RETURN DATE: AUGUST 19, 2014

NETSCOUT SYSTEMS, INC., SUPERIOR COURT

Plaintiff, JUDICIAL DISTRICT OF v. STAMFORD/NORWALK

GARTNER, INC., AT STAMFORD

Defendant. AUGUST 4, 2014

COMPLAINT

Plaintiff NetScout Systems, Inc. ("NetScout"), by its attorneys Bingham McCutchen LLP,

and in support of its claims against Defendant Gartner, Inc. ("Gartner"), respectfully makes the

following allegations. Except as to allegations regarding NetScout, which allegations NetScout

knows to be true, these allegations are made upon information and belief, based on publicly

available information and the diligent investigation conducted by NetScout.

NATURE OF THE ACTION

1. This is an action for violation of the Connecticut Unfair Trade Practices Act

("CUTPA"), Conn. Gen. Stat. 42-110b, and corporate defamation, brought by NetScout, a

Massachusetts information technology company, against Gartner.

2. Gartner, an information technology ("IT") research giant, markets itself as an

"independent and objective" company offering actionable technology research from an

"unbiased source." In fact, Gartner is not independent, objective or unbiased, and its business

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model is extortionate by its very nature. Its substantial success is due to the worst kept secret in

the IT industry: Gartner has a "pay-to-play" business model that by its design rewards Gartner

clients who spend substantial sums on its various services by ranking them favorably in its

influential Magic Quadrant research reports ("Magic Quadrant reports") and punishes technology

companies that choose not to spend substantial sums on Gartner services.

3. While Gartner purports to provide objective and unbiased analysis of technology

companies in its Magic Quadrant reports, Gartner sells other services to technology companies,

including "consulting" services, informing companies that, if they pay for Gartner's "consulting"

services, the companies will enhance their relationships with Gartner analysts, an obvious means

of improving their prospects in the Magic Quadrant report. Gartner's message is plain: pay

Gartner for "consulting" services and in exchange Gartner will rank your company higher and

make favorable statements about your company in its Magic Quadrant report.

4. This "pay-to-play" business model is facilitated by Gartner's immense influence

within the IT industry. A favorable ranking in Gartner's Magic Quadrant report can "make or

break" an IT company. IT companies are pressured into spending substantial sums on Gartner's

"consulting" services to better position themselves in these "magic" reports. As one published

article questioning Gartner's business practices observed: "[flailure to get a favorable mention

in an analyst report could undermine years of product development. Acceptance, on the other

hand, boosts a company's exposure and is essential for buyers drawing up short lists."

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5. Gartner was founded in 1979 by prominent Wall Street computer analyst Gideon

Gartner. Gideon Gartner has stated that Gartner's Magic Quadrant reports are "misused and

abused" and commented on the "potential tainting" of the "objectivity of [its] research." As

Gideon Gartner, who is no longer affiliated with Gartner, stated:

The reason why people revile the Magic Quadrant is because it is misused . . . As a guideline for a bunch of amateurs it's one thing. But when all your clients live or die on the basis of whether Gartner Group puts you in the upper right hand corner in the -- or wherever -- that's really bad news. And when there's potential tainting of the objectivity of research because you have very large contracts with your vendors, with your customers, people will always come and complain. . . . Today, it is overused, misused and abused, terribly.

6. The very same analysts who draft Gartner's influential Magic Quadrant reports

sell "consulting" services to the IT vendors ranked in Gartner's reports. Through its

"consulting" services, Gartner sells access to its analysts. Thus, not only is Gartner issuing

purportedly "unbiased" research about its own fee-paying clients, but the very same analysts who

draft those reports have direct consulting relationships with the companies that they purport to

"independently and objectively" analyze. These conflicts of interest inevitably lead to biased

research reports, aggressive cross-selling of Gartner's research-based consulting services, and

less desirable Magic Quadrant rankings for those technology companies who refuse to spend

substantial sums on those services.

7. The U.S. Securities and Exchange Commission ("SEC") has punished similar

business practices by financial analysts on Wall Street (as opposed to technology analysts like

Gartner), finding that such business practices violate rules requiring the financial analysts to

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observe just and equitable principles of trade and principles of good business practice. There,

like here, the financial analysts were, on the one hand, publishing analyst reports evaluating

companies, while, on the other hand, offering those same companies services for a fee.

8. Indeed, the SEC instituted enforcement actions against ten Wall Street firms,

which resulted in an over $1 billion settlement and structural reforms of the entire financial

analyst industry. See infra paragraphs 115-116. Those structural reforms were intended to

remove the conflicts of interest and unfair and deceptive business practices that led to biased and

inaccurate analyst reports. See infra paragraphs 105-118.

9. The SEC and other regulators have since promulgated regulations specifically

prohibiting financial research firms from engaging in the same types of unfair and deceptive

business practices that persist at Gartner to this day. See SEC Regulation AC; FINRA Rule 2711;

NYSE Rule 472.

10. While Gartner's business practices are not regulated by the SEC, its business

practices are no less unscrupulous or unethical. The unfair and deceptive business practices

employed by Gartner have damaged NetScout and its business through, among other things,

reputational harm and lost business opportunities. Gartner has further damaged NetScout by

forcing it to expend considerable sums of money to counteract Gartner's false and defamatory

statements within the marketplace.

11. NetScout is an industry leader for advanced network, application and service

assurance solutions. In layman's terms, it manufactures, sells and supports technology products

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that allow a company to manage, monitor, diagnose and service that company's computer

network and underlying services.

12. NetScout is the leader in its market sector. With annual revenues of

approximately $400 million, it is the largest player in a market that Gartner defined as a $1

billion market. Further, NetScout is a company of the future, with a year-over-year revenue

growth rate of 15%. It owes its success in part to the fact that its products are far more scalable

than any of its competitors -- they can be used at very large companies with very fast computer

networks -- which explains why NetScout's products are deployed in 92 of the Fortune 100

companies, all five branches of the U.S. military, 19 of the top 20 commercial banks, the top ten

airlines, and the top ten financial service providers.

13. Despite Gartner's not-so-veiled overtures, NetScout has not engaged Gartner for

"consulting" services in the past five years.

14. NetScotit suffered the consequences in a recent Gartner Magic Quadrant report.

15. In a Magic Quadrant report for the Network Performance Monitoring and

Diagnostics market ("Magic Quadrant Report for NPMD"), published on March 6, 2014, Gartner

did not rank NetScout as a "Leader." Instead, it ranked NetScout as a "Challenger," which

Gartner defined as, essentially, a technology company that saddles its customers with outdated

technology. Gartner stated falsely that NetScout is "currently struggling to deal with new

technical demands and rising expectations" and has "architectures, feature sets and pricing

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structures that require modernization (often in progress) to better compete with those in the

Leaders quadrant."

16. Further, Gartner also made the following false and defamatory statements in its

report:

n NetScout offers "only a hardware-based deployment model" that "limits [its] ability to address growing software and SaaS solution demand."

n NetScout has a "limited ability to expand beyond its network management heritage." NetScout is "perceived as a conservative stalwart in the NPMD space, and lacks the reach and mind share that many smaller competitors have."

17. Gartner ranked three other companies as "Leaders" who spent a significant

amount on Gartner's services and who do not deserve to be ranked ahead of NetScout, by any

measure.

18. Upon receiving a pre-publication draft of Gartner's Magic Quadrant report,

NetScout informed Gartner both orally and in writing that the Report contained numerous false

and disparaging statements of fact about NetScout. Despite having actual notice of these factual

errors, Gartner published the Magic Quadrant Report for NPMD without material alteration and

with actual malice, knowledge and/or reckless disregard of the false and defamatory statements

of fact regarding NetScout contained within the Report.

PARTIES

19. Plaintiff NetScout is a corporation organized under the laws of Delaware, with its

principal place of business in Westford, Massachusetts.

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20. Defendant Gartner is a corporation organized under the laws of Delaware, with its

principal place of business in Stamford, Connecticut.

FACTS

NetScout's Business

21. Founded in 1984, NetScout Systems, Inc. is a world-renowned innovator and

provider of integrated network performance management ("NPM") products.

22. NetScout designs, develops, manufactures, markets, licenses, sells and supports

advanced network, application, and service assurance solutions. NetScout's solutions are used

by commercial enterprises, large governmental agencies, and telecommunication service

providers worldwide to manage and monitor computer networks, optimize the delivery of

business applications and services, and assure user experience across global IP networks.

