The 2014 Gartner Magic Quadrant for CPM. How to decipher the dots.

Each year Gartner releases the latest Magic Quadrant for CPM Suites. Vendors are grouped into one of four quadrants but what does that really mean? It is a debate that vendors have been having with Gartner since the Magic Quadrant was first introduced and is still debated today.

 

Connecting the dots

Let me provide my opinion (which is not endorsed by Gartner in any way, shape or form) of the characteristics of the vendors in each quadrant. As an executive for a CPM vendor and former Analyst I am both experienced and biased in my opinions about the Magic Quadrant. But even with some bias I think my logic can help those less exposed to the Magic Quadrant vendor evaluation process to decipher the code for vendor placement on the quadrant.

 

So here goes:

 

Leaders

  • Very high market share and revenues from CPM
  • High brand awareness
  • Broad coverage of CPM processes
  • Innovation through acquisition
  • High cost of ownership
  • Lower customer satisfaction

 

Challengers

  • Mature (aka old) CPM products
  • Other software categories (ie. BI) are more strategic to them than CPM
  • Tend to focus their CPM efforts on selling to their existing customer base
  • Products are capable but innovation has stalled
  • This is the quadrant where innovators and visionaries go to die

 

Niche Players

  • Small vendors targeting a specific process or vertical
  • “Wanna-be” upstarts looking for funding to expand their footprint and awareness
  • Older vendors focused on a geography or SMB, happy to make a living below the radar of the leaders
  • Aspirations of one day crossing the line to join the visionaries


Visionaries

  • They’ve “done their time” in the niche quadrant
  • Doing what Gartner thinks they need to become a leader or be acquired
  • Very strong at selling either the “steak” OR the “sizzle” (marketing and sales OR product innovation) but not both
  • Lots of VC money with exponential growth or privately-held with moderate growth
  • Have a “shtick” that is unique to their particular product (a unique module or technology) that differentiates them from the pack
  • They are the darlings of the Venture Capital community (some have raised more than $100M in funding)


How to see the “forest through the trees”

No one should evaluate all 17 vendors in the Magic Quadrant. That would be a complete waste of your time (and the time of 16 of the 17 vendors in the Quadrant!).  If you are a Gartner client the best thing to do is set up an inquiry with one of the authors. If not, asking yourself just a few key questions can quickly narrow down your search to a manageable number.

 

5 questions to thin the herd:

1. Do I want to make the safe choice or the best choice?

If you want the safe choice, the mega-vendors should be considered but realize that they tend to be more expensive and require more IT support.

2. Are my requirements simple or complex?

Basic requirements are well-suited to the low price point of pure-play SaaS.  More complex planning, consolidation, and financial/regulatory reporting can test the limits of pure-play SaaS solutions.

3. Do I want cloud or on-premise?

If you only want a SaaS solution you can rule out the Mega-vendors and many others.  If you need on-premise that rules out the SaaS pure-plays.  If you want to keep your options open you are down to only a few vendors.

4. Do I care if the vendor is global?

Many of the niche vendors and some of the visionaries only have operations in one or two global regions.  If your operations are globally dispersed, multi-lingual or multi-currency that can be an issue.

5. Is vendor growth or product innovation more important to me?

The SaaS pure-play vendors get high innovation marks for cloud strategy and marketing execution and high execution marks for year-over-year revenue growth.  Other visionary vendors get high grades for deep functionality, financial expertise, product strategy and industry-focused applications.

 

Personally, I think the Magic Quadrant is a great tool for those in the market for CPM solutions, but sometimes you need to be able to read between the lines in order to decipher the dots. I hope this helps.  

What are your thoughts? Do you use the MQ in your selection?

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