By way of follow-up, I wanted to answer the questions that I didn’t get to here, so that everyone can share. I haven’t answered absolutely every one here – I don’t have a figure for market growth rate, for example.
Q: Do law firms, enterprises, etc prefer choosing a service that is on-premise vs. SaaS? Why?
I answered this on the call, but it obviously varies depending on the size of the company involved, the amount of times they’ve done eDiscovery, whether they’re a law firm or not. Bear in mind that the early days of eDiscovery were dominated and to some extent still are – by services companies like Fios and Kroll Ontrack that provide outsources data processing. So the common FUD tactic used by on-premise vendors to knock SaaS, i.e. that customers won’t like their data leaving their premises and ending up on someone else’s server, doesn’t- or at least shouldn’t – really apply here. Sensitive data has been removed from organizations for eDiscovery purposes for more than a decade like that already.
The larger companies will, on the whole, still prefer eDiscovery to be handled in house in terms of the software they use, though you should remember they almost always engage outside counsel, and the two of them need to be working with compatible systems, so large organizations are starting to have purchasing influence over the technology used by law firms.
One key thing for vendors to remember is that if they’re selling their eDiscovery as something to be used in a reactive eDiscovery process which almost all of them are to one extent or another – it’s hard to sell a reactive product to the enterprise if it isn’t quick to deploy — and that’s where SaaS and appliance have an advantage.
Q: You mentioned IT organization not be capable of pulling together different apps…do you see this a benefiting ECM vendors re: single repository play or is a federation across the data stores more likely?
If ECM vendors can solve a problem of both the legal and IT department simultaneously then it obviously should be good for them. How they do that could be either way. Some of the larger vendors will go all out tp optimize their own repositories so that the full benefits of their particular eDiscovery offering can only be had by putting all the content in their repositories. But others are proving successful with ‘manage in place’ federation architectures too. It’s not a case of one or the other winning overall, we don’t think.
Q: The sector seems quite fragmented do you envision a lot of consolidation? Which vendors do you think could possibly be acquired and how should a buyer consider picking the right vendor?
A: We envisage some consolidation certainly, though a lot has already happened. I’m not going to name names on the blog, beyond what I said on the call, that among acquirers we would expect HP and Symantec to feature, though there are others mentioned in the report. There are also segments and companies mentioned as potential targets in the report too.
As for how a purchaser should pick a vendor – I’m assuming the questioner means in the light of potential consolidation – then you need to do some homework on the stage the company is at, the amount of investment its taken on and has left, profitability or otherwise, the history of the management and so on. At the end of the day, if it gets bought, it then depends which company it gets bought by; if it’s one that just grabs the customers, I’m sure competitors will be offering favorable deals to switch before the ink is dry on the deal.
Q: One of the companies I noticed was not mentioned in the presentation was H5? Is this a company that you follow? How is the business model of this firm different?
Yes, H5 is in the report. It does have a slightly different model from other software or service providers we’ve looked at in that it offers a combination of consulting services and automated review as an alternative to outside attorney review. Plus, it offers up-front scope model, rather than billable hours.
Q: How does eDiscovery tie into other Security tech like Log Managements, or storage of Emails, IM etc? Should eDiscovery be the central control point for Enterprise security?
This is a very interesting question. And one that I’ll deal with in a separate post soon. Watch this space.
Q: How important do you feel legal holds solutions are?
They’re an important part of the preservation stage of the EDRM, but technically not that hard ti implement. Autonomy and Recommind are two vendors that have recently introduced such a function into their eDiscovery offerings.
Q: How do you think demand for eDiscovery solutions will be impacted in tight IT spending environment?
There will be tension between eDiscovery as capital expenditure versus operational expenditure, as there always is, but obviously large scale cap ex spending is something all organizations are trying to avoid right now. It’s hard to see however how in highly litigious industries eDiscovery can be anything other than non-discretionary spending. There will be pricing pressure on some vendors and companies will do whatever they possible can to reduce data volumes if they’re still being charged by the gigabyte. That model will also be called into question by the largest customers.
Q: Could you comment on the kind of data that is fair game in a discovery process? for example, what about IMs or even data that is stored in the cloud like salesforce.com transactions?
A: Anything stored electronically is fair game in an eDiscovery process. With something like data in a Salesforce.com database that’s obviously a lot easier to extract than if some instant messaging systems, And if your organization relies on one of the free pubic IM tools, like AIM, then you could have great difficulty retrieving it, unless the logs are stored locally on desktops, as it can be quite easily, with iChat on Macs, for example.
Q: Where can I get access to this presentation and report?
The report information is here and the presentation will be emailed to you – drop us a note at this address. The webinar will be available for download very soon too. I’ll put a link up here as soon as I have it.
Q: Why can’t I hear anything?
A: We got this question a few times. So I’d like to apologize and say thanks to all of your that persevered with our audio problems – we couldn’t get he webinar tool’s audio channel to work, despite it having worked perfectly in two prior run-throughs. I have much more sympathy than before now for vendors doing live demos – I feel your pain