The Gartner Magic Quadrant is a framework looking at the competitive ability of four types of tech providers in a rapidly growing market. It looks at four profiles: challengers, leaders, niche players, and visionaries. This framework provides an overview of industry players to potentially identifying those players with the ability to create new market segments.
Aspect
Explanation
Gartner Magic Quadrant
The Gartner Magic Quadrant is a research methodology and graphical representation used by Gartner, Inc., a global research and advisory firm, to evaluate and analyze technology and service providers in various markets. It provides a visual snapshot of a market’s direction, maturity, and the relative positions of vendors within that market.
Four Quadrants
The Magic Quadrant is divided into four quadrants: Leaders, Challengers, Visionaries, and Niche Players. Each quadrant represents a different combination of completeness of vision (vertical axis) and ability to execute (horizontal axis), allowing for a quick assessment of a vendor’s strengths and weaknesses.
Leaders
Leaders are positioned in the upper-right quadrant of the Magic Quadrant. They are typically strong in both vision and execution and are considered the most capable and reliable vendors. They have a proven track record and are often market leaders with a broad product or service portfolio.
Challengers
Challengers are placed in the upper-left quadrant and are strong in execution but may lack a complete vision. They focus on delivering existing solutions effectively and are often large, established companies. While they excel in the present, they may not be as innovative or forward-looking as Leaders.
Visionaries
Visionaries are positioned in the lower-right quadrant and have a strong vision for the market’s future but may face challenges in executing their plans. They are known for their innovative thinking and may introduce disruptive technologies or concepts, but their execution may be less established.
Niche Players
Niche Players occupy the lower-left quadrant and are typically limited in both vision and execution compared to the other categories. They may have specialized solutions or focus on specific market segments but lack the comprehensive capabilities of Leaders, Challengers, or Visionaries.
Market Analysis
Gartner analysts conduct extensive research to assess vendors and their products or services. They consider various factors, including market trends, customer feedback, financial performance, and competitive landscape. The analysis results in a placement within the Magic Quadrant, which is published in Gartner reports.
Usage and Decision-Making
The Gartner Magic Quadrant is a valuable tool for IT professionals and business decision-makers when evaluating technology or service providers. It helps them quickly identify vendors that align with their organization’s goals and strategies, guiding them in making informed decisions about partnerships or investments.
Limitations
It’s important to note that the Magic Quadrant has limitations. It provides a snapshot in time and may not capture rapid market changes. Some vendors may not be evaluated due to specific criteria. Therefore, organizations should use the Magic Quadrant as one of several sources of information for decision-making.
Evolution
Over time, Gartner has introduced variations of the Magic Quadrant, such as the Magic Quadrant for Data Analytics and Business Intelligence Platforms or the Magic Quadrant for Cloud Infrastructure and Platform Services, to address specific market segments and technologies. This allows for more targeted evaluations.
Conclusion
The Gartner Magic Quadrant is a widely recognized and influential framework for assessing technology and service providers in various markets. It offers a visual representation of vendor capabilities and serves as a valuable resource for organizations looking to make strategic decisions about technology investments.
Table of Contents
Understanding the Gartner Magic Quadrant
The concept behind the Gartner Magic Quadrant comes from Gideon Gartner, who was one of the top Wall Street analysts in the technology sector. Gartner and the company he founded have historically released Magic Quadrant analyses on companies in the technology sector, giving awards to the best performers.
The quadrant itself seeks to divide any industry into four different sections: Challengers, Leaders, Niche Players, and Visionaries. Then, respective companies are placed in the quadrant according to their ability to execute (represented on the y-axis) against their completeness of vision (on the x-axis).
Let’s look at each of the four quadrants in more detail.
Challengers
On the quadrant, challengers have a high ability to execute with low completeness of vision. These organizations may be profitable and influential in the short-term, but they are not unaware of the future direction of their company, products, market, or industry.
Leaders
Leaders pair high completeness of vision with high ability. They are those that are dominating their industry and have good long-term prospects for remaining so.
Niche players
Niche players do not have complete visions, but they don’t have the ability to realize a vision in any case. As a result, they are unlikely to outperform others to gain a competitive advantage through innovation.
Visionaries
As the name suggests, visionaries have high completeness of vision. In theory, they recognize the future direction of a product, market, or industry. But they lack the ability to make their visions a reality.
Applications of the Gartner Magic Quadrant
Provides a detailed overview of industry players
It’s important to understand that Gartner Magic Quadrant reports act like a recommendation site for businesses looking to hire for large technology projects. In much the same way that Yelp lists highly regarded restaurants, Gartner reports review and present relevant tech industry players.
Upon receiving the report, the hiring business can quickly assess each “applicant” in terms of their vision and ability to carry out that vision. It also gives the hiring business a broad overview of the market and also of the competitive positioning of each technology company. Perhaps most importantly, the business can match its specific needs with the strengths or abilities of an applicant company.
Has the ability to create new market segments
Gartner Magic Quadrant reports can sometimes lead to the formation of new market segments if the company deems them important enough.