NetScout's solutions help companies' information technology staffs to quickly analyze

performance, availability and quality for network and application service delivery. This allows

them real-time visibility to identify service delivery issues early, improve service levels, reduce

operational costs, mitigate security risks, drive better business decisions and otherwise ensure

that key information technology systems are operational and functioning properly. Thus,

NetScout's products allow some of the largest companies in the world to monitor and ensure the

functionality of their information technology systems, and rely on that functionality to deliver

products and services to their customers.

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23. NetScout went public in 1999, and almost immediately exceeded the market's and

industry's expectations by earning over $100 million in annual revenues by 2001, less than ten

years after its first product introduction.

24. NetScout has a long history of innovation within the NPM market. NetScout

introduced the industry's first packet-flow based probe. Nearly every NPM market participant

now uses variations of the packet-flow based probe technology that NetScout pioneered.

NetScout has installed over 20,000 network probes to date, covering over 100,000 networks,

which is more than all of NetScout's competitors, combined. NetScout also was the first to

deliver an NPM solution for Switched LANs, one of numerous innovations from NetScout.

25. From its humble beginnings as a fledging technology startup in 1984, NetScout

has grown, both organically and through several strategic acquisitions, into a leader in the NPM

market. In 2007, NetScout acquired one of its principal direct competitors and a well-known

leader in the NPM market space, Network General. Just five years after the Network General

acquisition, International Data Corp., a leading market research, analysis, and advisory firm,

declared NetScout the largest NPM company in the world based on annual revenues. Since 2011,

NetScout's annual revenue has grown from $260 million to nearly $400 million.

26. NetScout's global reach is undeniable. NetScout offers sales, support, and

services in more than 30 countries, yielding international revenues for fiscal year 2014 of

approximately $93 million.

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27. NetScout's products are deployed in 92 of the Fortune 100 companies (including

all five of the top five), 370 of the Fortune 500 companies, and more than 165 service providers.

Additionally, all five branches of the U.S. military, 19 of the top 20 commercial banks, ten of the

top ten airlines, and ten of the top ten financial service providers utilize NetScout technology.

28. After decades of consistent vision, innovation, and leadership, NetScout employs

more than 1,000 people and earned approximately $400 million in revenue for its fiscal year

2014. For its first fiscal quarter of 2015, NetScout earned revenue of approximately $108

million, a 32% year-over-year increase, and it earned non-GAAP net income of $15 2 million, a

75% year-over-year increase. As of June 30, 2014, NetScout held $234 million in cash and cash

equivalents and short and long-term marketable securities.

29. NetScout earned more than $350 million in revenue in fiscal year 2013. Thus,

from fiscal year 2013 to fiscal year 2014, NetScout grew its annual revenue by $50 million,

while the three NetScout competitors that Gartner placed in the "Leaders" quadrant achieved less

than $50 million in revenue growth, combined.

30. NetScout is the only company in the NPM space that has such a rich history of

technological innovation, depth and breadth of customer base, dedication to research and

development, product vision, and history of sustained growth. All of the foregoing facts about

NetScout's business were known or available to Gartner when it published the Magic Quadrant

Report for NPMD.

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Gartner And Its Magic Quadrant Research Reports 31. Founded in 1979, Gartner refers to itself as "the world's leading information

technology research and advisory company." It employs approximately 6,000 associates,

including almost 1,500 research analysts and consultants. It has clients in 85 countries.

Gartner's revenue for 2013 exceeded $1.7 billion.

32. Gartner claims to offer "insight" concerning the IT industry. It states:

We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in over 14,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role.

33. One of the foundations of Gartner's influence within the IT industry is its Magic

Quadrant research reports. Magic Quadrant reports purport to provide Gartner's objective,

factual research analysis of particular IT market segments identified by Gartner analysts.

34. Gartner's Magic Quadrant research methodology provides a graphical competitive

positioning of four types of technology providers in fast-growing markets: Leaders, Visionaries,

Niche Players and Challengers. Leaders are obviously the most desirable position. Niche

players are the least desirable position.

35. Gartner's Magic Quadrant reports are aimed at the customers or potential

customers of the IT vendors analyzed in those reports. The Magic Quadrant reports purportedly

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are designed to aid large-scale consumers of IT products in making purchase or product

investment decisions within the identified segment of the IT industry addressed by the particular

Magic Quadrant report. 36. According to Gartner, placement in the Magic Quadrant is determined by two

primary criteria: "Ability to Execute" and "Completeness of Vision." A vendor's "Ability to

Execute" is reflected along the vertical axis of the grid. A vendor's "Completeness of Vision" is

reflected along the horizontal axis of the grid.

Challengers Leaders

Niche Players Visionaries

Completeness of Vision

37. Gartner maintains that it uses a "uniform set of evaluation criteria" to determine

where a vendor is placed within the Magic Quadrant. Those evaluation criteria are defined in the Magic Quadrant Report for NPMD and weighted according to their supposed importance.

Abilit

y to

Exe

cute

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38. Gartner purports to use the following criteria to evaluate a vendor's "Ability to

Execute":

n Product/Service n Overall Viability (Business Unit, Financial, Strategy and Organization) n Sales Execution/Pricing n Market Responsiveness and Track Record n Marketing Execution n Customer Experience

39. Gartner purports to use the following criteria to evaluate a vendor's

"Completeness of Vision":

n Market Understanding n Marketing Strategy n Sales Strategy n Offering (Product) Strategy n Business Model n Vertical/Industry Strategy n Innovation n Geographic Strategy

40. Gartner does not publicly disclose how it scores each vendor relative to each of

those criteria. The unmistakable implication Gartner conveys, however, well understood by any

reasonable reader, is that Gartner's conclusions rest on its purportedly "fact-based" analysis.

41. In addition to the Magic Quadrant itself, Gartner's Magic Quadrant reports also

contain narrative summaries of each of the companies that it places in the Magic Quadrant.

Those summaries typically consist of a one-paragraph description of the given company, its

business, and products.

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42. Directly below the narrative description are two headings entitled "Strengths" and

"Cautions." Underneath the "Strengths" heading are bullet points listing what purport to be

positive facts concerning the company. Underneath the "Cautions" heading are bullet points

listing what purport to be negative facts concerning the company.

Gartner Wields Enormous Influence In The IT Industry

43. Gartner's dominance in the IT research industry is beyond dispute, and that

dominance has, in large part, been built upon its influential Magic Quadrant research reports.

Gartner touts its influence in the IT industry in its marketing materials and financial reports filed

with the SEC, stating that it is "the world's leading information technology research and advisory

company" and that it "create[s] the broadest, highest-quality and most relevant research coverage

of the IT industry."

44. Gartner has cultivated its influence within the IT research industry by acquiring

many of its competitors. Since Gartner went public in 1993, it has made more than 32

acquisitions and investments.

45. Gartner's marketing materials state that its research reports influence "thousands"

of IT purchasing decisions: "[t]housands of companies and government agencies worldwide will

not make major IT decisions without asking, 'What does Gartner Say?" 46. Indeed, the primary consumers of NetScout's products, such as large businesses,

institutions and government entities, rely heavily, and in some cases exclusively, on Gartner's

Magic Quadrant reports when making IT purchasing decisions. For example, a Department of

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Veterans' Affairs report found that $16 million in purchases were made entirely on the basis of

Gartner's reports (which the Department's Inspector General found improperly limited competition).

47. Companies seeking to purchase IT equipment sometimes refuse even to consider

making technology purchases from companies that are not Leaders in Gartner's Magic Quadrant research reports. For example, in certain international technology markets, such as Asia and the

Middle East, purchasers often invite product bids only from technology vendors that Gartner has

ranked in the "Leaders" quadrant of their Magic Quadrant research reports. 48. Being ranked as a "Leader" often results in increased sales and revenue for IT

vendors. In addition, IT vendors that Gartner ranks as "Leaders" often become more attractive,

and valuable, acquisition targets for companies looking to improve both their standing within a

particular technology market and their placement within Gartner's Magic Quadrant reports. 49. IT vendors that have been ranked as "Leaders" in Gartner's Magic Quadrant often

advertise that ranking on their company websites. Gartner facilitates that advertising by charging

IT vendors a fee to allow them to include a link on their website to a licensed copy of the

relevant Magic Quadrant report. 50. Each of the IT vendors that Gartner ranked as "Leaders" in Gartner's Magic

Quadrant Report for NPMD advertises its "Leader" ranking on its website and provides a link to a complimentary licensed version of the Magic Quadrant Report for NPMD.

