Gartner Predicts eDiscovery Market at $1.5 Billion by 2013

Gartner announced their inaugural “magic quadrant” for the E-Discovery (eDiscovery) software market on May 13, 2011 and predicted that this market would reach $1.5 Billion in revenue by 2013.

Having lobbied and pleaded my case with Gartner many times over the course of my career in enterprise software, I am very well aware of the politics and other factors that influence the final results of where a vendor ends up on the “magic quadrant”. And, I believe that Gartner does enable or enforces enough integrity into the process to render the results at least marginally interesting and a factor for enterprise buyers to consider. Having said this, I would have to admit that the inaugural '”magic quadrant” for E-Discovery Software paints a fairly accurate picture of the players in this space (with a few exceptions).

Gartner analysts John Bace and Debra Logan identify five leaders in eDiscovery including; (1) Autonomy; (2) Clearwell Systems; (3) FTI Technology; (4) Guidance Software; and, (5) kCura.

I would assume that Autonomy made the list because of its size of installed based, amount of data managed, revenues, etc. And, although it is not clear if Gartner was aware of the pending acquisition, Autonomy’s purchase of Iron Mountain does provide them with an even wider platform. However, if were a buyer in 2011, I would be cautious about Autonomy. They are very expensive, complex, proprietary, have a reputation for less than stellar service and I have never gotten great reviews from any of their clients. The relationship that they have with their client base reminds me a lot of Oracle from the 1990’s when clients would complain about how bad Oracle was as they were signing the purchase order to buy 50 more enterprise licenses. The point being, Autonomy (just like Oracle) has a corner on the enterprise market for clients that have lots of data and need a big legacy system to manage it all. The trade off is that it will not be leading edge or pretty. But, it will get the job done.

Clearwell is Clearwell and probably deserves to be somewhere in the mix just based on market share. They have undoubtedly done a great job literally creating the Early Case Assessment (ECA) market, the demand within the Early Case Assessment (ECA) market and then stepping up to fulfill that requirement. There are much better ECA tools on the market. But, as Clearwell and many other tools vendors have proven, you don’t have to have the best technology to capture a market. As I have indicated in past posts, Clearwell’s marketing success over the past 3 years will be studied at the Harvard School of Business. Let’s just hope that Symantec can add a little technology to mix and give their platform some legs to go along with their market share.

I don’t really have any comments on FTI Technology beyond the fact that they are a subsidiary of global consulting company with 3,400 employees and a large client base that is using FTI software because it is what the FTI consultants tell them to use. As such, FTI as a software player in its current state will linger within the industry for years to come as their client base struggles to defy the FTI consultants and move to a different more competitive platform. As a side note it has always been interesting to watch FTI balance the use of their internal technology with the wishes of their clients. If they hadn’t paid so much money for what the technology that they have, I would suspect that it would make much more business sense for them to go completely technology agnostic. But then the amortization on the investment that they have made would never get completed.

I also don’t really have any comments on Guidance as they will continue to own a decent share of the computer forensics and associated security software market and therefore will continue to be a member of the magic quadrant in someway shape of form. I will predict that the need for computer forensics software is changing and therefore there is an opportunity for some up and commers to steal market share from Guidance.

The last player on this list is kCura and I have to admit that I like Relativity and I am at least intrigued with their mini app store. However, I have found their channel plan to be highly draconian and their enterprise sales plan to be in conflict with their service provider channel. Further, I would suspect that kCura is a takeover target.

Gartner analysts John Bace and Debra Logan also called out challengers Symantec, EMC, IBM, and Nuix. Given the fact that Clearwell is already a leader, Symantec will move into that quadrant automatically. So, we will be left with EMC, IBM and Nuix. This is a really interesting and diverse group. I am not sure that EMC knows that they want to be when they grow up. IBM, as evidenced by its acquisition of PSS Systems, could obviously buy its way into the lead in the eDiscovery market. However, I believe that they understand that eDiscovery is actually just a subset of the overall Information Management and Information Governance market and therefore have their sights set on something much bigger.
The real interesting player in this list is super speedy Nuix. And although I have a bias as I like the Nuix technology and their management team, I truly believe that we are going to see some big moves from Nuix over the next few months and years.