Once defined, these new markets legitimize and boost the credibility of newer companies who may otherwise have been overlooked. This has obvious flow-on effects for sales, revenue, and profit generation. It also drives innovation and growth in the sector itself.
Gartner magic quadrant example
While Gartner releases regular reports on hundreds of industries each year, we will examine the 2021 report for the digital commerce industry.
Who are some of the challengers, leaders, niche players, and visionaries?
Challengers
Shopify – the SaaS platform for small to medium-sized businesses reported 40% year-over-year growth in 2020, with its API and Shopify Plus features used extensively by larger businesses. However, Gartner noted that Shopify’s total cost of ownership (TCO) may not be the cheapest on the market. Clients have also reported the difficulty in working with Shopify during contract negotiations.
BigCommerce – another SaaS platform for small and medium-sized businesses that is cloud-based. BigCommerce has several clients with over $100 million in GMV and a strong presence in the United States. What’s more, the popularity of the platform is growing steadily in the Asia/Pacific and EMEA regions. Gartner cautions that BigCommerce has limited search engine and personalization functionality which may require third-party integration. The B2B offering is similarly basic and as a result, will likely not appeal to serious enterprise clients.
Leaders
Adobe – a company that has an established foothold in all major geographic regions and a diverse range of industries. Adobe Commerce is used by several clients with over $1 billion in GMV and is particularly favored by midsize companies that want a robust but customizable solution. Adobe’s global presence is seen as a major strength since it has a large number of service partners across all major markets. The characteristic modern and intuitive Adobe UI is also seen as a benefit. Looking forward, Gartner notes that the company’s low release cadence and lack of platform scalability may be cause for concern.
Salesforce – another leader in digital commerce is Salesforce, a company that offers various B2B, B2C, and B2B2C solutions. Like Adobe, Salesforce has a truly global presence but with important partnerships with companies such as Alibaba in the Chinese market. To that end, the Salesforce platform offers exemplary localization capabilities with over 100 currencies supported. Despite its varied product range, however, it’s important to note that some platforms were acquired from other providers and as a result, are based on different underlying technologies.
Niche players
Oro – a B2B eCommerce and CRM platform headquartered in Los Angeles, California. Oro is a niche player because it has a specific B2B focus with requirements for an integrated CRM system for sales teams. Having said that, Oro supports multiple B2X models, including business-to-government (B2G) and business-to-employee (B2E). It also offers a modular and extremely customizable workflow that supports multiple use cases. Gartner suggests that Oro is unlikely to outcompete others because of a lack of partners in distributed order management (DOM), third-party logistics (3PL), and CRM.
Kibo – a provider of single-tenant and multitenant SaaS with a reporting dashboard and an integration platform. Kibo primarily operates in the B2C space with most customers based in North America, and the platform excels in personalization features such as product and content recommendations, product collections, and native search results. Many of these features are free, which provides an important point of difference. Gartner notes that Kibo’s reliance on the B2C retail market in North America may hinder future growth.
Visionaries
Oracle – Oracle offers single and multi-tenant commerce platforms with on-premise and cloud-based options. The company’s B2B and B2C commerce capabilities are used by enterprises in a diverse range of industries, with many clients enjoying features such as sales force automation, subscription management, and ERP. The cloud-based product also offers Design Studio, a tool enabling businesses to create a customizable storefront that can be targeted to various customer segments. Despite its visionary status, Gartner identified that the cloud-based platform was adding customers more slowly than its competitors. What’s more, it can only be deployed with Oracle’s own cloud infrastructure. This may limit the company’s attractiveness to clients wishing to use AWS or Azure, for example.
VTEX – this company has a similar product offering to Oracle and is particularly dominant in the Latin American retail market. VTEX’s point of difference is extra functionality that extends beyond digital commerce. Features include marketplace operations, intelligent search, personalization, and a low-code, serverless development platform. There is also a diverse ecosystem of apps with over 400 available via the API and plug-ins. At present, VTEX’s platform is only available on AWS. This may hinder its ability to gain a foothold in the North American market if brands and retailers desire a non-Amazon-based solution. Gartner also noted that since most clients have GMVs under $50 million, enterprise prospects may have problems identifying comparable reference customers in their specific industry.
Case Studies
Cloud Service Providers:
Leaders: Amazon Web Services (AWS) and Microsoft Azure, given their comprehensive range of services, global reach, and robust infrastructure.
Challengers: Google Cloud Platform, which, while having significant infrastructure and capabilities, is still catching up to the top players in terms of market share.
Visionaries: Alibaba Cloud, given its strong presence in Asia and its innovative offerings.
Niche Players: DigitalOcean or Rackspace, which cater to specific needs and customer segments.
Customer Relationship Management (CRM) Software:
Leaders: Salesforce, known for its comprehensive suite of tools and significant market share.
Challengers: SAP or Oracle, both of which offer robust CRM solutions but may not be as agile or innovative as some competitors.
Visionaries: HubSpot, known for its inbound marketing approach and expanding CRM capabilities.
Niche Players: Zoho CRM or Nimble, which may cater to smaller businesses or specific industries.
