Bernard: “What skill or insight has allowed AWS to create an offering so superior to others in the market?”
AWS takes a comprehensive view of “what does the customer need”, looks at what customers (whether current customers or future target customers) are struggling with, and tries to address those things. AWS not only takes customer feedback seriously, but it also iterates at shocking speed. And it has been willing to invest massively in engineering. AWS’s engineering organization and the structure of the services themselves allows multiple, parallel teams to work on different aspects of AWS with minimal dependencies on the other teams. AWS had a head start, and with every passing year their engineering lead has grown larger. (Even though they have a significant burden of technical debt from having been first, they’ve also solved problems that competitors haven’t had to yet, due to their sheer scale.)
Many competitors haven’t had the willingness to invest the resources to compete, especially if they think of this business as one that’s primarily about getting a VM fast and that’s all. They’ve failed to understand that this is a software business, where feature velocity matters. You can sometimes manage to put together brilliant, hyper-productive small teams, but this is usually going to get you something that’s wonderful in the scope of what they’ve been able to build, but simply missing the additional capabilities that better-resourced competitors can manage (especially if a competitor can muster both resources and hyper-productivity). There are some awesome smaller companies in this space, though.
Bernard: “Plainly stated, why hasn’t a credible competitor emerged to challenge AWS?”
I think there’s a critical shift happening in the market right now. Three very dangerous competitors are just now entering the market — Microsoft, Google, and VMware. I think the real war for market share is just beginning.
For instance, consider the following, off the cuff, thoughts on those vendors. These are by no means anything more than quick thoughts and not a complete or balanced analysis. I have a forthcoming research note called “Rise of the Cloud IaaS Mega-Vendors” that focuses on this shift in the competitive landscape, and which will profile these four vendors in particular, so stay tuned for more. So, that said:
Microsoft has brand, deep customer relationships, deep technology entrenchment, and a useful story about how all of those pieces are going to fit together, along with a huge army of engineers, and a ton of money and the willingness to spend wherever it gains them a competitive advantage; its weakness is Microsoft’s broader issues as well as the Microsoft-centricity of its story (which is also its strength, of course). Microsoft is likely to expand the market, attracting new customers and use cases to IaaS — including blended PaaS models.
Google has brand, an outstanding engineering team, and unrivaled expertise at operating at scale; its weakness is Google’s usual challenges with traditional businesses (whatever you can say about AWS’s historical struggle with the enterprise, you can say about Google many times over, and it will probably take them at least as long as AWS did to work through that). Google’s share gain will mostly come at the expense of AWS’s base of HPC customers and young start-ups, but it will worm its way into the enterprise via interactive agencies that use its cloud platform; it should have a strong blended PaaS model.
VMware has brand, a strong relationship with IT operations folks, technology it can build on, and a hybrid cloud story to tell; whether or not its enterprise-class technology can scale to global-class clouds remains to be seen, though, along with whether or not it can get its traditional customer base to drive sufficient volume of cloud IaaS. It might expand the market, but it’s likely that much of its share gain will come at the expense of VMware-based “enterprise-class” service providers.
Obviously, it will take these providers some time to build share, and there are other market players who will be involved, including the other providers that are in the market today (and for all of you wondering “what about OpenStack”, I would classify that under the fates of the individual providers who use it). However, if I were to place my bets, it would be on those four at the top of market share, five years from now. They know that this is a software business. They know that innovative capabilities are vitally necessary. And they know that this has turned into a market fixated on developer productivity and business benefits. At least for now, that view is dominating the actual spending in this market.
You can certainly argue that another market outcome should have happened, that users should have chosen differently, or even that users are making poor decisions now that they’ll regret later. That’s an interesting intellectual debate, but at this point, Sisyphus’s rock is rolling rapidly downhill, so anyone who wants to push it back up is going to have an awfully difficult time not getting crushed.
Bernard Golden recently wrote a CIO.com blog post in response to my announcement of Gartner’s 2013 Magic Quadrant for Cloud IaaS. He raised a number of good questions that I thought it would be useful to address. This is part 1 of my response. (See part 2 for more.)
(Broadly, as a matter of Gartner policy, analysts do not debate Magic Quadrant results in public, and so I will note here that I’m talking about the market, and not the MQ itself.)