The other players in the report that I like are CaseCentral and Exterro. CaseCentral is a pioneer in understanding and implementing true multi-tenant technology within the enterprise eDiscovery space and has also been expanding its reach back into the ECA and analytics space with connectors into EnterpriseVault from Symantec. Look for CaseCentral to have a major impact as the market moves to Information Governance and eDiscovery in the cloud. As another side note, it will be interesting to see how Symantec handles legacy relationships such as CaseCentral now that they own Clearwell. Maybe CaseCentral is next.

Exterro is the real wildcard in the bunch. They have absolutely outstanding technology with a suite that can take you from data mapping to legal hold to workflow management Unfortunately, they have a flawed channel strategy and they are somewhat difficult to work with. I predict that they will be acquired in 2011 or early 2012 and become a cornerstone component of a much bigger solution.

The player that Gartner contends they are tracking but was missing from the “magic quadrant” was StoreIQ. As a component player in enterprise eDiscovery and probably more likely in enterprise Information Governance, StoredIQ has some really interesting technology. However, they seem to be having some internal struggles in regards to who they are and how they are going to position and sell their IP. I look for StoredIQ to be acquired in 2011 or early 2012.

The one player that was not even mentioned was Digital Reef. They have a very interesting and fairly comprehensive SaaS-based platform. With new executive management to help with the next phase of their growth, look for Digital Reef to make some noise in the market in 2011 and beyond.

Labels: Autonomy, CaseCentral, Early Case Assessment, ECA, eDiscovery, Exterro, Gartner, IBM, kCura, Nuix

posted by Charles Skamser @ 1:52 PM 2 Comments

$1.2 Billion eDiscovery Market by 2014

A press release as posted on Marketwire on October 11, 2010, indicates that a very recent study by The Radicati Group, titled, “eDiscovery Market, 2010-2104”, predicts that the eDiscovery market will reach $1.2 billion in sales by 2014.

This is considerably less than the $2.8 billion market size for 2009 as indicated in the The 2010 Socha-Gelbmann Electronic Discovery Survey.

And, unless we assume no growth over the next few year, less than the $1.2 billion forecast by The Gartner Group earlier this year.

I am sure that there are differences in the exact revenues sources that these studies are looking at and also differences in statistical methodologies.  However, under I any circumstances, eDiscovery is a big market and I believe from personal experience that it should continue to grow.

Over the past 12 months I have talked to numerous CIOs and other “C” level information technology executives from the Global 2000 that have jumped into the eDiscovery discussion internally, added the requirements to their radar and expect to budget funds to cover infrastructure to support bringing some aspects of eDiscovery in-house.

According to a somewhat related study that adds an even more interesting twist to the expected growth and direction of the eDiscovery market,  The Cowen Group recently conducted a study of the AmLaw 200, the highest-grossing law firms in the United States, and found 87 of the 200 currently have internal eDiscovery practice groups.  According to David Cowen, founder of the Cowen Group, the results signify the importance of reliable eDiscovery solutions and practices for firms of all sizes and specialties.

The Cowen Group study goes on to state that many of the firms with practice groups reported that their current and prospective clients showed interest in their services due to the presence of the eDiscovery experts. However, the report also found a number of organizations with practice groups still do not have the adequate IT and human resources required to fully support the initiative.

"These findings are significant for corporations who require law firms with legitimate eDiscovery experience," said David Cowen, founder of The Cowen Group. "Many firms realized that they needed to establish an eDiscovery practice group to market themselves to savvy clients, but far fewer made the necessary investments in people, process and technology to develop a group with true eDiscovery expertise."

To improve the standards of eDiscovery use and practice, Cowen expects to release an essential guide for firms planning to implement practice groups.

Having talked to partners from most of the AMLaw200 over the past 12 months, my take is that they are seeing their corporate clients either already brining eDiscovery and associated activities in-house or planning to do so over the next couple of years.   I also have heard time and time again that many of these partners are pleased to see this trend as they never wanted to be in the IT business in the first place.