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Gartner's Business Model And Practices

51. Gartner's extraordinary influence in the IT industry is well known and publicly

recognized by IT industry observers and participants. How Gartner wields that influence,

however, has raised serious questions within the IT industry, and amongst market observers,

concerning Gartner's business practices. In particular, an article in InformationWeek entitled

"Credibility Of Analysts" reported on Gartner's "troubling" business practices and influence

within the IT industry.

52. In that article, InformationWeek publicized what many IT vendors had long

known, but were reluctant to state publicly for fear of reprisal: Gartner's business model is

inherently biased and favors those IT vendors who are high-paying Gartner clients. As

InformationWeek reported regarding Gartner's business model:

[T]hey . . . rake in millions providing services to the very same companies they monitor, heavyweights like Cisco, IBM, Microsoft, and Oracle. Which leads to a question that continues to dog the research firms: How much influence do technology vendors have over their work?

At issue are business practices that beg for closer scrutiny.

53. InformationWeek provided specific examples of how IT vendors feel compelled

to buy into Gartner's "pay-to-play" business model due to its outsized influence within the IT

industry. InformationWeek highlighted the experience of IT vendor and Gartner client,

Proofpoint. Proofpoint's senior VP of marketing and products acknowledged the importance of

receiving a favorable placement in Gartner's Magic Quadrant reports:

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Proofpoint, a Gartner client since 2003, expects to be included in Gartner's first-ever Magic Quadrant for content monitoring and filtering software . . . . "This matters more than you want it to matter," says Sandra Vaughan, Proofpoint's senior VP of marketing and products.

Failure to get a favorable mention in an analyst report could undermine years of product development. Acceptance, on the other hand, boosts a company's exposure and is essential for buyers drawing up short lists. "Our target market is big companies, so Gartner matters," Vaughan says.

54. The InformationWeek article concludes by noting that "[r]esearch firm executives

are well aware of the questions being raised about their business models, but don't expect

changes to be fast or wide-sweeping. The financial stakes are too high -- and the incentives for

change aren't compelling enough."

55. The concerns expressed in the InformationWeek article about Gartner's business

practices are widespread amongst persons who work in the IT industry. One person noted how

his experience with one of Gartner's research analysts led him to conclude that "you need to be

paying to play." As that person stated:

When with a previous employer, in one MQ interview I did it was suggested by , the Gartner analyst that we were "not visionary enough" for that part of the quadrant. When I asked what was visionary I was told that to get that information we needed to be clients. So I concluded that you had to pay to know what was visionary and then re-work that into your vision in a nice circular process. So I do not know what the cost is but it seems to me you need to be paying to play.

56. Another person recounted how insiders at web content management firms have

indicated to him that "you need to shell out" money to Gartner to be included in Gartner's Magic

Quadrant reports:

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I don't put much stake in their magic quadrants simply because I've got contacts at a number of [web content management] firms who've been told in a nutshell that they have to shell out [money to Gartner] to be included. I will not mention names but I trust them. While [Gartner] may not come right out and say they charge a fee, they certainly aren't going to give you something for nothing. It's all based on how much you do or might spend Ion Gartner], as far as I'm concerned.

57. Yet another person has recounted his own personal experience with Gartner's

"pay-to-play" business practices while employed at an IT vendor:

I have had personal experience via a company I worked for that we were only included in an M[agic] Quadrant] when we became a Gartner customer, and when we stopped being a customer we weren't invited to participate in the MQ again. So sorry, ex-Gartner folk, but it is a pay-for-play game.

58. Gartner's "pay-to-play" business model is founded upon the influence of its

research reports within the IT industry. Gartner leverages its influential research to pressure IT

vendors that are the subject of that research into purchasing additional services from Gartner.

59. Gartner describes its "independent research on IT and supply chain issues" as

"[t]he foundation for all Gartner products and services." Gartner sells its "findings from this

research" through three business segments that it markets as Research, Consulting and Events.

60. Gartner describes its "Research" segment (which produces the Magic Quadrant

reports) as delivering "independent, objective IT research and insight primarily through a

subscription-based, digital media service." Gartner's research is "the fundamental building

block for all Gartner services."

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61. Gartner actively seeks to develop, and does develop, close economic relationships

with the same companies that it rates in its research reports.

62. Gartner's business model seeks to leverage its "most valuable clients" by "cross-

selling" its services, including its "consulting" services. The term "cross-selling," as used by

Gartner, amounts to a euphemism for its practice of pressuring its research clients to pay for

additional services or risk negative treatment in its influential research reports. What Gartner

refers to as "cross-selling," is really a "carrot-and-stick" approach to getting its IT vendor clients

to purchase additional Gartner services.

63. In its 2013 Form 10-K filed with the SEC, Gartner states that its business model

seeks to leverage its "most valuable clients" by "cross-selling" its services, including its

"consulting" services. According to Gartner, its business model:

[F]acilitate[s] increased client spending on [Gartner's] research, consulting services and events. A critical part of [Gartner's] long-term strategy is to increase business volume with our most valuable clients, identifying relationships with the greatest sales potential and expanding those relationships by offering strategically relevant research and advice . . . . These initiatives have created additional revenue streams through more effective packaging, campaigning and cross-selling of our products and services.

64. One of the components of Gartner's "long-term strategy" is the "cross-selling" of

its "consulting" service to its research clients. As Gartner disclosed: "Gartner consulting

deepens relationships with our Research clients by extending the reach of our research

through custom consulting engagements."

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65. Gartner's unmistakable message to IT vendors is that they can improve their

placement in the Magic Quadrant by buying access to Gartner's analysts to receive their

"perspective" on how the given IT market will develop.

66. One employee at an IT vendor covered by Gartner analysts recounted his own

experience with Gartner's "cross-selling" of its services in a post entitled "How much does it

cost to be included in Gartner Magic Quadrant?" As that employee stated:

I received [the] following email from [a] Gartner sales rep: your biggest competitor [in] SF just came onboard this quarter and took advantage of our flexibility. Also they are in the process of filling out the BI MQ questionnaire which they are not guaranteed to be included but are working with the analysts to get more coverage in 2011. I want to give you a heads up because if you see that they are included and you are not, being a client will give you a good vehicle to plead your case.

67. Thus, whether and how much a vendor pays Gartner for its "consulting" services

is an important factor that bears on where Gartner places an IT vendor in the Magic Quadrant

and what Gartner states regarding the IT vendor in its Magic Quadrant report.

68. To improve or retain their placement in the Magic Quadrant under Gartner's

business model, IT vendors must spend substantial sums of money on Gartner's services,

including, but not limited to, services that allow access to Gartner analysts.

69. To obtain the most basic level of access to Gartner's analysts, vendors must

purchase what Gartner refers to as an "inquiry seat." An "inquiry seat," which costs $50,000,

may only be used by one designated individual at the vendor for a 12-month period. An "inquiry

seat" entitles the vendor-designated individual access to Gartner's research reports relating to a

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specific discipline, and access to Gartner analysts in the form of analyst "inquiries." If a vendor

does not have an inquiry seat, it cannot participate in calls with analysts.

70. Analyst "inquiries" -- available only to Gartner client seat holders -- are

conference calls that typically last 30 minutes or less and that are generally related "only to the

interpretation or application of Gartner research." On its website, Gartner describes analyst

"inquiries" as follows: "During inquiries, the flow of information is mostly from analyst to

vendor and can be highly interactive." "Seat" holders, however, are not entitled to "extensive

analysis or additional research by the analyst" during the inquiries.

71. Both client seat holders and non-client seat holders may participate in "vendor

briefings," during which vendors may "present their product, business plans and strategies to

Gartner analysts." "Vendor briefings" are one-way, meaning that "the flow of information is

strictly from vendor to analysts and is not an interactive analyst feedback session." Thus,

vendors do not receive a Gartner analyst's "perspective" during "vendor briefings."

72. Gartner refers to this one-way flow of information from IT vendors to Gartner

analysts as "outbound" "analyst relations" strategy. A purely "outbound" "analyst relations"

strategy can be achieved through "vendor briefings," for which IT vendors are not required to

pay. Gartner describes the "outbound" analyst relations strategy as providing the lowest amount

of "strategic value."