Bernard: “Why is there such a distance between AWS’s offering and everyone else’s?”
In the Magic Quadrant, we rate not only the offering itself in its current state, but also a whole host of other criteria — the roadmap, the vendor’s track record, marketing, sales, etc. (You can go check out the MQ document itself for those details.) You should read the AWS dot positioning as not just indicating a good offering, but also that AWS has generally built itself into a market juggernaut. (Of course, AWS is still far from perfect, and depending on your needs, other providers might be a better fit.)
But Bernard’s question can be rephrased as, “Why does AWS have so much greater market share than everyone else?”
Two years ago, I wrote two blog posts that are particularly relevant here:
- Common Service Provider Myths About Cloud Infrastructure
- In Cloud IaaS, Developers are the Face of Business Buyers
These posts were followed up wih two research notes (links are Gartner clients only):
- New Entrants to the Cloud IaaS Market Face Tough Competitive Challenges
- How Buyers Purchase Cloud IaaS
I have been beating the “please don’t have contempt for developers” drum for a while now. (I phrase it as “contempt” because it was often very clear that developers were seen as lesser, not real buyers doing real things — merely ignoring developers would have been one thing, but contempt is another.) But it’s taken until this past year before most of the “enterprise class” vendors acknowledged the legitimacy of the power that developers now hold.
Many service providers held tight to the view espoused by their traditional IT operations clientele: AWS was too dangerous, it didn’t have sufficient infrastructure availability, it didn’t perform sufficiently well or with sufficient consistency, it didn’t have enough security, it didn’t have enough manageability, it didn’t have enough governance, it wasn’t based on VMware — and it didn’t look very much like an enterprise’s data center architecture. The viewpoint was that IT operations would continue to control purchases, implementations would be relatively small-scale and would be built on traditional enterprise technologies, and that AWS would never get to the point that they’d satisfy traditional IT operations folks.
What they didn’t count on was the fact that developers, and the business management that they ultimately serve, were going to forge on ahead without them. Or that AWS would steadily improve its service and the way it did business, in order to meet the needs of the traditional enterprise. (My colleagues in GTP — the Gartner division that was Burton Group — do a yearly evaluation of AWS’s suitability for the enterprise, and each year, AWS gets steadily, materially better. Clients: see the latest.)
Today, AWS’s sheer market share speaks for itself. And it is definitely not just single developers with a VM or two, start-ups, or non-mission-critical stuff. Through the incredible amount of inquiry we take at Gartner, we know how cloud IaaS buyers think, source, succeed, and sometimes suffer. And every day at Gartner, we talk to multiple AWS customers (or prospects considering their options, though many have already bought something on the click-through agreement). Most are traditional enterprises of the G2000 variety (including some of the largest companies in the world), but over the last year, AWS has finally cracked the mid-market by working with systems integrator partners. The projected spend levels are clearly increasing dramatically, the use cases are extremely broad, the workloads increasingly have sensitive data and regulatory compliance concerns, and customers are increasingly thinking of AWS as a strategic vendor.
(Now, as my colleagues who cover the traditional data center like to point out, the spend levels are still trivial compared to what these customers are spending on the rest of their data center IT, but I think what’s critical here is the shift in thinking about where they’ll put their money in the future, and their desire to pick a strategic vendor despite how relatively early-stage the market is.)
But put another way — it is not just that AWS advanced its offering, but it convinced the market that this is what they wanted to buy (or at least that it was a better option than the other offerings), despite the sometimes strange offering constructs. They essentially created demand in a new type of buyer — and they effectively defined the category. And because they’re almost always first to market with a feature — or the first to make the market broadly aware of that capability — they force nearly all of their competitors into playing catch-up and me-too.
That doesn’t mean that the IT operations buyer isn’t important, or that there aren’t an array of needs that AWS does not address well. But the vast majority of the dollars spent on cloud IaaS are much more heavily influenced by developer desires than by IT operations concerns — and that means that market share currently favors the providers who appeal to development organizations. That’s an ongoing secular trend — business leaders are currently heavily growth-focused, and therefore demanding lots of applications delivered as quickly as possible, and are willing to spend money and take greater risks in order to obtain greater agility.
