In 2019, Gartner released the very first Magic Quadrant for SAM Managed Services. This report is a culmination of analysis that positions vendors in the SAM Managed Service market. The Magic Quadrant is a snapshot in time that assesses a vendor’s Completeness of Vision and their Ability to Execute. The report is released annually and the organizations it includes each year, and their positions are subject to change as the inclusion criteria and the factors on which they are measured adjust to respond to the market. See the 2023 report here.
The Magic Quadrant really is a useful research tool for anyone looking to differentiate service providers in the industry, it’s the most unbiased and in-depth review out there.
How does the Magic Quadrant work?
To be considered for inclusion in the Magic Quadrant, SAM managed service providers must meet specific criteria defined by Gartner. These criteria typically include revenue thresholds, geographic distribution, types of services offered, and the frequency of those services.
Gartner’s evaluation process involves sending out inclusion criteria to providers and subsequently requesting responses to a welcome packet. The responses cover evaluation criteria and their respective weights (high, medium, and low), which determine the plot points on the Magic Quadrant.
Understanding the Gartner Magic Quadrant
The Gartner Magic Quadrant is a graphical representation that evaluates technology vendors based on two dimensions: “completeness of vision" and “ability to execute." These dimensions are represented by the x-axis and y-axis, respectively.
The Magic Quadrant categorizes vendors into four quadrants: Leaders, Challengers, Visionaries, and Niche Players.
Definitions of evaluation criteria
Ability to Execute
Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the sub-criteria.
Overall Viability: Viability includes an assessment of the overall organization’s financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization’s portfolio of products.
Sales Execution/Pricing: The vendor’s capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.
Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor’s history of responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization’s message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This “mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.
Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: The ability of the vendor to understand buyers’ wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers’ wants and needs and can shape or enhance those with their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor’s approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.
Business Model: The soundness and logic of the vendor’s underlying business proposition.
Vertical/Industry Strategy: The vendor’s strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor’s strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the “home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.
The Quadrant categories
Leaders: Vendors positioned in the top right quadrant demonstrate both a strong Ability to Execute and a Completeness of Vision aligned with Gartner’s market analysis. Leaders often have a wide range of services and global coverage. They are well-regarded for their industry expertise and thought leadership. Leaders execute well against their current vision and are well-positioned for tomorrow.
Challengers: Positioned in the top left quadrant, Challengers exhibit a higher Ability to Execute but may have a more limited or stagnant vision. They might not align with Gartner’s market analysis or lack investments in line with the industry’s direction.
Visionaries: Positioned in the bottom right quadrant, Visionaries possess a complete vision but may face challenges in executing it effectively. They offer unique perspectives and insights but may not have the necessary resources or capabilities to fully realize their vision.
Niche Players: Positioned in the bottom left quadrant, Niche Players have relatively lower scores in both Ability to Execute and Completeness of Vision. They often focus on specific niches or have limited geographic coverage but may still provide valuable services to certain client requirements.
The significance of the Magic Quadrant
The Gartner Magic Quadrant plays a crucial role in shaping the SAM managed services industry. The research process involves interviews with clients, industry-specific feedback, and Gartner’s own thought leadership and research.
Through these methods, Gartner gains valuable insights into the industry’s current state and future developments. The Magic Quadrant reflects the evolving market and contributes to its evolution by providing insights, forecasts, and recommendations to vendors and businesses.
The importance of client feedback
While SAM managed service providers invest significant effort in preparing materials and responding to Gartner’s evaluation criteria, client feedback plays a pivotal role in the Magic Quadrant’s outcomes. Gartner often conducts interviews with clients, incorporates Gartner Peer Insights reviews, and values open and transparent discussions with providers and their clients. They may request customer references and they also use input from inquiries and surveys. A combination of objective criteria and client feedback helps Gartner create a comprehensive view of each SAM managed service provider.
Maintaining a Leader position in the Magic Quadrant requires ongoing effort and commitment from SAM managed service providers. While there may not be a definitive formula for success, maintaining leadership typically entails aligning the entire organization towards market-leading practices, striving for excellence in service delivery, fostering thought leadership, and embracing continuous evolution. The ability to execute across multiple regions and a wide range of services, coupled with a strong emphasis on thought leadership, helps providers maintain their Leader position in the Magic Quadrant.
The Gartner Magic Quadrant for SAM Managed Services serves as a valuable resource for businesses seeking software asset management assistance. By evaluating vendors based on their completeness of vision and ability to execute, the Magic Quadrant helps organizations make informed decisions about selecting the right managed service provider.
The quadrants—Leaders, Challengers, Visionaries, and Niche Players—provide a visual representation of vendors’ positioning and help businesses understand their strengths and weaknesses. With a focus on client feedback and industry insights, the Magic Quadrant not only reflects the current state of the industry but also contributes to its evolution. At Anglepoint, we strive to maintain our Leader positions by continuously improving our services, embracing thought leadership, and adapting to market trends.
You can download your complimentary copy of the 2023 Gartner® Magic Quadrant™ for Software Asset Management Managed Services on our dedicated page.
To find out more about how Anglepoint prepares for the Gartner Magic Quadrant and the stringent process involved, watch this podcast Gartner Magic Quadrant 2023 Reaction.