ZL vs. Gartner: If At First You Don’t Succeed, Try, Try Again

As previously covered, email archiving vendor ZL Technologies of San Jose, California sued leading IT market researcher Gartner for $132M earlier this year for its treatment in one of Gartner’s vaunted magic quadrants.

On November 4th, the case was dismissed, but have no worries. Armed with a seemingly endless legal budget and apparent certainty in its position, ZL is back at it. One month later, on 12/4/09, ZL filed an amended complaint (PDF) in US District Court of Northern California, naming both Gartner as well as the lead analyst for email archiving, Carolyn DiCenzo, as defendants.

After a quick read, it appears primarily to be more of the same story, just better and more clearly argued.

They assert that:

  • ZL has superior products and services
  • Gartner dominates IT research with make-or-break power over vendors
  • Placement in the niche vendor quadrant is basically a fate worse than death
  • Gartner’s marketing creates the impression that analyst statements and reports are facts rather than opinion. Recall that freedom of opinion was Gartner’s defense, so this claim strikes me as pivotal.
  • Gartner’s business model contains an inherent conflict of interest and therefore its reviews are not unbiased third-party opinions
  • Gartner labeled ZL a “niche player” every year from 2005-2009. (Ouch. Now we see where the anger comes from!)
  • Magic quadrants are not based on objective, verifiable fact but on subjective opinion. (Here ZL seems to be arguing against itself. As I understand the law, we are all entitled to our opinions and we have the right to be wrong. What we can’t do is assert known falsity as truth — that’s defamation. But if the magic quadrants are opinion, then Gartner’s allowed to be wrong.)

English majors will enjoy some of the language used later in the document — I’m mixing and matching some words and phrases just to show the language:

… statements were false, malicious, fraudulent, oppressive, vile, base, contemptible … made with malice, hatred, ill-will, improper and malevolent purpose, reckless disregard, and knowledge of falsity … exposed ZL to hatred, contempt, ridicule, and obloquy

OK. What the heck is obloquy?

Part of me likes this offbeat little company trying to buck the system. Gartner is very influential, no doubt. As someone who’s worked with analysts for 20 years, I can say they’re not always the easiest people with whom to work. Discussions about magic quadrants (and imitations thereof) and the factors that drive them can be frustrating. But every company, including Gartner, has its flaws and every industry has its movie critics.

So a bigger part of me thinks that ZL’s just plain nuts. They are breaking glass all around them and spending real money to do it. If their software really is as good as they claim, then if they’d simply done a better job at marketing then they probably could have avoided all of this.

Because — and I agree with Gartner here — the best product / technology doesn’t always win. It takes a great business, too. And suing Gartner is, frankly, not something that I’ve seen many great businesses do.

Put differently, you can catch more flies with honey than vinegar. And ZL is dropping vinegar on Gartner right now like a helicopter dropping water on a forest fire.

For those who enjoy reading source documents, I’ve embedded the complaint below.

ZLFirst Amended Complaint

One response to “ZL vs. Gartner: If At First You Don’t Succeed, Try, Try Again

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