Summary Questions I have a few questions about the results these various studies:

1.  Is the eDiscovery market in fact growing?
2.  Who is buying? Is is the Global 2000 or the AMLaw200
3.  Are  per unit eDiscovery costs coming down?  And, if so, is the overall cost of eDiscovery going up because of the accelerating increase in the amount of ESI?

The full text of the Radicati Group press release is as follows:

The latest study by The Radicati Group, "eDiscovery Market, 2010-2014," offers an in-depth analysis of the worldwide market for eDiscovery solutions. The study includes market trends, vendor revenue market share, market size and four-year forecasts, and breakouts by region.

eDiscovery solutions enable organizations to identify, collect, analyze, process, and present data stored in various corporate repositories. The data may be collected in response to lawsuits, internal investigations, or regulatory compliance requests. 

eDiscovery solutions today range from custom-built for each individual customer, to pre-packaged solutions that work out-of-the box in less than an hour. About 80% of all eDiscovery solutions are deployed by legal departments of large organizations, and the remaining 20% by law firms. 

This study includes an analysis of leading players in the eDiscovery market, including: Anacomp, Autonomy, CaseCentral, Clearwell, EMC, Guidance Software, Iron Mountain (Stratify), Recommind, StoredIQ, Symantec, and others.

To order a copy of the study, or to subscribe to our market research services, visit our website at http://www.radicati.com/, or call Todd Yamasaki at (650) 322-8059 begin_of_the_skype_highlighting   (650) 322-8059 end_of_the_skype_highlighting.

About The Radicati Group, Inc. The Radicati Group is a leading technology research and advisory firm focused on all aspects of email, security, email archiving, regulatory compliance, wireless technologies, web services, instant messaging, unified communications, social networking, and more. The company provides both quantitative and qualitative information, including detailed market size, installed base and forecast information on a worldwide basis, as well as detailed country breakouts.

The Radicati Group works with corporate organizations to assist in the selection of the right products and technologies to support their business needs, as well as with vendors to define the best strategic direction for their products. We also work with investment firms on a worldwide basis to help identify new investment opportunities.

The Radicati Group, Inc. is headquartered in Palo Alto, CA, with offices in London, UK.

Labels: Autonomy, Clearwell Systems, eDiscovery, Gartner, Recommind, Socha-Gelbmann Electronic Discovery Survey, StoredIQ

posted by Charles Skamser @ 10:35 AM 1 Comments

eDiscovery Software Pays for Itself in a Matter of Months

According to a Gartner report from December of 2009, eDiscovery software purchased by the Enterprise can pay for itself with one big case or at least within the first year. This type of ROI is almost unprecedented within the Enterprise for business software and literally provides a “no brainer” for justifying the capital outlay and associated expenses.

According to the Gartner report, eDiscovery is a maturing market with entrants from multiple categories, including storage and archiving, search and information access, content and records management, and workflow, as well as tools designed as end-user applications for legal professionals and forensic data collection tools aimed at security professionals, regulators and law enforcement agencies. All of these categories of software vendors have added e-discovery to existing suites or purport to cover various aspects of the eDiscovery process. There are also pure-play e-discovery vendors to consider.

Enterprises purchasing eDiscovery software can reduce the costs of litigation by improving their control over unstructured content, and semistructured content, most notably e-mail. Our client references consistently report that they have cut costs and risks by taking control of litigation hold, litigation-hold-tracking, file collection, file processing and legal review, instead of outsourcing these functions.

The selection of eDiscovery software is a joint decision and sometimes a joint purchase between the IT department and the legal department. These two groups must work together to determine the needs of the organization and the individual users, and to build the business case for purchase. Although many corporations do not know the true costs of their legal activity, there is evidence that those costs are substantial. Because the work of legal and regulatory response is spread over different departments, and legal matters can span multiple years, traditional cost accounting does not do a good job of tracking the cost of litigation and regulation.

