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The eDiscovery Paradigm Shift

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Monday, April 23, 2012

Virtual eDiscovery Arrives

On Monday April 17, 2012, X1 Discovery out of Pasadena, California announced a major release of X1 Rapid Discovery, it’s Early Case Assessment (ECA) and Search platform.  This latest version of X1 Rapid Discovery (X1RD) is actually a major rewrite of the architecture and user interface resulting in the first virtual Early Case Assessment (ECA) platform that users can remotely deploy to wherever Electronically Stored Information (ESI) is located.

I had to the chance to talk with Skip Lindsey, EVP Sales and Business Development at X1 Discovery about the genesis of  X1RD.  He indicated that they wanted to build on the success that they had seen providing advanced search and ECA to traditional enterprise clients with ESI behind a firewall by expanding support to the cloud.  However, they didn’t want to be just another “me too” ECA cloud platform.  Therefore, they decided to expand X1RD capabilities to run as a virtual application designed specifically to run in a private or public cloud environment in addition to its legacy support for traditional enterprise environments.  He also indicated that they wanted X1RD to be highly scalable, easy for users to install and manage remotely, easy for users to move the virtual components to the data and conducive to a very disruptive pricing model.  I think that they accomplished those goals and most certainly have earned a first mover status in the ECA platform market.

In today’s complex enterprise environment, X1RD should be a very attractive multi-purpose ECA alternative for users that currently have ESI scattered around behind their corporate firewall, in private clouds and maybe even held captive with one of the Cloud Service Providers (CSPs).  The major paradigm shift is that X1RD enables users to move the ECA process to the ESI whereas current ECA technology requires that ESI be collected and moved to the ECA platform either manually or over slow Internet pipes. 

Current ECA Best Practices
Currently, an enterprise faced with responding to a legal matter has to identify where all potentially responsive ESI may be located, figuring out what they need to harvest and then collect and aggregate the ESI to a centralized physical location before they can even start the process of analysis and first pass review.  This process can take weeks and months and cost thousands if not millions of dollars.  Adding ESI stored with a Cloud Service Provider (CSP) has only exacerbate the situation by adding another layer of complexity, more time and more cost.  For a more detailed overview of virtualization, please see “Virtualization is the Key to Future eDiscovery Software”.

X1RD Changes the ECA Paradigm
X1RD completely changes the ECA paradigm.  X1RD users have the ability to remotely load the X1RD virtual application into the computing environment of their choice as long as they have the appropriate credentials to do so.  Once loaded, uses can then remotely configure, though a drag and drop user interface, as many X1RD virtual ECA processing engines as may be required to collect, index and process a given set of ESI. Please note that users will have the flexibility to configure X1RD on a single physical machine with multiple virtual machines or on multiple physical machines, each with multiple virtual machines.  Because X1RD has done such a good job of masking the complexities of configuring and managing this virtual environment from users, its value may be lost on many users.  However, this flexibility has tremendous operational and financial benefits.

As an example, because X1RD enables users to break up a large processing task into multiple smaller processing units that can  run on very inexpensive machines, it doesn’t require users to purchase and/or provision high-end and expensive servers.    X1RD enables users to either leverage the computing resources that they currently own foregoing the requirement to invest in large expensive servers that will sit idle for most of the time waiting for the next big ECA job.

X1RD installs in a matter of minutes and the user interface is attractive, easy to understand and provides everything that a litigation knowledge worker requires to search, analyze, review, tag and generate a load file in today’s eDiscovery environment.   Further, for those clients that don’t want to run their own X1RD environment, X1RD lends itself to a managed services model that enables Managed Service Providers (MSPs) to run X1RD for clients from a remote location. 

X1RD and the Amazon Cloud
As recently reported on the New York Times Bits Blog, in a post titled, “Amazon Creates a Software Rental Store”,’s Amazon Web Services (AWS) business, facing looming competition for its business of renting online data storage and computing, is introducing a store where customers will be able to rent business software from a number of third-party providers, including I.B.M., Microsoft and SAP.  And now, X1RD is the first virtual ECA platform listed in the Amazon Web Service (AWS) ISV catalog.

Although there are other ECA and Document Review platforms running in the Amazon Web Services (AWS) cloud such as NextPoint, there is a very distinct difference as AWS clients will be able to remotely load X1RD into their AWS computing environment and configure it to collect, search, analyze, complete first pass review and generate a load file without having to move any ESI. Its the paradigm shift that I eluded to earlier that enables users to move X1RD to the ESI as opposed to the legacy approach of moving ESI to the ECA platform.

Currently, X1RD will be able to provision and configure computing power, memory and storage from AWS as required for any ECA processing task large or small, provision X1RD from X1 Discovery and be processing ESI in a matter of hours. Once completed with the responsive ESI exported, users will be able to shut down this ECA environment and only pay for what they utilized.  It’s a much different model and the industry has ever seen.

With the announcement of the AWS partnerships with IBM, Microsoft and SAP, it will be interesting to see what AW does with the X1RD opportunity from a marketing perspective.  As indicated in “Amazon is Overlooking the Financial Value of eDiscovery”, there is a latent demand for eDiscovery and Information Governance in the Cloud.  And, in fact not providing such services may in fact be a barrier to entry for some enterprise clients.  I am very encouraged by the announcement that AWS has added X1RD to its ISV catalog and optimistic that AWS may in fact understand that providing Information Governance, Search and eDiscovery may be one of the keys for Amazon to increase the $1.19 Billion in revenue that AWS posted for 2011 to a much higher level than could have ever been imagined with just IaaS or even standard PaaS services.

Disruptive Pricing
X1 is also pushing the pricing envelope by pricing X1RD at $1,000 per day or $5,000 per week for “all you can eat” or process.  As an alternative, they also offer the option of a $25,000 perpetual license with 20% annual maintenance.  This pricing model is very aggressive and is going to put downward pressure on the legacy model of pricing ECA processing on a per gigabyte basis.

Final Observations and Comments
As indicated in “eDiscovery will follow the Cloud Computing Boom”, with the expanding volume of ESI in the cloud, the demand for Information Governance and eDiscovery is sure to follow.  However, just moving your ECA or Document Review platform to the Cloud is not necessarily the answer as it still requires users to move large amounts of ESI to that platform.  The most efficient model is to move the ECA application to the ESI.  And, it appears that with the release of most recent version of X1RD that X1 Discovery has become a first mover in the race to capture this market.

In addition, in today’s complex enterprise environment, X1RD should also be a very attractive multi-purpose ECA alternative for users that currently have ESI scattered around behind their corporate firewall, in private clouds and maybe even held captive with one of the Cloud Service Providers (CSPs).

As has been reported on several other blogs about this subject, with X1RD forging the way, other ECA vendors are sure to follow. However, that may be easier said then done,   With years of experience designing, developing and maintaining complex enterprise class applications, I would suggest that many current legacy ECA vendors have code bases that would be literally impossible to move to the cloud as self-provisioning and remotely configurable virtual apps that can run on almost any class server.   The only option would be a complete re-write which in many cases is a very dangerous path for a software vendor with a large installed based as it opens up that base to explore alternatives such as X1RD.  As such, I am not convinced that  many legacy ECA vendors will follow this trend.

One thing is for sure, the demand to process ESI that is in the cloud is going to continue to increase. And, it appears that users are going to have several options to address this demand; moving the ESI to the ECA platform or moving the ECA platform to the ESI.

Either way, the next few years are certainly going to be exciting times in the eDiscovery in the Cloud market.

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