This also doesn’t mean that the non-developer-centric service providers aren’t important. Most of them have woken up to the new sourcing pattern, and are trying to respond. But many of them are also older, established organizations, and they can only move so quickly. They also have the comfort of their existing revenue streams, which allow them the luxury of not needing to move so quickly. Many have been able to treat cloud IaaS as an extension of their managed services business. But they’re now facing the threat of systems integrators like Cognizant and Capgemini entering this space, combining application development and application management with managed services on a strategic cloud IaaS provider’s platform — at the moment, normally AWS. Nothing is safe from the broader market shift towards cloud computing.
As always, every individual customer’s situation is different from another’s, and the right thing to do (or the safe, mainstream thing to do) evolves through the years. Gartner is appropriately cautionary when it discusses such things with clients. This is a good time to mention that Magic Quadrant placement is NEVER a good reason to include or exclude a vendor from a short list. You need to choose the vendor that’s right for your use case, and that might be a Niche Player, or even a vendor that’s not on the MQ at all — and even though AWS has the highest overall placement, they might be completely unsuited to your use case.
Gartner’s Magic Quadrant for Cloud Infrastructure as a Service, 2013, has just been released (see the client-only interactive version, or the free reprint). Gartner clients can also consult the related charts, which summarize the offerings, features, and data center locations.
In particular, market momentum has strongly favored Amazon Web Services. Many organizations have now had projects on AWS for several years, even if they hadn’t considered themselves to have “done anything serious” on AWS. Thus, as those organizations get serious about cloud computing, AWS is their incumbent provider — there are relatively few truly greenfield opportunities in cloud IaaS now. Many Gartner clients now actually have multiple incumbent providers (the most common combination is AWS and Terremark), but nearly all such customers tell us that the balance of new projects are going to AWS, not the other providers.
Little by little, AWS has systematically addressed the barriers to “mainstream”, enterprise adoption. While it’s still far from everything that it could be, and it has some specific and significant weaknesses, that steady improvement over the last couple of years has brought it to the “good enough” point. While we saw much stronger momentum for AWS than other providers in 2012, 2013 has really been a tipping point. We still hear plenty of interest in competitors, but AWS is overwhelmingly the dominant vendor.
At the same time, many vendors have developed relatively solid core offerings. That means that the number of differentiators in the market has decreased, as many features become common “table stakes” features that everyone has. It means that most offerings from major vendors are now fairly decent, but only a few are really stand out for their capabilities.
That leads to an unusual Magic Quadrant, in which the relative strength of AWS in both Vision and Execution essentially forces the whole quadrant graphic to rescale. (To build an MQ, analysts score providers relative to each other, on all of the formal evaluation criteria, and the MQ tool automatically plots the graphic; there is no manual adjustment of placements.) That leaves you with centralized compression of all of the other vendors, with AWS hanging out in the upper right-hand corner.
Note that a Magic Quadrant is an evaluation of a vendor in the market; the actually offering itself is only a portion of the overall score. I’ll be publishing a Critical Capabilities research note in the near future that evaluates one specific public cloud IaaS offering from each of these vendors, against its suitability for a set of specific use cases. My colleagues Kyle Hilgendorf and Chris Gaun have also been publishing extremely detailed technical evaluations of individual offerings — AWS, Rackspace, and Azure, so far.
A Magic Quadrant is a tremendous amount of work — for the vendors as well as for the analyst team (and our extended community of peers within Gartner, who review and comment on our findings). Thanks to everyone involved. I know this year’s placements came as disappointments to many vendors, despite the tremendous hard work that they put into their offerings and business in this past year, but I think the new MQ iteration reflects the cold reality of a market that is highly competitive and is becoming even more so.
If you’re a service provider interested in participating in the Cloud IaaS Magic Quadrant process (see the call for vendors), I’d like to recommend a number of my previous blog posts.
Foundational Gartner research notes on cloud IaaS. Recommended reading to understand our thinking on the market.
Having cloud-enabled technology != Having a cloud. Critical for understanding what we do and don’t consider cloud IaaS to be.
AR contacts for a Magic Quadrant should read everything. An explanation of why it’s critical to read every word of every communication received during the MQ process.
The process of a Magic Quadrant. Understanding a little bit about how MQs get put together.
Vendors, Magic Quadrants, and client status. Appropriate use of communications channels during the MQ process.