The legal department pays for outside counsel's services and eDiscovery providers; business units pay liability costs if a plaintiff wins a monetary judgment; and the IT department bears the expense of any internal discovery work. That makes it difficult to track costs in a meaningful way. In addition, litigation can go on for years, meaning a single case must be tracked over its lifetime. This, of course, does not follow the way accountants do things, which is on a yearly basis. Legal departments seldom have "budget" allocated to them but, of course, must pay the bills of outside counsel and other providers of legal services, and that money comes out of the legal reserve (see Note 1). Gartner clients that do track "all" legal costs, and that have purchased eDiscovery software, report that the software pays for itself in a matter of months, or is justified by the projected cost of "one big case."

The cost savings as reported by clients for early case assessment, along with in-house collection and preservation, can more than justify the purchase of moderately priced eDiscovery software ($100,000 to $500,000), or even more expensive software (costing more than $500,000). When interviewed for this MarketScope, clients reported a return on investment (ROI) within three to six months or, alternatively, after one big case, particularly intellectual property disputes (see Note 2). The main areas of cost reduction are in processing data by external service providers, as less time and, therefore, money is spent on outside attorney review, as less material is passed to them. These benefits are achieved by defensibly culling the amount of data that is passed on to further steps in the e-discovery process, by allowing in-house attorneys to "go back to the well" and refine their searches, either coming up with more data (to avoid sanctions) or refining existing data sets to the relevant documents to pass on for further consideration.

eDiscovery takes place at the request of outside counsel, or before counsel is retained, at the request of an internal legal department. The amount of material turned over to outside counsel for review has a direct bearing on the cost of litigation or regulatory investigation. Opportunities to reduce spending on both the processes of eDiscovery itself and the subsequent review by attorneys of materials obtained during eDiscovery are the heart of the eDiscovery vendors' value proposition.

Using this report, data center managers, information security officers, information architects, in-house legal personnel and records managers can find information to build a business case, create a list of possible vendors and determine which ones best meet their needs.

To review the full Gartner Report, please visit: http://www.gartner.com/technology/media-products/reprints/ca/vol2/article2/article2.html

Labels: 2010 eDiscovery Predictions and Trends, eDiscovery, Gartner, in-house corporate counsel

posted by Charles Skamser @ 2:53 PM 1 Comments

Gartner Confirms that the eDiscovery Software Market is Growing

Again, not surprisingly, Gartner just released the results of a study that indicates that worldwide electronic-discovery (e-discovery) software revenue is on pace to total $1 billion in 2009, a 25 percent increase from 2008 revenue of $807.6 million. They went on to indicate that in 2010, the market is forecast to surpass $1.2 billion, a 23 percent increase from 2009.

Once again, I have to comment that the eDiscovery technology market is really great place to be right now. And, I can't wait to see what Gartner has to say about the Governance, Risk and Compliance (GRC) markets.

The other results as reported in the Gartner Study by Tom Eid, research vice president at Gartner was that transparency of business performance as aligned to governance, risk, and compliance regulations and subsequent organizational reporting, mitigating IT risk through the use of real-time and continuous controls monitoring for transactions, segregation of duties, application configuration, and master data and preventing business failure through fraud detection, improved user-level and application-level security, and corruption were the three important eDiscovery market catalysts that underscore the importance of linking business goals to IT risks and the ability to manage both. More to come on this in future Blog posts.

The full text of Gartner's press release is a follows:

STAMFORD, Conn., December 16, 2009 —   Worldwide electronic-discovery (e-discovery) software revenue is on pace to total $1 billion in 2009, a 25 percent increase from 2008 revenue of $807.6 million, according to Gartner, Inc. In 2010, the market is forecast to surpass $1.2 billion, a 23 percent increase from 2009.

E-discovery is the identification, preservation, collection, preparation, review and production of electronically stored information associated with legal and government proceedings. E-discovery technology can be provided as a stand-alone application, embedded in other applications or services, or accessed as a software-as-a-service (SaaS) offering.

“Increasingly, more organizations are being confronted with litigation regarding bribery and corruption, foreign corrupt practices, securities and financial fraud, government contracting abuses, and healthcare fraud,” said Tom Eid, research vice president at Gartner. “Such unplanned events underscore the need for more-effective enterprise information strategy and information governance policies.”

