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Gartner’s Magic Quadrant for Managed Hosting Explained

Posted by QuoteColo on November 21, 2014

Gartner’s Magic Quadrant for Managed Hosting Explained

Gartner’s Magic Quadrant is a market research report put out by the research and advisory firm Gartner. The goal of their reports is to offer a full analysis into the market, which they feel helps to highlight the direction it is going for all of the companies involved that are a focus of the research. They typically update their report annually, or every two years, based on the area of research. One such area that they cover extensively is managed hosting.

Understanding the Ratings Better

Trying to understand everything that Gartner’s Magic Quadrant considers when they are researching managed hosting providers can be complex, mostly because they are not forthcoming about the details of their system. They rate the companies offering these services on their ability to execute, as well as the completeness of their vision. The actual methods of how they come to their conclusions, or their methodology, are something that Gartner does not disclose. The scores Gartner provides then rank the companies in one of four different categories – leaders, challengers, visionaries, and niche players.

They tend to place companies into the Leader category that are able to score well on both of the above criteria. Most of the time, these tend to be larger businesses with more experience, as well as more money. Those companies placed in the Challengers tier tend to do well on their ability to execute, but score lower on completeness of vision. These tend to be large companies, but they do not always have plans, at least not solid plans, for the future.

Companies they roll into the Visionaries category are those who have a full and complete vision, but they have a diminished capability to execute. They tend to be smaller companies. Those that fall into the Niche category in Gartner’s Magic Quadrant score lower on both of the abilities, and they are generally newcomers to the field. The hope for those companies is that when Gartner evaluates them in the future, they are at a much higher overall level.

Criticisms With the System

Of course, as with any type of ratings system, it does have a number of detractors and those who feel that it is not always an accurate reflection of the company. Some claim that the Magic Quadrant is more for investors than it is for buyers. People who criticize the system also say that there is simply not enough disclosure when it comes to the money the company receives from the vendors they are rating. This makes it clear that in some cases, there could well be a conflict of interest at play.

As mentioned, there is also no disclosure when it comes to the exact methodology that Gartner uses for their system, and this causes some to raise eyebrows. Gartner has actually been the subject of a federal lawsuit when a company called ZL Technologies challenged whether they were legitimately ranking companies. Gartner argued that they put pure opinion into the reports, and since opinion does not rely on fact, the First Amendment protects them. The court threw out the case.

Regardless of how companies feel about Gartner’s Magic Quadrant, it is still important and it is something that the industry and investors consider. Managed hosting companies should certainly keep an eye on the rankings as well as where they fall within them.

What Do You Think?