The art of the customer reference. Tips on how to choose reference customers.
It’s that time of the year again, a little bit early — we’re trying to refresh the Cloud IaaS Magic Quadrant on a nine-month cycle rather than a yearly cycle, reflecting the faster pace of the market.
A pre-qualification survey, intended to gather quantitative metrics and information about each provider’s service, will be going out very soon.
If you are a cloud IaaS provider, and you did not receive the 2012 survey, and you would like to receive the 2013 survey, please email Michele dot Severance at Gartner dot com to request to be added to the contact list. You must be authorized to speak for your company. Please note we cannot work with PR firms for the Magic Quadrant; if you are a PR agency and you think that your client should be participating, you should get in touch with your client and have your client contact Michele.
If you did receive the 2012 survey, you should be receiving email from Michele within the next few days, requesting that you confirm that you’re the right contact or passing it on to the correct contact to do so.
If you’re unsure whether you’re a cloud IaaS provider by this MQ’s definitions, consider the following:
- Are you selling a service? (That means you’re not selling hardware or software.)
- Are you offering compute, storage, and network resources? (You can’t be, say, just a cloud storage provider.)
- Is your offering fully standardized? (It’s identical for every customer, not a reference architecture that you customize.)
- Can customers self-service? (Once approved as customers, they can go to your portal and push buttons to immediately, with zero human intervention, obtain/destroy/configure/manage their infrastructure resources. Managed services can be optional.)
- Can you meter by the hour? (You can either sell by the hour, or you can offer monthly capacity where usage is metered hourly. Having to take a VM for a full month is hosting, not IaaS.)
- Do you have at least one multi-tenant cloud IaaS offering? (Customers must share a capacity pool for the offering to be considered multi-tenant.)
- Do you consider your competition to be offerings such as Amazon EC2, Verizon Terremark’s Enterprise Cloud, or CSC’s CloudCompute? (If not, you’re probaly confused about what cloud IaaS is.)
Please note that receiving a survey does not in any way indicate that we believe that your company is likely to qualify; we simply allow surveys to go to all interested parties (assuming that theyâre not obviously wrong fits, like software companies without an IaaS offering).
The status for this Magic Quadrant will be periodically updated on its status page.
Gartner will soon be starting the process of updating our Magic Quadrant for Managed Hosting, currently targeted for publication in Q1 of 2013. This is the update to the Magic Quadrant for Managed Hosting that was published in March 2012 of this year; a free reprint is available. If you consider yourself to be an enterprise-class managed hosting provider, capable of providing fully-managed services for complex, mission-critical websites, this is your Magic Quadrant. (Note that this is a distinct market from data center outsourcing.)
The previous Magic Quadrant was global. However, because regional requirements differ, and many excellent managed hosting providers are not global, we have decided to replace the global Magic Quadrant with three regional Magic Quadrants — one each for North America, Pan-Europe, and Asia-Pacific, published in that order. Each MQ will have its own inclusion criteria and evaluation criteria.
I will be leading the overall global effort, and Gartner’s analysts that cover Managed Hosting will be doing these MQs as a global team, although each regional MQ will have a region-specific lead author. We are going to do a single global data collection effort and set of briefings, though, to reduce the level of effort needed by the service provider AR teams.
Doug Toombs will be the lead author for the North American MQ and will be assisting me in running the global effort. If you are not already following his blog or his Twitter (@DougToombs), I strongly encourage you to do so.
We will imminently be kicking off the process for this set of MQs. If you were not on last year’s Magic Quadrant for Managed Hosting, and you would like to receive a pre-qualification survey, please contact Doug Toombs at Douglas dot Toombs at Gartner dot com. Please note that we allow any service provider to participate in the survey process; reception of a survey does not indicate in any way that we feel that your company is qualified to be in the MQ.
Many people confuse “using a hardware and software stack that potentially enables a cloud” with “cloud infrastructure as a service”. Analyst firms haven’t necessarily done a good job with drawing the distinction, either — there are plenty of (hopefully non-Gartner) analysts who use “IaaS” interchangeably to describe the technology stack and the service itself.
The technology stack — typically an integrated system (such as a Vblock) plus a cloud management platform (such as vCloud Director), although it could be anything, like whitebox servers + Nexenta storage + Arista switches + OpenStack — is what Gartner is now dubbing “cloud-enabled system infrastructure” (CESI). This is admittedly naming-by-committee, but it parallels our use of “cloud-enabled application platform” which is the technology-stack corollary for PaaS.