Mr. Eid said that the e-discovery market is in a period of simultaneous growth and consolidation that should last through 2011. Market and technology consolidation will continue during the next several years as vendors expand their product and service portfolios, obtain market-centric expertise, and acquire new customer bases. As the e-discovery market shifts from an emerging market to a high-growth market, Gartner expects new vendor entrants and nontraditional competitors to participate through technology partnerships and acquisitions.

Until now, vendor revenue for e-discovery has focused on the U.S., with approximately 90 percent of market revenue for 2008. However, going forward, market growth is also expected in common-law jurisdictions, such as Australia, Canada, South Africa and the U.K., as new civil litigation regulations are passed regarding privacy and disclosure. In addition, many organizations based in the U.S. have subsidiaries in countries around the world that will provide further pockets of regional growth.

“The December 2006 amendments to the Federal Rules of Civil Procedures (FRCP) in the U.S. regarding the discovery of electronically stored information (ESI) and passing of subsequent similar statutes in other countries, has really spurred market interest in e-discovery,” said Mr. Eid. “This is prompting many companies to rethink their overall information management strategies, from the policy level to the implementation level.”

Mr. Eid said three important e-discovery market catalysts underscore the importance of linking business goals to IT risks and the ability to manage both. The three core market catalysts are:

- Transparency of business performance as aligned to governance, risk, and compliance regulations and subsequent organizational reporting.
- Mitigating IT risk through the use of real-time and continuous controls monitoring for transactions, segregation of duties, application configuration, and master data.
- Preventing business failure through fraud detection, improved user-level and application-level security, and corruption.

Additional information is available in the Gartner report "Dataquest Insight: E-Discovery Software Marketplace Continues Its High Growth Pace." The report is available on Gartner's website at http://www.gartner.com/resId=1228213.

Labels: 2010 eDiscovery Predictions and Trends, eDiscovery Software Sales, Gartner

posted by Charles Skamser @ 1:37 PM 0 Comments

Gartner Humming the Proactive eDiscovery Tune with Five Step Process for Better Use of Enterprise Search in eDiscovery

Having spent most of my career assisting IT departments worldwide provide more business relevant support to their business units, I have been very interested in following the paradigm shift that is going on within the IT deparments and their bretheran in the legal departments as they collectively deal with eDsicovery.

If you read my Blog with any consistency, you know that I believe that eDiscovery is part of a bigger issue called Goverance, Risk and Compliance (GRC). And, if addressed from a proactive standpoint with ESI archiving and leading edge enterprise search and analysis from forward thinking technology organizations such as Orcatec and ContentAnalyst, eDiscovery will eventually become a commodity process.

And, although Gartner has not exactly said this same thing, it is nice to know that they are at least begining to hum this same basic tune.

The full text of the Gartner press release is as follows:

By the end of 2012, enterprises that fully document their search processes in e-discovery will save 25 percent on their collection processes, according to Gartner, Inc. Enterprises of all sizes, and those facing any number of legal actions annually, should have a simple set of practices to follow anytime they need to embark on an e-discovery process in the near future.

Although no single relevance model or cocktail of relevance models will be effective in the next five years, Gartner predicts that by 2014, lawyers and technologists will use a customary means of recording search processes in e-discovery.

"Addressing the ongoing challenge of the IT perspective of litigation management demands both that the technologies be acquired and that procedures for using them be established," said Whit Andrews, vice president and distinguished analyst at Gartner. "Companies need to own the products that will be necessary for them to address litigation and understand that those products will not have the same positive impact unless they are supported by repeatable, effective, systemic processes for lawyers and IT to follow."

Gartner identified five guidelines to ease the first steps of addressing e-discovery for litigation:

Open communication wide, and include potential custodians. The legal team, or teams, and IT must be able to communicate throughout the process. At the first threat of litigation, IT and the lawyers representing any company or government enterprise should initiate a planned round of meetings as though the e-discovery phase of litigation were a project with phased deliverables and expectations.

