This year’s main LegalTech show is now over – three days in wintry New York City and all the challenges that brings. Before I head back to London, here are my quick thoughts.

I managed to shoehorn 24 meetings into my time at the Hilton and only managed to see one session, Chris Dale’s judge’s panel at the end, which was performed as a play, and very good it was too!  Not sure if anyone managed to get a picture of Judge Simon Brown brandishing a copy of e-Discovery for Dummies (he was making a point, rather than consulting it for advice, obviously!) but it would make for an amusing image.

I initially was swamped with vendors showing me new user interfaces rather than underlying innovations in their engines, however there were a few innovative things to note. I’ll put more of that in a longer note for our clients shortly.

I was struck by the number of software and service providers landing or expanding in the UK. They clearly see it as a growth opportunity in itself and of course a bridgehead to the broader EU market. They’re also curious about the risks and opportunities caused by the introduction in April of the UK Bribery Act.

Service providers are placing a bit less emphasis on self-built technology in the past, more settling on the best of breed tools.

Billing by the hour is passé it is almost all volume based pricing, or at least volume-based or flat rate pricing is almost always offered.
On the technology front, if your processing engine can’t process 1TB a day, you’re falling behind the curve.

And coming back to the user interface point at the start. It’s worth remembering amongst all this technology that for many lawyers, a new UI is what they really need right now. They are finding it hard to keep up with the latest text analysis tools and are being assaulted from so many angles with technology, competition, the threat to their business caused by in-sourcing of e-Discovery that some really do want just a well-designed user interface on their review tool that clearly shows how much the review will cost and  how far along its progressed.

Our clients will have seen our preview of 2011 last week. For those that aren’t (yet!) clients and therefore can’t see the whole 3,500-word report, here’s the introduction, followed by the titles of the sections to give you an idea of what we think will shape the information management market in 2011 and beyond. Of course the IT industry, like most others doesn’t rigorously follow the wiles of the Gregorian calendar, so some of these things will happen next year while others may not occur till 2012 and beyond. But happen they will, we believe.

We think information governance will play a more prominent role in 2011 and in the years beyond that. Specifically, we think master data management and data governance applications will appear in 2011 to replace the gaggle of spreadsheets, dashboards and scorecards commonly used today. Beyond that, we think information governance will evolve in the coming years, kick-started by end users who are asking for a more coherent way to manage their data, driven in part by their experience with the reactive and often chaotic nature of e-discovery.

In e-discovery itself, we expect to see a twin-track adoption trend. While cloud-based products have proven popular, at the same time, more enterprises buy e-discovery appliances.

‘Big data’ has become a bit of a catchall term to describe the masses of information being generated, but in 2011 we expect to see a shift to what we term a ‘total data’ approach to data management, as well as the analytics applications and tools that enable users to generate the business intelligence from their big data sets. Deeper down, the tools used in this process will include new BI tools to exploit Hadoop, as well as a push in predictive analytics beyond the statisticians and into finance, marketing and sales departments.

SharePoint 2010 may have come out in the year for which it is named, but its use will become truly widespread in 2011 as the first service pack is release and the ISV community around it completes their updates from SharePoint 2007. However, we don’t think cloud-based SharePoint will grow quite as fast as some people may expect. Finally, in the Web content management (WCM) market – so affected by SharePoint, as well as the open source movement – we expect a stratification between the everyday WCM-type scenario and Web experience management (WEM) for those organization that need to tie WCM, Web analytics, online marketing and commerce features together.

• Governance family reunion: Information governance, meet governance, risk and compliance; meet data governance….
• Master data management, data quality, data integration: the road to data governance
• E-discovery post price war: affordable enough, or still too strategic to risk?
• Data management – big, bigger, biggest
• Putting the BI into big data in Hadoop
• The business of predictive analytics
• SharePoint 2010 gets real in 2011
• WCM, WEM and stratification

And with that we’d like to wish all readers of Too Much Information a happy holiday season and a healthy and successful 2011.

