Netscout and Gartner have scheduled their trial for next July. The case stands little chance of improving Netscout’s value. It does, however, risk harming the reputation of both analyst firms and analyst relations professionals.
Over the last weeks, pressure has mounted on Netscout’s lawyers. Netscout claims Gartner’s Magic Quadrant harmed its enterprise sales and that the truth of Gartner’s statements is not relevant. Its advocates are aiming to slow, reduce and restrict Gartner’s access to documents that give other opinions on Netscout’s position at the time of the research. With a settlement now less likely, the jury selection is scheduled for July 2017.
Even at this stage, the case can be expected to be involved and expensive. Lawyers have filed hundreds of documents. Gartner has pressed for the extensive discovery of materials, including from external parties such as Danaher Corporation, which was involved in due diligence, and The Skills Connection, which the court has compelled to testify about its advising Netscout on the Magic Quadrant process.
Netscout is raising arguments that many analyst relations professionals will know.
- – Buyers use analyst research, and some customers might look less favorably at firms that are less well rated.
- – Gartner does not follow journalistic standards in avoiding conflicts of interests.
However, some of its claims seem outlandish to me. It claims:
- – the contents of Gartner’s Magic Quadrant reports are related to payments Gartner receives from vendors,
- – Gartner’s employee compensation biases analysts towards providers that purchase more Gartner services, and
- – Gartner’s conflicts of interest likely led its researchers to abandon consistent and repeatable methodologies
Conflicts of interests are a practical issue in the analyst industry. Analysts should be disinterested in which firms are clients. The exchange of information between sales and research should be limited. However, the analogy with journalism fails.
Analysts and journalists are equally consistent at not accepting valuable gifts, and it is as hard to imagine a Gartner analyst receiving a personal payment from a vendor, or in-and-out trading in the shares of the firms they cover, as it is a journalist. However, analyst firms cannot easily follow rules made for individual journalists. In this respect, the relationship between analyst firms and vendors is perhaps more like the relationships between publications and advertisers. Gartner analysts might accept vendors’ hospitality while gathering research, consult to providers, conduct due diligence and speak at suppliers’ events. However, these fees go to Gartner, not the analyst.
One other way in which the comparison with journalistic ethics fails is the demand for neutrality. Journalists, for example, might be expected to conceal political partisanship, not to lead or solicit funds for community organizations, and to restrict their public comments to what might be allowed in their paper. We do not have that expectation of analysts; nor do we expect their coverage of the markets to be neutral. They are experts in their markets, and they exist because they can offer recommendations.
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