Get a senior litigator involved immediately. High hourly rates are compensated for through effective decision making.Waiting for the final product to be ready for delivery to opposing counsel is a mistake. A senior litigator, engaged at an early stage, will be able to advise on what document and data sources should be searched and examined, how to structure initial queries and what information should be searched, and how to record processes so that they are more defensible in the case of an inquisitive judge.

Analyze the corpus of documents and data early.Understanding the underlying content of the case holistically will allow IT workers and lawyers to discuss meaningfully what the impact will be of any collection strategy. It will also give the senior litigator the ability to call whether the case should proceed or be settled.

Estimate the price scale for collection based on what it will cost to pursue strategies of different degrees of intensity. Budgeting the cost of collection will allow IT workers and lawyers to work together to determine a proportional expenditure on e-discovery that is proper for a case, given its significance and the financial exposure it represents.

Document your decisions. Terms and methods of querying them should be saved in a grid such as a spreadsheet file for simplicity. Lawyers, in particular, continue to hope for a specific means of conducting searches that would allow them not to examine search processes as granularly as they must now. However, for the immediate future, lawyers' involvement will be critical to achieve recall that will be acceptable to the bench and opposing counsel.

"Codifying these guidelines in order will further enhance efficient proceedings and improve the successful resolution of litigation," Mr. Andrews said.

Additional information is available in the Gartner report "Five Steps for E-discovery to Improve Search and other processes." The report was generated as part of the e-discovery workshop that Gartner conducted with leaders in e-discovery, such as Robert Brownstone, law and technology director at Fenwick & West LLP, at the Gartner Risk Management and Compliance Summit, April 29-May 1 of this year. The report is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=1060612&subref=simplesearch.

Mr. Andrews will provide additional analysis at the Gartner Symposium/ITxpo, October 18-22, in Orlando, Florida. In the session "Gartner Magic Quadrant and MarketScope: Information Access Technology and E-Discovery," Mr. Andrews will offer a visual snapshot of e-discovery's direction and maturity, as well as the leading participants.

Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. It is the industry's largest and most important annual gathering of CIOs and their senior IT leaders. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency. Additional information is available at www.gartner.com/symposium/us.

Members of the media can register for the event by contacting Christy Pettey at christy.pettey@gartner.com.

About Gartner:

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its 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, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

Labels: 2009 eDiscovery Predictions and Trends, eDiscovery, eDiscovery Best Practices, Enterprise Search, Gartner, GRC

posted by Charles Skamser @ 12:10 PM 1 Comments

The Financial Crisis of 2008 and SaaS Based eCompliance

Over the next few weeks, as we all try to digest all of the information and subsequent analysis about the causes of the 2008 financial crisis, I am planning to investigate the various Software-as-a-Service (SaaS) based eCompliance and eGoverance solutions and what impact they can have on diverting future problems in the financial markets.

Is more government oversight and regulation the answer? "After Monday's Wall Street meltdown, businesses are likely to face increasing compliance scrutiny, " stated John Bace, research vice president of Gartner IT Management Group, in a recent keynote address at the Midsize Enterprise Summit in Grapevine, Texas. "The shadow of yesterday [Monday] will be longer than Enron, Sarbanes-Oxley, HIPAA, or any other regulation of modern times," Bace told a crowd of about 300 CIOs.

And can SaaS based solutions with the ability to enable centralized, nearly real time and very granular information management be the right technology at the right time? As an example, would simple SaaS based email archiving technology coupled with a rules based search engine to identify internal discussions about pending insolvencies or short sale tips be valuable in the quest to avert the next crisis? As stated, over the next couple of weeks, I plan to investigate this and report my finding on this Blog.

As such, any input from any of the current SaaS based eCompliance and eGoverance providers would be greatly appreciated.

Labels: 2008 Financial Crisis, eCompliance, eGoverance, Gartner, Saas, Software-as-a-Service

posted by Charles Skamser @ 8:04 AM 0 Comments

Update on SaaS in the Litigation Market

Software-as-a-Service (SaaS) adoption rates are finally beginning to accelerate in the overall information technology market. Therefore, I thought that is was time for quick update on how SaaS is doing in the litigation market. Is the "jury" still out or are law firms and corporate legal departments following the rest of the pack on adopting SaaS?