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Strategic Advisor "My Inbound AR Strategy'

Analyst 401:11, You Analyst inquiry and SAS

A two-way consultative relationship whereby analysts advise you on your go-to-market strategies and growth plans Face-to-face strategic sessions with analysts, which you can use to prepare for shareholder meetings, conduct business planning or get feedback on our ideas

The Strategic AR Mindset - Striving to Build Trust Based Analyst Relationships

Low Strategic Value High

Maximum Value

Analyst You Analyst You

Vendor Bnefings

Research services Scheduling a vendor 2417 access to Gartner

briefing (available to any research. enabling you to technology and service make decisions in real time providerclient or non-

Insight you can't get client) anywhere else on your

Educating analysts on your customers, markets and company's direction and: or competitors new product

Analytics you can use to announcements via a gauge the effectiveness of vendor briefing your marketing and sales

efforts

AR Mindset

Information Flow

AR Activities

Actions: Assess your own approach: if your strategy is "Outbound, PR-Only", develop an action plan to encompass "Inbound" elements as well. Track your intern ions with analysts, if Inbound = 2X Outbound, your mix is healthy. Gartner

73. One way that Gartner implements its "pay-to-play" business model is by

recommending that Gartner research clients adopt an "inbound" analyst relations strategy that

necessarily involves the payment of a substantial amount of money to Gartner.

74. According to Gartner, the highest amount of "strategic value," or "maximum

value," is achieved through an "inbound" "analyst relations" strategy. Gartner depicted its

recommended best practices for "analyst relations" strategy in the following slide:

75. An "inbound" strategy requires "[a] two-way consultative relationship" involving

"[f]ace-to-face strategic sessions with analysts." This "analyst relations strategy" requires IT

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vendors to spend substantial sums of money to purchase both a "seat," which entitles the holder

to analyst "inquiries," and to pay for Gartner's "consulting" services, also referred to as

Gartner's Strategic Advisory Services ("SAS"). Gartner instructs that if an IT vendor's

"inbound" interactions with analysts are twice its "outbound" interactions, "your mix is healthy."

76. Gartner actively and openly cross-sells its "consulting" services to IT vendors that

pay for its subscription-based research services. The analysts who provide those "consulting"

services are the same Gartner analysts who determine where an IT vendor is placed in the Magic

Quadrant.

77. The more a vendor spends on Gartner "consulting" services, the "healthier" its

relationship will be with the analysts who determine where that vendor will place in Gartner's

Magic Quadrant. By purchasing access to the analysts through Gartner's "consulting" services,

the IT vendor can achieve the requisite "healthy mix" of interaction with Gartner analysts that is

a substantial contributing factor to achieving favorable placement in Gartner's Magic Quadrant

reports.

78. Gartner's founder, Gideon Gartner, has commented on the "potential tainting" of

the "objectivity of [Gartner's] research." As Gideon Gartner stated:

The reason why people revile the Magic Quadrant is because it is misused . . . As a guideline for a bunch of amateurs it's one thing. But when all your clients live or die on the basis of whether Gartner Group puts you in the upper right hand corner in the -- or wherever -- that's really bad news. And when there's potential tainting of the objectivity of research because you have very large contracts with your vendors, with your customers, people will always come and complain. . . . Today, it is overused, misused and abused, terribly.

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79. Gartner's business model creates incentives for its analysts to: (1) place favorably

in Gartner's Magic Quadrants those IT vendors that pay substantial sums for Gartner's services;

and (2) not place favorably in its Magic Quadrants those IT vendors that do not pay substantial

sums of money for its services. The message is clear: IT vendors who pay substantial amounts

to Gartner for its services will be rewarded for their investment with favorable placement in

Gartner's influential Magic Quadrant report. The IT vendors who do not pay substantial

amounts for Gartner's services are encouraged to do so in the future to improve their placement

within the Magic Quadrant report.

80. Gartner itself is well aware of the commonly held belief in the IT industry that it

engages in "pay-to-play" business practices.

81. On October 8, 2009, a Gartner Vice President and research analyst felt the need to

"rant a little" about the commonly held belief that Gartner engages in "pay-to-play" business

practices "and can be bought." Numerous IT industry commentators responded to the Gartner

analyst's "rant" by raising further questions concerning the propriety of Gartner's business

practices.

82. One commentator recounted how, as an IT vendor, he has been told by Gartner

sales people that they "must pay between 30 and 50K$" to "enter the Magic Quadrant." As that

commentator wrote, responding to the proposition that Gartner does not engage in a pay-to-play

scheme:

Surely you're kidding.

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As a software vendor, we are told first hand by Gartner's salespeople that to enter the Magic Quadrant for our own market, we must pay between 30 and 50K$. How can you say you can't be bought then! This is just ludicrous. J. (Not my real name, withholding the name of my company out of fear of retribution).

83. Yet another commentator questioned Gartner's practice of cross-selling

"consulting" services to the subjects of its research reports:

To eliminate any concerns about vendor bias, how about Gartner eliminate consulting contracts and payments from vendors?

I assume this is a naive question.

However, such a move would provide the strongest possible financial incentive[s] and align with end users interest.

84. Another commentator, IT industry journalist Dennis Howlett, noted how "he gets

complaints every week of the 'pay to play' argument." As Howlett explained:

I get complaints pretty much every week of the 'pay to play' argument so whether you believe it or not is immaterial. It goes back to what @vinnie says about firm level issues and the corporate emphasis on aggressive selling or as one of your major clients puts it to me: tin cupping.

85. Howlett further elaborated on the IT industry complaints about Gartner's "pay-to-

play" business practices:

I would not repeat what I am told if it was one off or obvious sour grapes but I can say that some vendors I've spoken with see 'pay to play' (and not just Gartner but the analyst community as a whole) as an irritant to the point where I can immediately think of at least a handful that have voted with their wallets and said 'no more' after many years of engagement.

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86. The foregoing is just a sampling of the serious objections that have been raised

by IT industry vendors, observers, commentators, and journalists about Gartner's "pay-to-play"

business practices.

Gartner Creates The Impression That Its Magic Quadrant Reports Are Based On A Large Body Of Undisclosed Facts To Further Its "Pay-to-Play" Business Practices

87. Gartner's Form 10 -K filed with the SEC states that its business model "provides

multiple entry points and synergies that facilitate increased client spending on our research,

consulting services, and events." A critical part of Gartner's long-term strategy is to "increase

business volume with its most valuable clients, identifying relationships with the greatest sales

potential."

88. One such entry point to increase client spending are Gartner's Magic Quadrant

reports.

89. The purported analysis in Gartner's Magic Quadrant reports is founded upon a

large quantity of undisclosed facts and data that Gartner compiles during its research process and

knowingly withholds from publication.

90. Gartner's withholding of facts and data from its Magic Quadrant reports allows it

to market or "cross - sell" those undisclosed facts and data as part of its purportedly "fact-based"

consulting services. In so doing, Gartner implies to its audience that the assertions made in its

Magic Quadrant reports are supported by undisclosed facts known only to Gartner and which the

audience is unable to evaluate.

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91. To accomplish Gartner's stated goal of effectively "packaging, campaigning and

cross-selling [its] products and services," Gartner makes sure that its "most valuable clients" are

aware that its Magic Quadrant reports are founded upon "fact-based" analysis.

92. Thus, Gartner creates the impression that the research and analysis in its Magic

Quadrant reports is based on an undisclosed wealth of objective fact underlying its "fact-based"

analysis.

93. To create that impression, Gartner touts the large volume of facts and data that its

analysts compile as part of their research process. Gartner, however, does not disclose those

facts and data in its Magic Quadrant reports.

94. Under the "Why Gartner" section of its website, Gartner states that its "insights

are drawn from a critical fact base not available anywhere else."

95. In a slide presentation entitled "Gartner Delivers the Technology-Related Insight

Necessary for Our Clients to Make the Right Decisions, Every Day," Gartner asserts that its

analysts provide "[al ccurate and fact based coverage created by well-timed and delivered

vendor briefings and other analyst interactions."

96. In Gartner's brochure entitled "Inside Gartner Research," it describes its

"quantitative/qualitative blend" of research that "collect facts, findings and observations." In

that same brochure, Gartner explains how "[f]ocus group and survey results" help "refine its

[research] agenda." According to Gartner, "[p]ersonal interactions at events provide additional

insight, which feeds into our quarterly review and recalibration process."

