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Reading between the lines of the Gartner PPM MarketScope

It's time to reflect on Gartner’s summer reading “2011 MarketScope for Project and Portfolio Management Applications." This vendor analysis – which replaces what was once the “Magic Quadrant for IT Project and Portfolio Management” – really shook up the competitive landscape in terms of challenging the common wisdom on who are the market leaders and who are the followers. Instantis was one of only five vendors to achieve the “Strong Positive” rating which was the highest rating awarded. With the exception of Microsoft, the other “Strong Positive” vendors, like Instantis, are the new breed of smaller, born-on-the-web cloud solution providers. The big guys including CA, Oracle, CompuWare and PlanView, the old guard PPM leaders and challengers, were relegated to the second tier.

What does this say about some of the prevailing assumptions about the characteristics of a strategic Enterprise PPM solution provider? Reading not too deeply between the lines, the following is clear to me:

First, SaaS is the strategic enterprise software platform of the future. Vendors that were not born-on-the-web SaaS/Cloud PPM providers (with the exception of Microsoft) were punished in this evaluation. Clearly, any misgivings Gartner may have had in the past -- about the ability of SaaS providers to deliver mission-critical service-levels and traditional enterprise software levels of control in the cloud -- have evaporated. Instantis EnterpriseTrack, for example, has delivered "five-nines" 99.999% availability and zero data loss over the past decade.

Second, the single-vendor IT performance management and control strategy which integrates IT service management, application life-cycle management and project and portfolio management software tools, is not all its cracked up to be. Vendors offering their own help desk, asset management and IDEs seem to have more trouble integrating their own proprietary technologies as the smaller PPM-focused providers do relying on industry standard web-service interfaces and off-the-shelf connector technologies to integrate with installed software.

Even within the PPM space, vendors with a strong portfolio management story (regardless of how deep they went on the “transactional” project management capabilities) were rated highest because in Gartner’s view they can be successful integrating with “transactional” project management tools. In sum, reading between the lines, there was a subtle shift or at least a whole new level of tolerance for the solution approach that relies on integrating best-in-breed solutions versus the single-vendor solution strategy which seemed to be given more weight in the 2010 analysis.

Third, and this is really the inverse of the point above, Gartner’s conclusions arguably endorse the notion that customers place more value on the ability of the best-in-breed, born-on-the-web solution providers to out-innovate the software gorillas than they do on the promise of a complete “integrated” solution for IT governance and control from a single vendor. Or, maybe Gartner is just not confident the big guys can or ever will deliver on that promise without exceeding the customer pain threshold, especially with respect to the “lock-in” support, service and maintenance fees they will be expected to fork over for a very long period of time.

Fourth, I infer that Gartner believes that the risk-reward equation tilts in favor of the nimble, innovative, best-in-class providers. The superior “viability” of the billion-dollar-revenue software club versus the more limited “ability to execute” of the small guys is not worth fretting over. In the past the playing field may have been tilted in favor of vendors with girth in terms of revenue, employees, global sales, services and partner presence. We may be small, but on average as a group, the born-on-the-web babes have been around for ten plus years and have successfully navigated the dot.com bubble burst and the great recession. The old “Ability to execute” consideration seems to value track records of delivering product quality and innovation. Viability and survivability is not being questioned.

In closing, this vendor landscape shake-up was bold, rational and necessary in my opinion. What did you expect me to say?