Why is it important to make a distinction between CESI and IaaS? Because while CESI can be used to deliver IaaS, there are many services that can be delivered on top of a CESI that are not IaaS. Gartner’s cloud definitions are pretty strict, and one of the cores of our IaaS definition is that IaaS is self-service — you can optionally layer managed services on top, but the customer has to have full control to obtain and remove resources in a fully self-service, fully-automated way. Not only are many of the services that can be delivered on CESI not IaaS, they’re not actually cloud services — cloud requires not only self-service, but also scalability, elasticity, and metering by use, for instance.
Why does this distinction matter? Because there are a significant number of service providers in the market today who offer a service on top of a CESI and call it “cloud IaaS”, when it’s neither cloud nor IaaS, and it misleads customers into thinking that they are getting the technical and/or business benefits of going to the cloud and going to IaaS.
I’ve written two research notes that I’m hoping will cut through some of the market confusion. (Links are Gartner clients only, sorry.)
The first, Technology Overview for Cloud-Enabled System Infrastructure, is an overview of how we define CESI and how it is not merely a virtualization environment — it encompasses compute, storage, and network capabilities; it is automated, scalable, elastic, near-real-time on-demand; and it exposes self-service interfaces. It discusses the range of cloud-enabled infrastructure services from those that are merely cloud-facilitated (using the CESI as an efficient infrastructure platform, without exposing it to the customer via self-service), to those that are fully cloud-native (CESI fully exposed to customer via self-service that is routinely used), and gives examples of the services along this spectrum; for instance, IBM’s SCE+ is cloud-enabled data center outsourcing, not IaaS, in our parlance. Finally, it disusses the distinction between global-class CESI architectures (think Amazon Web Services) and enterprise-class architectures (think Vblock + vCD), and how to build a CESI.
The second, Don’t Be Fooled By Offerings Falsely Masquerading as Cloud Infrastructure as a Service, is a note that is intended to help IT buyers figure out what they’re really buying when they are assessing something that the vendor is claiming is IaaS. It focuses on a handful of principles: Beware of common “cloudwashing” claims; ensure that what you’re buying delivers promised technical and business benefits; identify your requirements and look at competing providers before purchasing a solution that requires a contractual commitment; favor providers who have better cloud infrastructure roadmaps.
The four most common “cloudwashing” claims for infrastructure services:
- “It uses virtualization, so it’s a cloud.”
- “It’s being delivered on a Vblock, so it’s a cloud.”
- “We use vCloud Director, so it’s a cloud.”
- “You can buy it through a portal, so it’s a cloud.”
I apologize for introducing more jargon into an already jargon-heavy corner of the market, but I think these distinctions are critical: You can have a technology stack that potentially enables you to deliver cloud IaaS… and use it to deliver something that is neither cloud nor IaaS. Cloud infrastructure as a technology platform is separate and distinct from cloud infrastructure as a service; the technical construct and the service construct are two different things.
I’ve been reading the social media reactions to my recent note on OpenStack, “Don’t Let OpenStack Hype Distort Your Selection of a Cloud Management Platform in 2012” (that’s a client link; a free public reprint without the executive summary is also available), and wanted to respond to some comments that are more centered on the research process and publication process than on the report itself. So, here are a number of general assertions:
Gartner doesn’t do commissioned research. Ever. Repeat: Gartner, unlike almost every other analyst firm, doesn’t do commissioned resesarch — ever. Most analyst firms will do “joint research” or “commissioned whitepapers” or the like — research where a vendor is paying for the note to be written. About a decade ago, Gartner stopped this practice, because management felt it could be seen as compromising neutrality. No vendor paid for that OpenStack note to be written, directly or indirectly. Considering that most of the world’s largest IT vendors are significant participants in OpenStack, and plenty of small ones are as well, and a bunch of them are undoubtedly unhappy about the publication of that note, if Gartner’s interests were oriented around vendors, we certainly wouldn’t have published research practically guaranteed to upset a lot of vendors.