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97. In that same document, Gartner describes the breadth of the fact gathering process

that supports its research:

[A]nalysts gather information through formal and informal surveys of IT users, technology providers and investors, business professionals, academicians and other researchers. For example, analysts survey technology users' investment and budget plans, and consult financial reports and government macroeconomic studies. Ideas are brainstormed within Gartner research communities.

By analyzing lots of data from lots of sources, Gartner can begin to see valid patterns emerging within markets. Assumptions are modified, new revelations are sparked, and scenarios are updated.

98. In Gartner's publication "The Gartner Research Process and Methodologies,"

Gartner posits that its analyses are "valid" because they "are grounded in a solid base of facts

verified by our own experienced analysts and others in business and academia."

99. In that same document, Gartner describes that nature of the undisclosed facts and

data that purportedly support the "conclusions" in its Magic Quadrant reports:

Our conclusions are based on the hard evidence we collect -- through our analysts and market surveys -- from the real-life experiences of our clients (who number 60,000 across 10,000 distinct organizations worldwide).

100. On the "Research and Methodologies" page of its website, Gartner references its

"access" to a "vast network of fact" that provides Gartner with the "facts, opinions and

projections to help clients make better decisions."

101. In a post on Gartner's website entitled "How not to use a Magic Quadrant,"

Gartner explained how a Magic Quadrant report reflects only a "tiny percentage" of what a

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Gartner analyst "actually knows" about a vendor. Gartner also explained that the vendor-specific

bullet points in Gartner's Magic Quadrant reports are based on "a pile of qualitative data." As

Gartner notes:

[A]n MQ [or Magic Quadrant Report] reflects only a tiny percentage of what an

analyst actually knows about the vendor. Its beauty is that it reduces a ton of quantified specific ratings (nearly 5 dozen, in the case of my upcoming MQ) to a point on a graph, and a pile of qualitative data to somewhere between six and ten one-or-two-sentence bullet points about a vendor.

102. Through these statements and disclosures, as well as others, Gartner intentionally

sought to create, and did create, the impression that the statements in its Magic Quadrant reports

were supported by a bevy of undisclosed objective facts and data.

103. Gartner uses the deliberate non-disclosure of the facts and data underlying its

Magic Quadrant reports to lure its vendor-clients into purchasing "consulting" services from the

same analysts who draft the Magic Quadrant report and who purport to have direct access to the

undisclosed facts and data.

104. These "pay-to-play" business practices are not new to the research analyst

industry. Regulators have attempted to eradicate as unscrupulous, unethical and against public

policy similar "pay-to-play" business practices among research analysts in the financial services

industry.

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It Is Well Established That "Pay-To-Play" Business Practices By Research Analysts Are Unscrupulous And Against Public Policy

105. Following the collapse of technology stocks in the 1990s and early-2000s, it came

to light that research analysts at some of Wall Street's largest investment banks had prepared

favorable research reports on companies that were also clients of the investment banks.

106. Many Wall Street investment banks employ research analysts that issue research

reports on the financial performance of corporations. Those analysts are commonly referred to

as financial analysts or research analysts.

107. Much like Gartner today, at the time, those same investment banks purported to

employ analysts and issue research reports that were independent, objective and free from bias.

108. However, in 2003, the SEC filed complaints against ten of the largest Wall Street

investment banking firms, in which it accused these firms and their analysts of engaging in

practices substantially similar to those that Gartner and its analysts currently practice.

109. The SEC alleged that six of these firms improperly "aligned" their research

analysts with their investment banking divisions in order to leverage their limited research

resources, generate new clientele, and/or offset the cost of research.

110. Similarly, Gartner improperly markets and cross-sells its "consulting" services to

IT vendors that are the subject of its analysts' research. Gartner's business model openly seeks

to: (1) "facilitate increased client spending on [its] research, consulting services and events;" (2)

"identify[] relationships with the greatest sales potential and expand[] those relationships by

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offering strategically relevant research and advice;" and (4) deepen "relationships with . . .

Research clients . . . through custom consulting engagements." Gartner further disclosed that the

foregoing initiatives "created additional revenue streams through more effective packaging,

campaigning and cross-selling of [its] products and services."

111. The SEC alleged that research analysts at all ten of the firms participated in

investment banking marketing efforts, including working with investment bankers to compile

"pitch" materials and attendance at industry "road shows."

112. Likewise, Gartner research analysts are involved in the "packaging, campaigning

and cross-selling of Gartner's products and services" to the same IT vendors that are the subject

of Gartner's research reports. Gartner analysts also attend "Gartner Symposium/ITxpo events

and Gartner Summit events" that "offer[] current, relevant and actionable technology sessions

led by Gartner analysts to clients and non-clients." Gartner clients and non-clients spend

thousands of dollars to attend and participate in these events in order to achieve a more favorable

ranking in Gartner's research reports, including its Magic Quadrant reports.

113. The SEC alleged that, at eight of the ten firms, research analyst conflicts of

interest resulted in analysts publishing research that was exaggerated, unwarranted, and/or

inaccurate.

114. Gartner's analysts suffer from the same disabling conflicts. IT vendors who

spend more on Gartner's services thus are similarly more likely to receive favorable rankings in

Gartner's research reports and, in particular, Gartner's Magic Quadrant reports.

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115. The SEC settled its enforcement actions against these ten Wall Street firms in

what the SEC titled the "Global Research Analyst Settlement." These firms, collectively, agreed

to the following terms:

a) $487.5 million in penalties;

b) $387.5 million as a disgorgement;

c) $432.5 million to provide the firms' clients with independent research;

d) $80 million to be used for investor education; and

e) An injunction against future violations of NASD and NYSE rules. 116. In addition, the Wall Street firms agreed to structural reforms in the operations of

research and investment banking divisions intended to prevent similar conflicts of interest from

occurring in the future. These reforms include:

a) Research and investment banking functions within the firm must be physically separated;

b) Firewalls must be put in place that are reasonably designed to prevent all improper communication between investment banking and research personnel;

c) Research analysts are not permitted to participate in efforts to solicit investment banking business, including pitches and "road shows";

d) Investment banking personnel are prohibited from playing any role in determining which companies are covered by research analysts;

e) Research analyst compensation may not be related, directly or indirectly, to investment banking revenue or input from investment banking personnel; and

f) Research analyst compensation must be based, in large part, on the quality and accuracy of the analyst's research.

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117. The SEC's settlement with these firms is but one example of its efforts to remove

the undue bias, conflicts of interest and unfair and deceptive business practices pertaining to

financial research analysts at large financial institutions.

118. The SEC, FINRA and the NYSE have since passed regulations specifically

prohibiting within financial research firms the same business practices, undue influence,

conflicts of interest, and structural biases that persist at Gartner to this day. See SEC Regulation

AC; FINRA Rule 2711; NYSE Rule 472. Those rules and regulations provide, among other

things, as follows:

a) Research analysts may not be paid any bonus, salary or other form of compensation that is based upon a specific investment banking transaction;

b) Research analysts are prohibited from participating in efforts to solicit investment banking business; and

c) Research analysts are prohibited from having communications with companies for the purpose of soliciting investment banking business.

119. The same concerns relating to research analyst conflicts of interest, client bias,

lack of objectivity, and cross-selling and marketing of other services that prompted the foregoing

rules and regulations apply with equal or greater force to Gartner's business practices for, among

other things, the following reasons:

a) The same Gartner analysts that draft Gartner's research reports also provide Gartner's consulting services;

b) Gartner encourages its research analysts to cross-sell its consulting services to its "most valuable" clients with the "greatest sales potential," which clients are also the subject of those same analysts' research reports; and

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c) Gartner recommends to the vendors that are the subject of its research reports that they spend substantial amounts of money on Gartner "consulting" services to achieve a "healthy mix" of interaction with Gartner's research analysts and improve their "analyst relationship."

120. The biases and conflicts of interest inherent in Gartner's business model, and

borne out by its business practices, result in Gartner knowingly and/or recklessly publishing false,

inaccurate, and biased research to the detriment of NetScout and the IT industry as a whole.

NetScout's Participation In The 2014 Magic Quadrant For NPMD 121. On July 29, 2013, Gartner announced its new Magic Quadrant for the Network

Performance Monitoring and Diagnostic market. Gartner stated that the NPMD market "had

risen to enable [infrastructure and operations] organizations to be proactive and strategic with

network management planning and strategy." According to Gartner, the NPMD market is

"focused on providing greater visibility of an organization's IT infrastructure from a network

perspective."