I knew that as soon as I wrote my updated look on which company Autonomy might buy next something would come along to diminish the value of all my hard work. I had expected it to be an acquisition, but instead Autonomy surprised me yesterday afternoon with an announcement that after being in talks regarding an acquisition for “several months,”

Recent developments within these talks have given rise to an additional opportunity that warrants further examination which could give rise to an acquisition process that exceeds our original planned time scale.

In other words, it’s not going to happen any time soon.

As an announcement it’s a bit opaque and strangely structured, coming as the second part of an announcement that also told announced its Capital Markets Day would be on Monday, November 29.

It could mean:

• Autonomy is attempting to buy part of a business and instead is now looking to expand into another part or perhaps all of the business. For that to be the case ther first part must have been quite a small deal as Autonomy’s kitty is limited to about $1bn in total.
• Autonomy has identified a different company that it wants to buy.
• Autonomy itself has had an offer to be acquired.

This is all of course speculation. But one thing’s a bit more certain: it will probably make a dent in the company’s Q4 results, which were expected to include a boost from an acquisition that now doesn’t look like happening. Whether that means the company will miss the revised expectations it set in the Q3 call, we’ll have to wait and see.

In our report we wondered whether the company’s health care announcement, including a new product called Auminence may be used as some sort of alternative kicker in the quarter, in lieu of an acquisition. As we said, the product came out of the blue, as do many Autonomy products and appears to us to be a repackaging of IDOL with some added diagnosis checklists on top.

The shares fell 6% yesterday after the announcement came out, all of that coming late in the day as the announcement was made at 3.51pm London time. Again, that’s slightly strange timing. The shares were creeping back up this morning.

UPDATE: Autonomy clarified its statement with this Q&A:

Would it be right to interpret from today’s announcement regarding the acquisition timetable (Update on Acquisition) that the deal you are negotiating has got larger?

No, the deal remains the same size. The statement clearly refers to the timescale.

So it’s the same company, it will just take longer, which makes most sense, I guess.

Yesterday I attended the 6th Annual e-Disclosure Forum at Canary Wharf in London, organized by the globe-trotting triumvirate of Chris Dale, Browning Marean and George Socha. It was a good program, with an audience comprising a mix of lawyers, litigation support professionals, IT practitioners, tech software and service providers and other assorted folks, like myself. It’s the second year I’ve attended and these were the key themes I picked up on:

• Practice Direction 31B – not surprisingly this was a major issue throughout the day, considering may of those present for instrumental in drafting it, including Chris Dale and Senior Master Steven Whitaker (among others) and it only passed into the rules on October 1.  For those that don’t know, 31B amended the rues of civil procedure in the UK (the rough equivalent of the Federal Rules of Civil Procedure in the US), as they pertain to the disclosure of electronic documents (which can of course include email and other forms of communications). One aspect of the changes is a questionnaire to be used in more complex cases that involve a large number of documents. Not only does it sound to us like a sensible way of helping to to contain and get parties prepared for the case management conference (meet and confer in US parlance), but quite frankly it could be useful starting point  for organizations simply to looking to get their house in order to get prepared for future litigation.
• Another key theme was the effect on recent UK cases on the way parties are now cooperating in case management meetings. One speaker, Jeremy Marshall, head of commercial litigation at Irwin Mitchell said that in his experience there’s a vast difference in terms of what happened before landmark cases such as Earles vs Barclays Bank in 2009 and the Digicel vs Cable & Wireless case in 2008 and what happens now. Companies know that if they don’t cooperate to make sure the necessary documents are disclosed, they could be penalized by the court, even if they win the case. For more on the Earles case and what it means regarding the destruction of documents see Chris Dale here.
• Cloud. I had a lot of conversations with IT and legal people at the conference and they’re still not seeing the necessary granularity in service level agreements (SLAs) from cloud service providers. If you need to search your data for the purposes of e-Disclosure, it’s not clear in what format the data will come back to you or even if such a search is possible. That’s a bit of a deal-breaker, over and above any trepidation firms might feel about using cloud for any perceived security issues.
• In general I detected a much clearer understanding on the part of US attendees of the issues in the UK market. Gone are the days it seems of assuming that the exhaustive e-Discovery process in the US is suitable without any alteration in the UK. The two countries obviously share a common law tradition, but like so many other things, there are distinct differences in the way litigation is done and that – aided in part by Chris Dale et al’s work – is now getting through to US vendors, which after all, dominate the market from the technology point of view.
• Tips for next year to the organizers?
  • come up with a hashtag so we don’t write out ’6th annual #eDisclosure conference’ in our tweets
  • make the sessions a tad shorter
  • get a couple of additional panelists to mix it up a bit