Gartner earns the overwhelming majority of its revenue from IT buyers. About 80% of Gartner’s revenues come from our IT buyer clients (we call them “end-users”). We don’t shill for vendors, ever, because our bread-and-butter comes from IT buyers, who trust us for neutral advice. Analysts are interested in helping our end-user clients make the technology decisions that are best for their business. We also want to help vendors (including those who are involved with free or commercial open-source) succeed in better serving end-users — which often means that we will be critical of vendor efforts. Our clients are asking about OpenStack, and every example of hype in that note comes directly from client interactions. I wrote that note because the volume of OpenStack queries from clients was ramping up, and we needed written research to address it.
Gartner analysts are not compensated on commissions of any sort. Many other analyst firms have incentives for analysts that are tied to revenue or publicity — be quoted in the press X times, sell reports, sell consulting, sell strategy days with vendors, etc. Gartner doesn’t do any of that, and hasn’t for about a decade. Our job, as Gartner analysts, is to try to offer the best advice we can to our clients. Sometimes, of course, we will be wrong, but we try hard. It’s not an academic exercise; our end-user clients have business outcomes that ride on their technology decisions.
Gartner doesn’t dislike open source. As a collective entity, Gartner tends to be cautious in its stances, as our end-user clients tend to be mid-market and enterprise IT executives who are fairly risk-averse; our analysis of all solutions, including OSS, tends to be from that perspective. But we write extensively about open source; we have analysts devoted to the topic, plus everyone covers the OSS relevant to their own coverage. We consider OSS a business strategy like anything else. In fact, we’ve been particularly vocal about how we feel that cloud is driving OSS adoption across a broad spectrum of solutions, and advocates that an IT organization’s adoption of cloud is a great time to consider replacing proprietary tech with OSS. (You’ll note that a whole section of the report predicts OpenStack’s eventual success, by the way, so it’s not like this a prediction of doom, just an observation of present stumbling-blocks on the road to maturity.)
Gartner research notes are Gartner opinion, not an individual analyst’s opinion. Everything that Gartner publishes as a research note (excluding things like blog posts, which we consider off-the-clock, personal time and not a corporate activity) undergoes a peer review process. While notes do slip through the cracks (i.e., get published without sufficiently broad or deep review), our internal processes require analysts to get review from everyone who touches a coverage area. My OpenStack note was very broadly peer reviewed — by other analysts who cover cloud infrastructure, cloud management platforms, and open source software, as well as a bunch of related areas that OpenStack touches. (As a result of that review, the original note almost quadrupled in size, split into one note on OSS CMPs in general, and one note on OpenStack itself.) I also asked for our Ombudsman’s office, which deals with vendor complaints, to review the note to make sure that it seemed fair, balanced, and free of inflammatory language, and they (and my manager) also asked questions about potentially controversial sections, in order to ensure they were backed by facts. Among other things, these processes are intended to ensure that individual analyst bias is eliminated to as large an extent as possible. That process is part of why Gartner’s opinions often sound highly conservative, but when we take a stance, it is usually neither casual nor one analyst’s opinion.
The publication of this note was not a shock to the vendors involved. Most of the vendors were aware that this note was coming; it was a work in progress over the summer. Rackspace, as the owner of OpenStack at the time that this was placed in the publication pipeline, was entitled to a formal review and discussion prior to its publication (as we do for any research that covers a vendor’s product in a substantive way). I had spoken to many of the other vendors in advance of its publication, letting them know it was coming (although since it was pre-Foundation they did not have advance review). The evolving OpenStack opinions of myself and other Gartner analysts have long been known to the vendors.
It would have been easier not to write anything. I have been closely following OpenStack since its inception, and I have worked with many of the OpenStack vendors since the early days of the project. I have a genuine interest in seeing them, and OpenStack, succeed, and I hope that the people that I and other analysts have dealt with know that. Many individuals have confided in me, and other Gartner analysts, about the difficulties they were having with the OpenStack effort. We value these relationships, and the trust they represent, and we want to see these people and their companies succeed. I was acutely careful to not betray any individual confidences when writing that report, ensuring that any concerns surfaced by the vendors had been said by multiple people and organizations, so that there would be no tracebacks. I am aware, however, that I aired everyone’s collective dirty laundry in public. I hope that making the conversation public will help the community rally around some collective goals that will make OpenStack mainstream adoption possible. (I think Rackspace’s open letter implicitly acknowledges the issues that I raised, and I highly encourage paying attention to its principles.)