122. What Gartner refers to as the NPMD market is substantially similar, if not

identical, to the network performance management, or NPM, market that has existed for over

twenty years.

123. The authors of the announcement materials published on July 29, 2013,

"Introducing the Network Performance Monitoring and Diagnostic Market," were Vivek Bhalla,

Jonah Kowall, and Colin Fletcher.

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124. That same day, Gartner published its "Criteria for the New Magic Quadrant for

Network Performance Monitoring and Diagnostics." Bhalla, Kowall, and Fletcher also authored

the criteria. This publication listed "Inclusion Criteria" and "Nonproduct-Related Criteria" that

vendors were required to meet to be considered for the 2014 Magic Quadrant for NPMD.

125. In an email dated September 2, 2013, Gartner formally invited NetScout to

participate in the NPMD Magic Quadrant process. Included in, or attached to, the email were:

(1) Gartner's NPMD market definition; (2) the inclusion criteria discussed above (see supra

paragraph 124); (3) the evaluation criteria discussed above (see supra paragraphs 37-39); (4) a

research and process timeline; and (5) a vendor survey.

126. The vendor survey, which NetScout was to complete focusing on the disclosed

inclusion and evaluation criteria, consisted of 21 pages and three primary sections: (1) general

vendor background information; (2) NPMD product functionality; and (3) references and recent

win list.

127. On October 1, 2013, NetScout submitted to Gartner its 52-page vendor survey

response for the 2014 Magic Quadrant for NPMD, which detailed, among numerous other things,

NetScout's market experience, vision, selling strategy, revenue and income data, specifics

regarding its products' functionality, and a list of NetScout's U.S. and International patents.

128. Over the course of October, November, and December 2013, NetScout engaged in

a series of communications with Gartner analysts concerning, among other things, NetScout's

business, products, pricing, and positioning in the marketplace.

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129. On January 9, 2014, Gartner provided NetScout with a draft of its Magic

Quadrant Report for NPMD in which it categorized NetScout as a "Challenger." The draft report

contained the Magic Quadrant graphic and the written narrative, "Strengths," and "Cautions"

pertaining to NetScout. It did not contain the definitions of the four categories of rankings:

Leaders, Challengers, Visionaries, and Niche Players.

130. After January 9 and prior to March 6, 2014, NetScout communicated with Gartner

analysts, Vivek Bhalla, and Colin Fletcher, Gartner's Chief Executive Officer, Eugene Hall, and

Gartner's ombudsperson, Nancy Erskine. During these communications, NetScout addressed, in

significant detail, each of the false statements in Gartner's draft Magic Quadrant report. In

particular, NetScout explained to Gartner how the statements regarding NetScout were false,

including the "Cautions" attributed to NetScout, the content of the narrative, the rankings, and

the weighting of the Magic Quadrant draft report. NetScout provided to Gartner a statement of

the relevant facts and evidence to counter each one of Gartner's false statements, and it

highlighted the key areas in which NetScout, and its products, excel as leaders. In addition,

NetScout expressed its concern with the fairness and accuracy of Gartner's assessment.

131. Despite these detailed communications, which provided Gartner with actual

knowledge of the falsity of its statements about NetScout, Gartner refused to remove the false

statements concerning NetScout from its report.

132. Upon learning that Gartner was unwilling to remove its false statements from its

Magic Quadrant Report for NPMD, NetScout's CEO asked Gartner to remove NetScout entirely

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from that report. Gartner's ombudsperson stated to NetScout's CEO that Gartner was not willing

to remove NetScout from the report because NetScout was such a large player in the NPM

market that Gartner's report would lack credibility if NetScout were to be removed.

133. On March 6, 2014, Gartner published the Magic Quadrant Report for NPMD,

which contained the same false statements of fact included in the prior draft it had sent to

NetScout. That report included a definition of "Challengers" that contained additional false

statements of fact concerning NetScout, and evidenced biased analysis skewed in favor of other

Gartner clients.

134. The Magic Quadrant Report for NPMD was widely disseminated to subscribers of

Gartner's research reports through its website, as well as through other means. Many of the

subscribers, entities and persons who received and read Gartner's Magic Quadrant Report for

NPMD are either current NetScout customers or potential customers of NetScout's products.

135. The published version of the Magic Quadrant Report for NPMD was purportedly

authored by research analysts Jonah Kowall, Vivek Bhalla, and Colin Fletcher.

136. The published version of the Magic Quadrant Report for NPMD contained the

same false statements of fact that were included in the draft report that Gartner sent to NetScout

on January 9, 2014, as well as additional false statements of fact about NetScout.

137. Gartner's Magic Quadrant Report for NPMD states the following about vendors

placed in the "Leaders" quadrant:

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The Leaders quadrant represents those vendors that are pushing the NPMD market forward, including those with comprehensive portfolios and the ability to handle multiple application and technology types. They offer a choice of hardware or software appliances for optimum flexibility. Additionally, the use of SaaS delivery methods within portfolios gives enterprise IT teams more choices, while making formerly premium priced NPMD solutions attainable by midsize organizations.

138. Gartner's Magic Quadrant Report for NPMD states the following about vendors

placed in the "Challengers" quadrant:

Challengers consist of those with high market reach and large deployments. Once leaders in the network performance monitoring market, they are currently struggling to deal with new technical demands and rising expectations. These established NPMD vendors bring a substantial installed base, but also architecture, feature sets and pricing structures that require modernization (often in progress) to better compete with those in the Leaders quadrant.

139. In the Magic Quadrant Report for NPMD, Gartner placed NetScout in the upper

left corner of the Magic Quadrant grid, also known as the "Challengers" quadrant.

140. The Magic Quadrant Report for NPMD listed the following three "Cautions"

concerning NetScout:

n NetScout has limited ability to expand beyond its network management heritage, which would be the next logical step (for example, into APM or IT operations analytics).

n Offering only a hardware-based deployment model limits NetScout's ability to address growing software and SaaS solution demand.

n NetScout is perceived as a conservative stalwart in the NPMD space, and lacks the reach and mind share that many smaller competitors have.

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141. Gartner placed NetScout competitors Riverbed, JDSU-Network Instruments, and

Fluke Networks in the "Leaders" quadrant.

142. Riverbed, JDSU-Network Instruments, and Fluke Networks spent a significant

amount on Gartner's "consulting" services.

143. NetScout's failure to pay a sufficient amount for Gartner's services, or otherwise

purchase enough access to Gartner's analysts to achieve the requisite "healthy mix" of

interaction, was a substantial contributing factor in NetScout not being ranked in the "Leaders"

quadrant of the Magic Quadrant Report for NPMD.

144. As one Gartner analyst had previously told NetScout's President and Chief

Executive Officer, "NetScout is not going anywhere because it does not spend enough on

marketing." NetScout's CEO reasonably understood this statement to mean that NetScout

should spend more money on Gartner's services.

145. By placing NetScout in the less desirable "Challengers" quadrant, Gartner

effectively punished NetScout for failing to purchase a sufficient amount of Gartner's services.

Gartner has attempted to use its influence to force NetScout to purchase additional Gartner

services sufficient to move NetScout to the "Leaders" quadrant, or suffer continued harm to its

business and reputation in the industry. Reduced to essentials, NetScout must now either "pay-

to-play" with Gartner, or continue to suffer lost business opportunities, and damage to its

reputation as a result of being ranked as a "Challenger" in Gartner's influential Magic Quadrant

report.

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146. Consequently, Gartner's placement of NetScout in the "Challengers" quadrant

was part of a deceptive, oppressive, unethical and unscrupulous trade practice that violates public

policy and caused NetScout substantial injury and damages.

Gartner's Magic Quadrant Report For NPMD Contains False And Defamatory Statements About NetScout, Its Products And Its Business

147. Gartner's Magic Quadrant Report for NPMD is defamatory because it contains

numerous defamatory false statements of fact about NetScout, its products and its business.

Gartner published the Magic Quadrant Report for NPMD with actual malice, i.e., with

knowledge of the falsity of the defamatory statements of fact about NetScout or with reckless

disregard for the falsity of those statements.

148. A reasonable reader of the Magic Quadrant Report for NPMD would understand

NetScout's placement in the "Challengers" quadrant as defamatory, because it indicates that

NetScout does not meet the criteria for a "Leader" set forth in the Magic Quadrant Report of

NPMD and quoted above.