Gartner Estimates
Technology research firm Gartner Inc., based in Stamford, Conn., estimated companies spent $5.1 billion on SaaS programs in 2007 worldwide, up 22 percent from 2006. That's expected to double by 2011. Ben Pring, a Gartner outsourcing and information technology analyst, expects about 15 percent of all business software sold to be accessed via the Internet five years from now.

Venture Capital Going SaaS Exclusive?
VC invested currently in software startups is almost exclusively going into SaaS companies. "If you go to a VC and say you've got this great application, this wonderful code, and you're going to put it on CDs and mail it out to all your customers, you'll be laughed out of the meeting," Pring said. But he said the shift to SaaS is in its infancy, and many small-to-medium-sized businesses still aren't comfortable handing their critical software functions and data to an outside vendor.

Salesforce.com Success Factor
In a recent article by Greg Avery of the Denver Business Journal titled "InfoNow, Webroot are on SaaS wave: Software as a service catches on", indicates that the SaaS model -- sometimes referred to as "on-demand software" or computing "in the cloud" -- took hold in the past couple years, fueled partly by the success of San Francisco-based Salesforce.com, which has 36,000 business customers. That company, which promised "the end of software" when it launched in 2001, showed businesses could use important programs remotely and securely keep sensitive company information in someone else's data center.

Mr. Avery went on to say that that trend also has begun transforming Boulder-based Webroot Software Inc., one of the area's most successful traditional software businesses. Webroot sells one copy of its anti-spyware blockbuster program, Spy Sweeper, every 10 seconds. The product resides on the computer hard drives of more than 7 million consumers, and its distinctive green box is outsold only by bottled water in the nation's Best Buy stores. And yet, following its November acquisition of Britain-based Email Systems, Webroot is using SaaS email to break into the small- and medium-business market. SaaS email works like hotmail.com or Google email, only it's designed more for business use. The 300-employee company has 2.5 million business email customers worldwide and expects a lot of growth this year, CEO Peter Watkins said. By summer, the company plans to start selling businesses a hosted website-filtering service that's designed to keep corrupted or inappropriate sites from being accessed from client's computers. Webroot's SaaS offerings to businesses are expected to become the fastest-growing part of the company, Watkins said. Designing the key functions of the software once and hosting it in a Webroot data center eliminates the integration and custom code-writing headaches that business software development normally entails. That makes buying a SaaS product more efficient for customers and a better business model for Webroot, Watkins said. "From my side, it's dramatically more cost-effective," he said. "And that means I can put more money back into the product."

SaaS in the Litigation Market
Spending the better part of almost every business day working with law firms and corporate legal departments to address their legal and compliance ESI needs, my perspective is that SaaS is catching on in the litigation market also. With no hardware of software to install and maintain for the end users and pay-as-you-go subscription based pricing, the general SaaS model is a great fit for the fee based litigation market. And, with many of the data security myths having been addresses with the SaaS vendors moving to Tier-1 data centers such as Level 3, many of the road blocks previously setup by internal IT personnel, are no longer really valid (i.e. the SaaS vendors can provide a more secure and reliable data center than the end users can provide). I would say that one of the last legitimate roadblocks to the full scale adoption of SaaS is the current restrictions that bandwidth place on moving massive amounts of data over the Internet. And, based upon the explosion of ESI, this is one of the requirements in the ligation market. However, with bandwidth increasing along with the proliferation of compression technology, this is also becoming less of a legitimate issue.