You will see other Gartner analysts be more active in OpenStack coverage. I originally picked up OpenStack coverage because I have covered Rackspace for the last decade, and in its early days it was mostly a CMP for service providers. Enterprise adoption has begun, and so its primary home for coverage is going to be our CMP analysts (folks like Alessandro Perilli, Donna Scott, and Ronni Colville), although those of us who cover cloud IaaS (especially myself, Kyle Hilgendorf, and Doug Toombs) will continue to provide coverage from a service provider perspective. Indeed, our coverage of OSS CMPs (CloudStack, Eucalyptus, OpenNebula, etc.) has been ramping up substantially of late. We’re early in the market, and you can expect to see us track the maturation of these solutions.
I’m writing this blog post for vendors who are in Magic Quadrants or who are hoping to be in Magic Quadrants, as well as the Gartner account executives (AEs) who have such vendors as clients and prospects. It’s in lieu of having to send an email blast to a lot of people; since it’s more generic than just my own Magic Quadrants, here it is for the world.
So, to sum up:
Whether or not a vendor is a Gartner client has no bearing on whether they are on a Magic Quadrant, or how they are rated. Vendors should therefore refrain from attempting to use pressure tactics on Gartner AEs, and Gartner AEs should be careful to avoid even the appearance of impropriety in dealing with vendors in a Magic Quadrant context. Vendors should conduct Magic Quadrant communications directly, using the contact information they were given.
And here’s the deeper dive:
Vendors, you’ve been given contact info for a reason. Please use it. As part of the process, every vendor being considered for an MQ is given points of contact — generally an admin coordinator as well as one or more of the analysts involved in the MQ. You’re told who you should go to if you have questions or issues — often the coordinator, lead analyst, or some specific analyst designated as your point of contact (POC). You should communicate directly with the POC. Do not go through your Gartner AE, other analysts that you deal with, or otherwise attempt to have a third party relay your concerns. Also, communicate via the contact you designated as the responsible party within your organization; we cannot, for instance, work with your PR firm. Gartner has a strict process that governs MQ-related communications; we ask that you do this so that we can ensure that all conversations are documented, and that your message is clearly and directly heard.
Yes, we mean it. Please contact us with questions and issues. If you’ve read everything available to you (the official communications, the Gartner documentation on how MQs work, any URLs you were given, and so on), and it doesn’t answer your question, please reach out to us. If you have an issue, please let us know. The analyst is the authoritative source. Anything you hear from anyone else isn’t. Gartner AEs don’t have any kind of privileged knowledge about the process, so don’t depend on them for information.
A vendor’s client relationship is of no relevance. The analysts do not care if a vendor is a client, how big of a client they are, whether they’re going to buy reprints if they get a certain placement, will become a client if they’re included on the MQ, or about any other attempt to throw their weight around. Vendors who try to do so are likely to be laughed at. Gartner AEs who try to advocate on behalf of their clients will annoy the analyst, and if it doesn’t cease, strongly risk having the analyst complain about them to the Ombudsman. In general, analysts prefer not to even know about what issues an AE might be having that may in some way be impacted by the MQ. It may even backfire, as the analyst’s desire to avoid any appearance of impropriety may lead to much closer scrutiny of any positive statements made about that vendor.
In short: Vendors shouldn’t try to go through Gartner Sales to communicate with the analysts involved in a Magic Quadrant. The right way to do this is direct, via the designated contacts. I know it’s natural to go to someone whom you may feel is better able to plead your case or tell you how they think you can best deal with the analyst, but please avoid the urge, unless you really just want a sounding board and not a relay. If you want to talk, get in touch.
This is part 2 of a two-part post. The first part contains general tips for Magic Quadrant briefings, applicable to any vendor regardless of how much contact they’ve had with the analyst. This second part divides the tips by that level of contact.
Richard Stiennon’s UP and to the RIGHT, which provides advice about the Magic Quadrants, stresses that preparation for this process is really a continuous thing — not a massive effort that’s just focused upon the evaluation period itself. I agree very strongly with that advice.