149. The Magic Quadrant Report for NPMD states that "Challengers" are "[o]nce

leaders in the network performance monitoring market." A reasonable reader would interpret

that statement as a defamatory factual assertion that NetScout was "once," but is no longer, a

leader in the NPM market. Gartner's statement is demonstrably false for the following reasons:

a) NetScout's network performance management products and technology are unmatched in the industry;

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b) NetScout offers sales, support, and services in more than 30 countries, yielding international revenues for fiscal year 2014 of approximately $93 million -- more countries and international revenue than any competitor in the NPM market;

c) NetScout has had over nine years of sustained growth and profitability, reporting record revenue and net income in fiscal year 2014, reporting nearly $400 million in revenue, 15% growth in revenue, and 21% growth in net income;

d) The three NetScout competitors that Gartner placed in the "Leaders" quadrant, Riverbed, Fluke Networks, and Network Instruments, generated approximately $100 million, $50 million and $45 million in NPM revenue in 2013, while all three experienced limited, if any, growth in revenue for 2013;

e) According to technology research firm IDC, NetScout has the largest share of the NPM market at 13.3% (which it has held for four years), grew 16.3% in 2012 against market growth of 3.1%, generates more revenue in the NPM market than any of its competitors, and is one of "the three market leaders" in NPM;

f) According to research technology research firm Frost & Sullivan, NetScout has the largest share of the NPM for Enterprises market at 30.8% and "NetScout is expected to continue dominating the total market throughout the forecast period;"

g) According to technology research firm TechNavio, "NetScout is the biggest player in the Global Network Performance Management market" and has the largest share of the NPM market at 11-13%;

h) According to Gartner's own NPM market share analysis, NetScout had the second largest share of the NPM market at 18.2% in 2013 -- rising from the third largest market share in 2011 and the fifth largest in 2010 -- with 11.9% market share growth (or nearly fifteen times faster than the growth of the NPM market); and

i) NetScout products are deployed in 92 of the Fortune 100, ten of the top ten financial services firms, ten of the top ten pharmaceutical companies, ten of the top ten airlines, all five branches of the U S military, ten of the top ten

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aerospace and defense contractors, and nineteen of the top twenty commercial banks.

The foregoing facts were available and/or known to Gartner at the time it published the Magic

Quadrant Report for NPMD.

150. Gartner also implied that it was in possession of and knew undisclosed facts

supporting its assertion that NetScout was "[o]nce [a] leader[] in the network performance

monitoring market." That implication was created by, among other things, Gartner's repeated

claims that its research reports are supported by a large volume of undisclosed facts and data

derived from surveys and interviews of "IT users, technology providers and investors, business

professionals, academicians and other researchers," many of which are NetScout's customers, as

well as Gartner's assertion that the statements in its Magic Quadrant reports rest upon "a pile of

qualitative data" and reflect but "a tiny percentage" of what a Gartner analyst "actually knows"

about the IT vendors that are the subjects of its Magic Quadrant reports.

151. The Magic Quadrant Report for NPMD further states that, as a "Challenger,"

NetScout is "currently struggling to deal with new technical demands and rising expectations."

A reasonable reader would interpret that statement as a defamatory factual assertion that

NetScout's research and development capabilities are technically deficient and that it is

otherwise unable successfully to adapt to the changing technological demands of the NPM

market and its broad customer base. That assertion is demonstrably false for all of the reasons

identified in paragraph 149(a)-(i) as well as, among other things, the following additional reasons:

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a) NetScout has a more than thirty-year history of focused innovation in performance management technology and, in many ways, is responsible for the creation of the NPM market itself;

b) NetScout has over 300 employees who are dedicated to research, development and support, and invests more than 16% of its revenue in R&D initiatives;

c) NetScout operates numerous development centers across the globe and owns over eighty U.S. patents (a majority of them related to the NPM industry), one of the most recent of which was granted in November 2013 for NetScout's breakthrough Adaptive Session Intelligence Technology; and

d) NetScout's network performance management products and technology are unmatched in the industry.

The foregoing facts were available and/or known to Gartner at the time it published the Magic

Quadrant Report for NPMD.

152. Gartner also implied that it was in possession of and knew undisclosed facts that

supported its assertion that NetScout is "currently struggling to deal with new technical demands

and rising expectations." That implication was created by, among other things, Gartner's

repeated claims that its research reports are supported by a large volume of undisclosed facts and

data derived from surveys and interviews of "IT users, technology providers and investors,

business professionals, academicians and other researchers," many of which are NetScout's

customers. The implication is further fostered by Gartner's assertion that the statements in its

Magic Quadrant reports rest upon "a pile of qualitative data" and reflect but "a tiny percentage"

of what a Gartner analyst "actually knows" about the IT vendors that are the subjects of its

Magic Quadrant reports.

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153. The Magic Quadrant Report for NPMD further states that, as a "Challenger,"

NetScout has "architectures, features sets and pricing structures that require modernization (often

in progress) to better compete with those in the Leaders quadrant." A reasonable reader would

interpret the statement as a defamatory factual assertion that NetScout's products and pricing are

outdated and that its products are technologically inferior to the products of its competitors listed

in the "Leaders" quadrant. Gartner's statement impugns NetScout's products as comparatively

inferior in fundamental respects, including but not limited to the basic design of those products,

their capabilities, and their usability.

154. Gartner's assertion is demonstrably false, as NetScout's NPM product offerings

are the most modern and technologically advanced in the NPM industry by any objective

measure. Gartner's statement is also false and defamatory for all of the additional reasons

identified in paragraphs 149 (a)-(i) and 151 (a)-(d). The statement was made by Gartner with

knowledge of its falsity or with reckless disregard for the truth.

155. Gartner also implied that it was in possession of and knew undisclosed facts that

supported its assertion that NetScout's "architectures, features sets and pricing structures . . .

require modernization," i.e., that NetScout's products are outdated, lack key feature sets, are

inferior to competing products, and are not competitively priced. That implication was created

by, among other things, Gartner's repeated claims that its research reports are supported by a

large volume of undisclosed facts and data derived from surveys and interviews of "IT users,

technology providers and investors, business professionals, academicians and other researchers,"

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many of which are NetScout's customers. The implication is further fostered by Gartner's

assertion that the statements in its Magic Quadrant reports rest upon "a pile of qualitative data"

and reflect but "a tiny percentage" of what a Gartner analyst "actually knows" about the IT

vendors that are the subjects of its Magic Quadrant reports.

156. In addition, Gartner's statement is false because NetScout's product pricing does

not require modernization as compared to its competitors' pricing. NetScout's product pricing

sets the benchmark in the NPM market. Each of the NetScout competitors that Gartner placed in

the "Leaders" quadrant emulate NetScout's product pricing.

157. In the "Cautions" section of Gartner's Magic Quadrant Report for NPMD, it

states that NetScout has a "limited ability to expand beyond its network management heritage."

A reasonable reader would interpret that statement as a defamatory factual assertion that

NetScout lacks the resources, motivation, wherewithal and resolve to expand into new markets

beyond its core NPM market. Gartner's statement is a demonstrably false statement of fact. Not

only does NetScout have the "ability" to expand into markets outside of its core NPM market, it

already had expanded into other markets, including, among other things, the markets for

Application Performance Management ("APM") and Cyber Threat Monitoring.

158. As another testament to NetScout's vision and longstanding leadership in the

NPMD space, and as Gartner knew full well, in June 2013 -- eight months prior to Gartner's

publication of the Magic Quadrant Report for NPMD NetScout launched nGeniusONE with

NetScout's patented Adaptive Session Intelligence technology. nGeniusONE with ASI was the

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culmination of a multi-million dollar research and development effort, spanning over two years.

nGeniusONE is a single, unified analytics platform with myriad analytical feature sets that

provide both application and network diagnostics in a simple, unified user interface. Within just

one year of its introduction, NetScout was awarded a patent for ASI and successfully branched

out into adjacent segments, including APM and Voice Monitoring. In addition, during the same

time, this new solution further extended NetScout's already formidable position in the NPM

space. During the last 12 months, NetScout's annual revenues increased by another $50 million,

to reach $400 million.