But overall it’s the best way I know for taking the pulse of the UK e-Disclosure market in a single day.

We’ve also been active in this area ourselves recently with webinars on litigation readiness with Zylab and Katey’s participation on a Brighttalk webinar on cross-border eDiscovery. But most importantly, we have new e-Discovery research out in the shape of our cloud e-discovery [PDF]and cloud archiving [PDF] reports.

Katey and I are doing a few webinars at the moment and I’m also speaking at a conference this week, so I just wanted to round them all up here:

One webinar is already in the bag, which Katey did with Digital Reef & legal service provider Precise-Law, entitled ‘The challenges of a  reactive vs. proactive EDRM in the Enterprise.’ A replay is available here.

I’m speaking at Search Solutions 2010 this week  on Oct 21. It’s a one-day event organized by the British Computer Society, which I attended last year as a non-speaker and it was very good, so I hope to be able to contribute to maintaining that high standard! I’m speaking at 11.45 am on ‘The trends shaping the future of enterprise search 2010-2013′ and then I’m participating on a panel at the end of the day on what search will look like in 2015. As I’m already making predictions through 2013, I’m three-fifths of the way there! Oct 21 is also the day of Autonomy’s Q3 results call so the place should be full of lively discussion regarding that.

Come November I’m doing a couple more webinars:

On Nov 11 I’m participating on one with Zylab, the focus of which will be litigation-readiness, moving beyond just eDiscovery to insuring organizations have their information in a state such that it can be easily searched, accessed, locked down, deleted or produced to an opposing party.

Also in November I’ll be participating in a webinar with Attensity Group, which will be focused on social media and the application of text analytics to that space. Date TBC and links to follow, most likely on my Twitter feed.

Document filters. There’s a phrase to conjure up excitement in any technologist eh? No? Didn’t think so. But look more carefully at what is going on and it does get more interesting, trust me.

I was moved to expand in this by Isys Search Software’s recent attempt at guerilla marketing at Oracle Open World which it tweeted about here:

isyssearch: ISYS goes guerrilla; kicked out of Oracle Open World party after projecting our branding on the Metreon http://tinyurl.com/272fync #oow10

Quite apart from what it says about Isys and how much it’s changed in the last two years – a bit like the nerdy guy in the playground trying to act tough – it shows how important some people – including me – think these filters have become.

There are two main companies selling products that enable the opening and viewing of myriad file formats (400 is a common number cited by both the vendors and their customers). So when a search engine comes across a Word 1997 or even something like  Wordstar 4 file, how does it open it? Usually using one of two products: Oracle’s OutsideIn or Autonomy’s IDOL KeyView.

Both products came to these companies via acquisitions: Autonomy buying Verity in November 2005 and Oracle buying Stellent in 2007, (and Stellent, as it wasn’t known then, buying Inso in 2000). It’s also interesting to note that Isys still refers to them as Inso in its marketing even though the product has been called something else for years.

Like all OEM technology, these filters aren’t easily ripped out and replaced. And that’s what these two vendors like about them. It gives them a a foot in the door at software companies that they can try to expand upon, and quite often they do. The temptation of course is to use the difficulty to remove them as a point of leverage to crank up prices.

