Sunday, October 11, 2009

Gartner: stifling innovation

I recently came across a (not so new) Gartner Magic Quadrant report, which reminded me why some analysts just don’t get it in my mind. I have removed any identifying information, but basically this is what the report says:

Niche vendors are offering new technology in the market…These vendors include risk aspects such as small reference bases and vendor capitalization issues. Organizations that embrace a higher level of risk should seek compensation in the form of discount, and even extended pilot implementations with below-average prices for support during the pilot period.

Gartner prides itself on serving the user community, so what’s wrong with this statement?

The problem I have with this statement is that it represents short-term, narrow-guided thinking. It is understood that not every organization is willing to trust a solution that has a limited track record of success. That’s fine. But at the end of the day, we all need innovation, even the laggards. If you don’t have the stomach to adopt a new solution, that’s absolutely legitimate. But if you are willing to take the risk of new technology in anticipation of bigger rewards and an early adopter advantage, please don’t try to squeeze an innovator (in many cases a cash-strapped startup) for a few less dollars. Remember, you want this vendor to be successful, right?

What Gartner says here promotes the notion that vendors such as Microsoft, Oracle, and SAP should be able to charge a premium for their track record (which is rather dubious in many cases), while startups that may have a better solution should settle for lower margins or even a loss. This attitude only encourages market stagnation, which doesn’t serve anyone except the incumbents.

So, my call to the Gartner and other analysts is: your job is to help your clients understand the solution landscape, not to shape it! Telling clients to squeeze new vendors on pricing is bad service to the industry and bad service to your clients.

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