Endpoint Security Solutions:
Leaders: Symantec and McAfee, both of which have a long history in the security space and offer comprehensive solutions.
Challengers: Sophos or Kaspersky, both of which have strong products but might not have the same breadth of offerings as the leaders.
Visionaries: Crowdstrike or Carbon Black, newer entrants known for their innovative approaches to endpoint security.
Niche Players: Malwarebytes or ESET, which offer specific solutions or cater to certain market segments.
Collaboration Software:
Leaders: Microsoft Teams or Slack, given their widespread adoption and comprehensive feature sets.
Challengers: Google Meet or Zoom, which have significant user bases but might be seen more as communication tools than comprehensive collaboration platforms.
Visionaries: Trello or Asana, known for their unique approaches to task and project management.
Niche Players: Basecamp or ClickUp, catering to specific collaboration needs or customer segments.
Enterprise Resource Planning (ERP) Systems:
Leaders: SAP or Oracle, given their long-standing presence in the ERP space and comprehensive tools.
Challengers: Microsoft Dynamics or Infor, which offer robust ERP solutions but might not have the market reach of the top players.
Visionaries: Workday or NetSuite, known for their cloud-native approaches and innovative features.
Niche Players: Epicor or IFS, which might cater to specific industries or regions.
E-commerce Platforms:
Leaders: Magento (Adobe) or Shopify, given their comprehensive toolsets and significant market shares.
Challengers: BigCommerce or WooCommerce, which have strong platforms but might not have the global reach of the leaders.
Visionaries: Wix or Squarespace, known for their design-centric approach to e-commerce.
Niche Players: PrestaShop or OpenCart, catering to specific market segments or needs.
Business Intelligence (BI) Tools:
Leaders: Tableau or Power BI, known for their comprehensive analytics tools and significant market adoption.
Challengers: Qlik or SAS, which offer strong BI solutions but might not be as agile as the leaders.
Visionaries: Looker or Domo, known for their innovative approaches to data visualization and analysis.
Niche Players: Sisense or Yellowfin BI, which might focus on specific industries or analytics needs.
Key takeaways
The Gartner Magic Quadrant is a measure of a company’s vision for future growth, measured against their ability to realize that vision.
The periodically released Gartner report is an industry-standard publication that allows businesses in search of new talent a holistic and detailed view of the technology sector.
The Gartner Magic Quadrant can uncover new markets or perhaps new attributes with which to judge those markets. Potentially, this legitimizes newer players and leads to growth and innovation in the sector as a whole.
Key Highlights
Understanding the Gartner Magic Quadrant:
Created by Gideon Gartner, the Magic Quadrant assesses tech providers’ competitive ability in a growing market.
Providers are categorized as Challengers, Leaders, Niche Players, or Visionaries based on their ability to execute and completeness of vision.
Four Quadrants of the Gartner Magic Quadrant:
Challengers: High ability to execute, low completeness of vision. Profitable and influential in the short term, but unsure of future direction.
Leaders: High ability to execute, high completeness of vision. Dominating their industry with good long-term prospects.
Niche Players: Low completeness of vision, but limited ability to realize a vision. Unlikely to outperform competitors through innovation.
Visionaries: High completeness of vision but lacking the ability to make visions a reality.
Applications of the Gartner Magic Quadrant:
Provides an overview of industry players, acting as a recommendation site for businesses seeking tech solutions.
Can create new market segments, legitimizing newer companies and driving growth and innovation.
The ADKAR model is a management tool designed to assist employees and businesses in transitioning through organizational change. To maximize the chances of employees embracing change, the ADKAR model was developed by author and engineer Jeff Hiatt in 2003. The model seeks to guide people through the change process and importantly, ensure that people do not revert to habitual ways of operating after some time has passed.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived from whether the market is new or existing, and whether the product is new or existing.
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.
The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.
The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.
The McKinsey 7-S Model was developed in the late 1970s by Robert Waterman and Thomas Peters, who were consultants at McKinsey & Company. Waterman and Peters created seven key internal elements that inform a business of how well positioned it is to achieve its goals, based on three hard elements and four soft elements.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
The McKinsey Horizon Model helps a business focus on innovation and growth. The model is a strategy framework divided into three broad categories, otherwise known as horizons. Thus, the framework is sometimes referred to as McKinsey’s Three Horizons of Growth.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.
According to Michael Porter, a competitive advantage, in a given industry could be pursued in two key ways: low cost (cost leadership), or differentiation. A third generic strategy is focus. According to Porter a failure to do so would end up stuck in the middle scenario, where the company will not retain a long-term competitive advantage.
In his 1985 book Competitive Advantage, Porter explains that a value chain is a collection of processes that a company performs to create value for its consumers. As a result, he asserts that value chain analysis is directly linked to competitive advantage. Porter’s Value Chain Model is a strategic management tool developed by Harvard Business School professor Michael Porter. The tool analyses a company’s value chain – defined as the combination of processes that the company uses to make money.
Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.
A SWOT Analysis is a framework used for evaluating the business‘s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.
Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