And that’s what we’re hearing Autonomy is doing from a number of vendors. We haven’t heard anything similar regarding Oracle, it should be noted. Autonomy has a reasonably significant OEM technology stream and as we have mentioned previously Autonomy regularly brags about its OEM wins, without specifying whether its KeyView or the full IDOL engine being OEMd. Incidentally after that earlier post Autonomy contacted us to say that KeyView isn’t the result of the acquisition of Verity and all it bought was the name. That’s despite what was said at the time, including its own press release shortly after the acquisition bragging about its features. But then Autonomy’s marketing these days increasingly requires a willing suspension of disbelief.

Isys has had this technology for a while but never sold it separately. But now it is finding quite a bit of success among software vendors nervous about having a key piece of technology owned by Autonomy or Oracle because they’re often search and/or content management companies; two markets in which both companies play. dtSearch, another veteran OEM provider also provides similar filters.

So for the first time in a long time, ISVs have a choice beyond the main two in filters and in their close relatives, connectors, the software to connect search engines to databases, content management systems and other repositories. In the often incestuous world of information management software, where vendors both compete and sell to one another, these have become points of leverage that customers may not notice in terms of functionality, but they certainly do in terms of the price they have to pay for their software.

At the time of Autonomy’s Q2 results last week, a fair few commentators said an acquisition of Open Text was imminent. We know that a large deal is imminent and the enterprise value of Open Text (OTEX) is in Autonomy’s ball park. Plus OTEX – itself a roll-up machine somewhat akin to Autonomy –  isn’t exactly in the rudest of health right now.

On the earnings calls CEO Mike Lynch said Autonomy’s next major acquisition would not be done to buy growth (we have already expressed our thoughts on that), nor would it be done simply because the price is right. It would have to be a strategic move, a game-changer. Well, OTEX isn’t that, in our mind at least. So what would such a deal give Autonomy?

Sure, it would give it practically all the document management business in the legal sector. But so what? Autonomy already has a lot of that via its Interwoven acquisition. It would also bring with it yet more overlapping content management products and a collaboration business being eaten by SharePoint. On the plus side, it would roughly triple Autonomy’s customer base to about 65,000 organizations.

Of course, I could be completely wrong and August 18 could be the date on which that is proved, as it’s OTEX’s Q4 results announcement. That is, if SAP hasn’t got there first.

Still, Tibco or Informatica make far more sense to us as truly strategic acquisitions for Autonomy. But of course, in order to buy something you have to find a willing seller, and we’re not so certain those sorts of companies relish the prospect of ending up inside Autonomy as much as a company that has few other choices might do.

Clients of 451 will have seen our report yesterday on Autonomy’s Q2 and 1H10 results. I won’t repeat it all here but in it we looked at the some of the more puzzling aspects of the company’s numbers. These include:

• Organic growth:  ”IDOL product” revenue of $62m this time was in contrast to $47m in Q1. It said at the time of the Q1 results on April 21 that it had $10m of hardware inventory, which most understood to be its Arcpliance archiving and ECA appliance. It said it had already sold most of that in Q2. That is a new product, so if that $10m is removed from the $62m (since it’s recognized as up-front license revenue), and a little bit more is taken off for sales to federal government via the recently-acquired MicroLink (Autonomy trumpeted a multimillion dollar federal deal in Q2), then you get very close to the $47m figure from Q1, and thus, next to no organic growth. That compares to the company’s claim of 19% organic growth for IDOL in the quarter and 13% across all products and services.
• Cloud & SaaS & hosting: Autonomy gives out some seemingly helpful but often confusing metrics in terms of its product breakdowns. It said  SaaS-based revenue accounted for more than one-quarter of the company’s revenue in the first half. fair enough, and pretty interesting. But it also attributed revenues of $47m (out of $211.6M in total) to what it calls “IDOL cloud.” That’s 22%. However that isn’t one of the terms used in the way Autonomy packages its products so it’s hard to tell what it is. For instance, how much of ‘IDOL cloud’ is Zantaz’s hosted archiving product isn’t clear.
• Services: It puzzles me how a company selling a product that is powerful, but complex to implement, as Autonomy is, can make do with next to no professional services, instead relying almost solely on partners. This tends to leave customers – especially those spending less than $1m with the company – with a lot of integration work on their hands. It also puzzles us when it goes and picks up a service firm like MicroLink, paying $55m for assets it says are worth $1m with the rest being goodwill (as it disclosed in Q2′s results).
• OEM: The company said that OEM is its fastest growing revenue stream. It should also be noted that Autonomy sells two main products via its OEM channel. One is IDOL, the core search and categorization engine. The other is KeyView, the set of file filters it got with its acquisition of Verity almost five years ago. The former costs a lot more than the latter, and once the customer has implemented it, the former is a lot harder to replace than the latter. Nevertheless, when Autonomy announces a new OEM customer or a renewal, it usually doesn’t differentiate between these two. Incidentally it made a bold claim on the call yesterday, namely that almost all the major archiving vendors are OEM customers of Autonomy, which means all its main competitors in that space as it’s very much an archiving vendor too. In cases like that it’s quite important to distinguish between OEMing IDOL and OEMing KeyView as the former is much more of a differentiator than the latter.

