a strong vision for their offerings.

Assessing Niche Players is more challenging than assessing vendors in the other quadrants because some Niche Players could make progress, while others might not execute well or might lack the vision to keep pace with broader market demands.

A Niche Player may be the perfect choice for your requirements. However, even if you like what a Niche Vendor offers, it may prove a risky choice if it is moving against the market's direction, as its long-term viability would be in question.

Use a Magic Quadrant for Your Requirements

Your needs and circumstances should determine how you use a Magic Quadrant, not the other way around. To evaluate vendors in the Leaders quadrant only and ignore those in other quadrants is risky. As a result, Gartner discourages this practice. For example, a vendor in the Niche Players quadrant could offer functions ideally suited to your needs. Similarly, a Leader might not offer functions that meet your requirements — for example, its offerings might cost more than competitors', or it might not support your region or industry.

The positioning of vendors in a Magic Quadrant conveys valuable information about them. For example, if you want to make a strategic investment in a technology, a vendor's viability is crucial. You would therefore weigh a vendor's ability to execute more heavily than its completeness of vision, which means evaluating Challengers before Visionaries. Conversely, if you could gain a competitive advantage by investing in an emerging technology, you would evaluate Visionaries before Challengers.

The overall positioning of vendors in a Magic Quadrant offers a high-level view of the market. In a highly mature market, there may be a preponderance of vendors in the Leaders quadrant as most vendors will tend to offer a complete set of products and services, with little differentiation. By contrast, in an emerging market, most vendors will cluster in the Niche Players quadrant, and most offerings will be incomplete yet distinctive.

Gartner's interactive Magic Quadrant features (available to Gartner clients on gartner.com ) enable you to get additional insight into a market and its vendors. You can use these features to tailor your view of the Magic Quadrant to your business's goals, needs and priorities.

Using the interactive features, you can adjust the weightings applied to each of the evaluation criteria to generate a new, client-specific Magic Quadrant graphic for that market. You can then save and share these customized Magic Quadrants for your internal analysis and decision making. The option to create a client-customized Magic Quadrant graphic is intended to give you relevant insight into a market but does not represent Gartner's view. Client-customized views of the Magic Quadrant are for clients' internal use only and are subject to Gartner's standard usage guidelines.

Learn About Gartner MarketScopes

MarketScopes provide an overall market rating that indicates the strength and potential of a market in general. This is particularly important for emerging markets, where hype is extensive and it is difficult to gauge the long-term viability or evolution of offerings.

In addition to an overall market rating, MarketScopes provide ratings for selected vendors based on market-critical criteria (see Figure 3).

Figure 3. The MarketScope
Research image courtesy of Gartner, Inc.

Source: Gartner (July 2013)

Understand MarketScope Ratings

MarketScope ratings and evaluations are limited to a select set of criteria identified in the research and are not meant to be exhaustive vendor evaluations. The ratings follow Gartner's standard rating format (see Table 1).

Table 1.   MarketScope Rating Framework

Rating

Definition

Strong Positive

Is viewed as a provider of strategic products, services or solutions.

  • Current customers: Continue with planned investments.

  • Potential customers: Consider this vendor a strong choice for strategic investments.

Positive

Demonstrates strength in specific areas, but execution in one or more areas may still be developing or inconsistent with other areas of performance.

  • Current customers: Continue planned investments.

  • Potential customers: Consider this vendor a viable choice for strategic or tactical investments, while planning for known limitations.

Promising

Shows potential in specific areas; however, execution is inconsistent.

  • Current customers: Consider the short- and long-term impacts of possible changes in status.

  • Potential customers: Plan for and be aware of issues and opportunities relating to the evolution and maturity of this vendor.

Caution

Faces challenges in one or more areas.

  • Current customers: Understand challenges in relevant areas, and develop contingency plans based on risk tolerance and possible business impact.

  • Potential customers: Account for the vendor's challenges as part of due diligence.

Strong Negative

Has difficulty responding to problems in multiple areas.

  • Current customers: Execute risk mitigation plans and contingency options.