159. NetScout's ASI technology provides a depth and breadth of analytical capability,

and scalability, far beyond any competing product offered by any NetScout competitors by any

objective measure. As Gartner states, "Adaptive Session Intelligence allows the [NetScout's]

solution to scale toward support of 40 GbE and 100 GbE environments, while optimizing storage

requirements and enhancing the visibility data." "Scaling" refers to an NPM product's ability to

operate successfully in a fast network environment (i.e., a network that is 40 GbE or faster) in

which network traffic is very high. In today's high-traffic network environments, an NPM

product's ability to scale in their environment and continue to function as the network expands is

crucial. None of NetScout's competitors' products, including those competitors placed in the

"Leaders" quadrant, offers the scalability of NetScout's products.

160. NetScout has also expanded "beyond its network management heritage" by

successfully entering the service provider market. Service providers include, among others,

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cellular, cable, and interne providers. Since 2009, NetScout's service provider business has

grown by 20% annually. Today, NetScout's products are deployed in more than 165 service

providers in over 48 countries, and in all twenty of the twenty largest service providers.

Gartner's statement of fact is also false and defamatory for all of the reasons identified in

paragraphs 149 (a)-(i) and 151 (a)-(d), and paragraphs 157-58.

161. Gartner also implied that it was in possession of and knew undisclosed facts that

supported its assertion that NetScout has a "limited ability to expand beyond its network

management heritage," i.e., that NetScout lacks the resources, motivation, wherewithal or

resolve to grow as a company and expand into new markets beyond its core NPM market. That

implication was created by, among other things, Gartner's repeated claims that its research

reports are supported by a large volume of undisclosed facts and data derived from surveys and

interviews of "IT users, technology providers and investors, business professionals,

academicians and other researchers," many of which are NetScout's customers. That implication

is further fostered by Gartner's assertion that the statements in its Magic Quadrant reports rest

upon "a pile of qualitative data" and reflect but "a tiny percentage" of what a Gartner analyst

"actually knows" about the IT vendors that are the subjects of its Magic Quadrant reports.

162. In the "Cautions" section of Gartner's Magic Quadrant Report for NPMD,

Gartner states that NetScout offers "only a hardware-based deployment model" that "limits its

ability to address growing software and SaaS solution demand." A reasonable reader would

interpret that statement as a defamatory factual assertion that NetScout does not offer a software

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or Software as a Service ("SaaS") solution for NPM, while its competitors ranked in the

"Leaders" quadrant do offer such solutions. Gartner's statement is demonstrably false. First,

NetScout does offer software-based solutions for NPM. NetScout specifically informed

Gartner's research analyst that it offers a software-based solution for NPM. Gartner's research

analyst did not refute the fact that NetScout offers a software-based solution, but rather stated

that "well, we have to have some cautions for NetScout."

163. Second, each of the NetScout competitors that Gartner placed in the "Leaders"

quadrant offers a "hardware-based deployment model," yet Gartner did not include a similar

"Caution" for any other NetScout competitor in the Magic Quadrant Report for NPMD.

Gartner's failure to include a "hardware-based deployment model" "Caution" for NetScout's

competitors creates the false and defamatory impression that NetScout's competitors' product

offerings are superior because they are not "hardware-based." In fact, each of the competitor

companies that Gartner placed in the "Leaders" quadrant uses primarily a "hardware-based

deployment model."

164. Third, none of the NetScout competitors that Gartner placed in the "Leaders"

quadrant offer a SaaS solution for NPM, yet Gartner did not include a similar "Caution" for any

other NetScout competitor in the Magic Quadrant for Report for NPMD. Gartner's failure to

include a SaaS "Caution" for NetScout's competitors creates the false and defamatory

impression that NetScout's competitors' product offerings are superior because they offer a SaaS

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solution for NPM. In fact, none of the competitor companies that Gartner placed in the

-Leaders" quadrant offer a SaaS solution.

165. Gartner also implied that it was in possession of and knew undisclosed facts

supporting its assertion that NetScout offers "only a hardware-based deployment model" that

"limits its ability to address growing software and SaaS solution demand." That implication was

created by, among other things, Gartner's repeated claims that its research reports are supported

by a large volume of undisclosed facts and data derived from surveys and interviews of "IT users,

technology providers and investors, business professionals, academicians and other researchers,"

many of which are NetScout's customers. The implication is further fostered by Gartner's

assertion that the statements in its Magic Quadrant reports rest upon "a pile of qualitative data"

and reflect but "a tiny percentage" of what a Gartner analyst "actually knows" about the IT

vendors that are the subjects of its Magic Quadrant reports.

166. In the "Cautions" section of Gartner's Magic Quadrant Report for NPMD, it

states that NetScout is "perceived as a conservative stalwart in the NPMD space, and lacks the

reach and mind share that many smaller competitors have." A reasonable reader would interpret

that statement as a defamatory factual assertion that the size and diversity of NetScout's

customer base is inferior to that of its smaller competitors, and that NetScout's brand and

products are not as well known within the NPMD market. Gartner's statement is a false and

defamatory statement of fact. As alleged in paragraphs 149 (a)-(i) and 151 (a)-(d), NetScout's

revenue, revenue growth, market share, research and development expenditures, and customer

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deployments all greatly exceed those of its "smaller competitors." For these reasons, as well as

all of the reasons identified in paragraphs 149 (a)-(i) and 151 (a)-(d), Gartner's statement is

demonstrably false.

167. Also, Gartner's statement that NetScout "lacks the reach" of "many of its smaller

competitors" directly contradicts its own statement included elsewhere in the Magic Quadrant

Report for NPMD that NetScout has "high market reach and large deployments." These

contradictory statements of fact evidence that: (1) NetScout knew that its statement that

NetScout "lacked reach" was false and defamatory when made; and (2) Gartner's "Caution"

statements, as well as its assertion that NetScout meets the definition of a "Challenger," were

pretext for placing NetScout within the "Challengers" quadrant. The actual reason that Gartner

placed NetScout in the "Challengers" quadrant was because NetScout did not spend enough

money on Gartner's services.

168. Gartner also implied that it was in possession of and knew undisclosed facts

supporting its assertion that NetScout is, "perceived as a conservative stalwart in the NPMD

space, and lacks the reach and mind share that many smaller competitors have." That

implication was created by Gartner's repeated claims that its research reports are supported by a

large volume of undisclosed facts and data derived from surveys and interviews of "IT users,

technology providers and investors, business professionals, academicians and other researchers,"

many of which are NetScout's customers, as well as Gartner's assertion that the statements in its

Magic Quadrant reports rest upon "a pile of qualitative data" and reflect but "a tiny percentage"

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of what a Gartner analyst "actually knows" about the IT vendors that are the subjects of its

Magic Quadrant reports.

169. Gartner knew that the foregoing defamatory statements of fact it published about

NetScout were false, or acted with reckless disregard of the falsity of its assertions. The

statements have caused harm to NetScout's business and reputation, and were calculated to cause

harm to NetScout within the IT industry and the NPM, NPMD and APM markets.

170. As one former senior account manager at Gartner has stated, the fact that

Gartner's Magic Quadrant has been published with "NetScout given a position that is not

representative of its true capabilities . . . will hurt NetScout and its sales figures."

171. Since Gartner published the Magic Quadrant Report for NPMD, and as a direct

result of defamatory statements in that report, potential NetScout customers have excluded

NetScout from their request for proposal processes through which potential NetScout's

customers procure NPM, APM and NPMD products. On at least one occasion, a potential

NetScout customer that had previously stated its intent to procure NPM products exclusively

from NetScout informed NetScout that it would have to consider procuring products from

NetScout's competitors after reading the defamatory statements in the Magic Quadrant Report

for NPMD.

172. The false and defamatory statements in Gartner's Magic Quadrant Report for

NPMD have damaged and interfered with NetScout's reputation with its customers, and have

forced NetScout's management and sales force to devote time and resources to counteracting

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those statements in the IT industry. As a result, NetScout risks losing current and future business,

and faces pressure from potential customers to discount its products to compete for future

business. For example, a major financial services firm, and a current NetScout customer,

currently is considering making a large technology purchase from two of the NetScout

competitors that Gartner placed in the "Leaders" quadrant in the Magic Quadrant Report for

NPMD based on the fact that Gartner ranked NetScout as a "Challenger."

173. As a direct and proximate result of Gartner's statements, NetScout has incurred

damage to its reputation, lost future business prospects, and been forced to expend additional

time, money and effort to counteract the injurious effect of Gartner's defamatory statements on

its business and reputation.

FIRST COUNT (Violation of CUTPA, Conn. Gen. S