There’s more in the report but mainly in the form of other things that puzzle me about these numbers, rather than a list of answers. Still, another acquisition is sure to come along soon  and change the picture again.

I’m very happy to say that our new report on the e-Discovery/e-Disclosure market  - E-Discovery and E-Disclosure: Bringing it all back home – is now available to clients and non-clients alike.

The report contains:

• User survey – a survey of 140+ end users about their current e-Discovery products, their purchasing plans over the next 12 months, the state of their budgets now and in the future, their pain points and how they execute their e-Discovery strategy – or even if they have one.
• Detailed profiles of 32 software and service providers from the US and Europe.
• Analysis of the current issues and drivers in the market and how we think they may evolve in the future, including issues such as litigation preparedness, early case assessment, in-sourcing of e-Discovery (hence the sub-title), cloud computing and regulatory and legal challenges in the US and Europe.
• The market landscape including a detailed breakdown of how vendors map to the EDRM and a look at the markets that e-Discovery impacts upon, including archiving and information governance.
• M&A analysis - forward-looking analysis as well an examination of past valuations.

The report was written by Katey Wood (@KWood451) and myself (@nickpatience). Any questions regarding the report can be addressed to either of us and we can also let you know how you can buy the report whether you’re a 451 client or not.

There’s a special section in this week’s Economist on information management, entitled Data, Data Everywhere. It’s always good when your area of interest and coverage is on the cover of such an illustrious magazine. However, I read it and downloaded the PDF (which you can do as a subscriber) and searched that, and to my surprise there are two significant words close to my heart that don’t appear anywhere in the report. They are:

• discovery (as a short hand for e-Discovery, or just on its own)
• governance (as in information governance)

I know the author, Kenneth Cukier, he’s an excellent technology journalist and thinker with years of experience (we both spent perhaps way too long at the various meetings that hosted the various fights for control of the internet’s domain name system (DNS) in the 90s that led to the creation of ICANN).

Ken’s focus in the report was more on the data deluge created by the internet and how that affects individuals, mainly in the context of being a consumer, exploring issues such as personal privacy, and how companies such as Google and Wal-Mart manipulate ans profit from data. There was very little talk about the problems that creating, storing, searching, archiving and deleting information imposes on companies.

And although there is a section on new regulatory constraints, it was again focused mainly on privacy, personal information as a property right, and the integrity of information held about individuals by corporations, with a token nod on the need to preserve digital records, but again looking at it from a consumer’s perspective.

All important topics, for sure. But not the one that a lot of companies are spending a lot of money grappling with now and in the future.

Now I’m not naive, and didn’t expect a multi-page spread on litigation support or an exploration of what early case assessment means in a weekly magazine with such a broad readership as the Economist! But I thought that given that e-Discovery and more recently, information governance are shooting up the list of priorities of many CIOs (the ‘i’ does stand for information, after all) as realize that without appropriate litigation readiness and information governance in place they could find themselves in a financial and legal sinkhole, I thought it warranted at least a paragraph or two among the 14 pages of text.

Update: Clearwell’s CEO Aaref Hilaly posted something on the same subject at almost the same time as me.