  • Potential customers: Consider this vendor only for tactical investments with rapid, short-term payback.

Source: Gartner (July 2013)

Use a MarketScope for Your Requirements

A MarketScope can provide a solid definition of a market, illustrate important trends and dynamics that will affect that market's overall strength, and identify crucial criteria that distinguish its market.

Consider how the criteria used to build the MarketScope correspond to your priorities. (Remember that a MarketScope uses fewer criteria than a Magic Quadrant.) Bear in mind that to illustrate market differentiation, we may have excluded criteria that are critical to you. For example, a MarketScope might focus on innovation and market strategy, whereas your priorities might be financial viability and product functions. Consider scheduling an inquiry session with the author of the MarketScope to gain a more detailed understanding of the capabilities of each vendor on your shortlist and how well they match your business needs.

Keep in mind also that the list of vendors is representative, not exhaustive. The exclusion of a vendor from a MarketScope does not imply that it is not viable or not competitive.

Frequently Asked Questions

When does Gartner create a Magic Quadrant, rather than a MarketScope? The lead analyst recommends to his or her Gartner peers which methodology is most appropriate to the market under consideration in light of its growth and maturity. Determining the growth and maturity of a rapidly evolving market is not an exact science. The key market characteristics outlined in this document are all considered and a decision then made by the lead analyst.

Can Magic Quadrants and MarketScopes be used as vendor selection tools? Magic Quadrants and MarketScopes analyze a market and can help you focus your search on important criteria. However, they will not provide all the details needed during a vendor selection process to match a particular vendor to your requirements. Gartner publishes an extensive range of complementary documents, including Critical Capabilities and Vendor Ratings. We also offer an analyst inquiry service that can give you further help with selecting a vendor.

Why aren't all vendors from a market included in a Magic Quadrant or MarketScope? In most cases, it is not possible to cover every vendor in a market — there are too many, or some are irrelevant based on the criteria. Therefore, Gartner focuses its research in a way that will provide the greatest value to Gartner clients.

Does a vendor's status as a Gartner client influence whether it appears in a Magic Quadrant or MarketScope? No. Sales contracts, vendor requests and client engagements do not initiate or influence inclusion in a Magic Quadrant or MarketScope.

What does it mean if a vendor isn't included in a Magic Quadrant or MarketScope? It means that vendor did not meet the inclusion criteria defined for that Magic Quadrant or MarketScope. It does not imply that the vendor is not viable or not competitive. It might indicate that the vendor has a slightly different strategy or functional match, or that it addresses a different target market. We include the inclusion criteria in each Magic Quadrant and MarketScope to help you understand why a vendor might not have been included.

Is a market always analyzed in the same way? No. As a market matures, it changes and so does the analysis. From year to year, the inclusion criteria, weightings and Gartner's opinion about what it takes to maintain strength in a market can change. Each Magic Quadrant and MarketScope includes a detailed description of the market trends and vendor dynamics for that year, and details the vendors added or dropped since the previous report.

Is there a calendar for when Magic Quadrants and MarketScopes will be published? Gartner publishes a calendar of planned Magic Quadrants and MarketScopes on gartner.com .

How often are Magic Quadrants and MarketScopes updated? Gartner typically updates Magic Quadrants and MarketScopes annually. However, some may be refreshed more or less frequently, in response to the dynamic nature of the market concerned.

How can I compare current Magic Quadrants with previous versions? All previous Magic Quadrants are available online as archived files. The interactive Magic Quadrant also shows the history of a specific market, when available. When performing direct comparisons you should understand that the market definition and criteria can change from year to year and that this invariably affects vendors' positions and ratings. Also, due to mergers, acquisitions and rebrandings, some vendors may appear under different names from one year to the next. Vendor and product names are accurate on the date of each Magic Quadrant's publication, but are not maintained or revised to reflect changes in the market after the publication date.

Where can I get more information about the interactive Gartner Magic Quadrant? Interactive Magic Quadrants are available only to Gartner clients on gartner.com . Further information and FAQs about the interactive experience are available from the main Magic Quadrant page .

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© 2013 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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