Nevertheless, even AR professionals — indeed, even AR professionals who are part of big teams at big vendors — often don’t do that long-term prep work. Consequently, there are really three types of vendors that enter into this process — vendors that the analyst is already deeply familiar with and where the vendor and analyst maintain regular contact (no client relationship necessary, can just be through briefings), vendors that the analyst has had some contact with but doesn’t speak to regularly, and vendors that the analyst doesn’t really know.
Tips for Vendors the Analyst is in Frequent Contact With
In general, if you have regular contact with the analyst — at least once, if not several times, a quarter — a briefing like this shouldn’t contain any surprises. It’s an opportunity to pull everything together in a unified way and back up your statements with data — to turn what might have been a disjointed set of updates and conversations, over the course of a year, into one unified picture.
Hit the highlights. Use the beginning of the briefing as a way to summarize your accomplishments over the course of the year, and refresh the analyst’s memory on things you consider particularly important. You may want to lay out your achievements in a quarter-by-quarter way in the slide deck, for easy reference.
Provide information that hasn’t been covered in previous briefings. Make sure you remember to mention your general corporate achievements. Customer satisfaction, changes to your channel and partnership model, financial accomplishments, and other general initiatives are examples of things you might want to touch on.
Focus on the future. Lay out where you see your business going. If you can do so on a quarter-by-quarter basis (which you may want to stipulate is under an NDA), do so.
Tips for Vendors the Analyst Knows, Without Frequent Contact
If the analyst knows you pretty well, but you haven’t been in regular contact — the analyst hasn’t gotten consistently briefed on updates, or been asked for input on future plans — not only do you want to present the big picture, but you want to make sure that they haven’t missed anything. Your briefing is going to look much like the briefing of a vendor who has been in frequent contact, but with a couple of additional points:
Tell a clear story. When you go through the highlights of your year, explain how what you’ve done and what you’re planning fits into a coherent vision of the market, where you see yourself going, and how it contributes to your unique value proposition.
Have plenty of supplemental material. Because the analyst might not have seen all the announcements, it’s particularly important that you ensure that your slide deck has an appendix that summarizes everything. Link to the press release or more detailed product description, if need be.
Tips for Vendors the Analyst Doesn’t Really Know
Sometimes, you just won’t know the analyst very well. Maybe you’re a new vendor to the space, or previously been too small to draw attention from the analyst. Maybe this space isn’t a big focus for you. Maybe you’ve briefed the analyst once a year or so, but don’t really stay in touch. Whatever the case, the analyst doesn’t know you well, and therefore you’re going to spend your briefing building a case from the ground up.
Clearly articulate who you are. Start the briefing with your elevator pitch. This is your business and differentiation in a handful of sentences that occupy less than two minutes. The analyst is trying to figure out how to summarize you in a nutshell. Your best chance of controlling that message is to (credibly) assert a summary yourself. Put your company history and salient facts on an appendix to the slides, for later perusal. Up front, just have your core pitch and any metrics that support it.
Pare your story to the bare essentials. Spend the most time talking about whatever it is that is your differentiation. (Example: If you know your product isn’t significantly differentiated but for whatever reason they love you in emerging markets, sweep through describing your product by comparing it to a common baseline in your market, and conceding that’s not where you differentiate, then focus on your emerging markets story in detail.) If your differentiation is in your product/service and not in your general business, focus on that — you can assume the analyst knows what the common baseline is, so you can gloss over that baseline in a few sentences (you can have more detail on your slides if need be) and then move on to talking about how you’re unique.
Be customer-centric. Explain the profile of your customers and their use cases, and make it clear why they typically choose you. Resist the urge to focus on brand-name logos, especially if those aren’t typical or aren’t your normal use case. Logo slides are nice, but they’re even better if the logos are divided by use case or some other organizing function that makes it clear what won you the deal.
Ensure you talk about your go-to-market strategy. Specifically, explain how you sell and market your product/service. Even if this isn’t especially exciting, spend at least a slide talking about how you’re creating market awareness of your company and product/service, and how you actually get it into the hands of prospects and win those deals.
Provide a deep appendix to your slide deck. You should feel free to put as much supplemental material as you think would be useful into an appendix or separate slide deck for the analyst’s later perusal. Everything from executive bios to a deep dive on your product can go here. If it’s in your presentation for investors, or part of your standard pitch to customers, it can probably go in the deck.