Current Crop of SaaS Products and Vendors
Although this is not a comprehensive list of all of the SaaS vendors in the litigation market, it is a list of the SaaS (or SaaS like) technologies and vendors that I have reviewed and believe either have a significant enough client base or sufficiently advanced technology (i.e. true mutli-tennancy with self provisioning, etc.) to be considered a player:

Lexbe
Lexbe.com is a web-based case analysis and evidence management application. Case analysis features include fact and issue analysis, case calendaring, tracking of case participants, deposition analysis, case research, fact tracking and dynamic chronology and timeline generation. Document management features include full-text search, automatic optical character recognition (OCR) of PDF files, document sorting, retrieval and repository, native file review, metadata analysis, document coding, document encryption and off-line access. Lexbe.com is offered on a ASP software-as-a-service (SaaS) basis, so users can access the Lexbe Online application from any web-based computer without the need to install or maintain software. Lexbe.com is available starting at $79/month, with no set-up, cancellation fees or individual user license fees. A thirty-day free trial and online web demos are available at http://www.lexbe.com/.

ImageDepot
ImageDepot, based in Houston, Texas, is an emerging true Software-as-a-Service (SaaS) based Online Review Tool (ORT) that provides all of the rich features and advanced functionality expected from today's ORT's without all the infrastructure or associated costs of maintaining your own system. ImageDepot is available on a pay-for-what-you-use monthly subscription plan with no software or hardware to purchase and no user fees. Click here to access an online Video overview of ImageDepot. More information is available on their website at http://www.imagedepot.com/.

Ringtail
Ringtail Legal from FTI is an easy-to-use litigation document management platform. Offering the industry's best document review tool, Ringtail Legal offers flexible data management and electronic evidence discovery via an intuitive web interface, which provides geographically dispersed legal teams with instant access to every relevant case file. Built on Microsoft SQL Server for scalability, the software solution can handle hundreds of users at once and sort through thousands of cases and millions of documents quickly and accurately. The secure technology allows collaboration using a regular web browser rather than a cumbersome installed program or Citrix access. Easy to customize, the application conforms to the unique requirements of each case. Users also have the ability to add fields to the SQL data model and change the workflow without the need for dedicated – and costly – SQL talent. Ringtail Legal may be installed directly or hosted on the FTI Tier 4 ASP. Either way, users retain complete ownership of attorney work product. Ringtail Legal provides a comprehensive suite of features, including the ability to review native documents using the application that created them, saving the expense of creating thousands of TIFFs. And the product integrates with a wide variety of leading litigation support technologies, including Attenex, SER, dtSearch and CaseMap. More information is available on thier website at http://www.ftiringtail.com/web/.

iConnet Development, LLC
iCONECT Development, LLC is a world leader in litigation support and collaboration software, with products used by law firms, corporate legal departments, Fortune 500 corporations, government agencies, and medical firms. Powered by Oracle technology, iCONECT’s LAN, Web, and Offline solutions enable more than 50,000 end users to review and manage electronic and document discovery from anywhere in the world for effective collaboration with outside counsel, branch offices, and consultants. Past awards include #1 Online Document Repository (AmLaw Tech Survey), #1 Litigation Support Software (Law Technology News Awards), and #1 Web-Based Litigation Software (AmLaw Tech Survey). More information is available on thier website at: http://www.iconect.com/.

CaseCentral
CaseCentral delivers on-demand discovery lifecycle management platforms to corporations and law firms. CaseCentral’s software is backed by responsive, litigation-savvy strategic consulting, process, and support services. CaseCentral empowers customers to support a repeatable business process for litigation and regulatory response—reducing risk and business disruption, boosting productivity, and controlling costs. Founded in 1994, CaseCentral is headquartered in San Francisco, California and maintains sales and support offices in New York City and Washington DC. CaseCentral’s client list numbers over 1,100 law firms and corporations and includes 81 of the top 100 U.S. law firms. CaseCentral is consistently chosen to handle many of the most complex and highly visible litigation projects in the nation. For more information, call 1.800.714.2727 or visit http://www.casecentral.com/.

MessageOne
Headquartered in Austin, Texas, MessageOne is the leading provider of managed services for email management, archiving and business continuity. For enterprise email and wireless messaging systems, the company’s Email Management Services (EMS™) provides comprehensive email archiving, storage management and e-Discovery with the total continuity, recovery, and security protection only available from a managed service. In addition, MessageOne’s AlertFind™ provides guaranteed emergency notification and escalation to help companies protect their employees during any crisis or disaster. Millions of users around the world depend on MessageOne for its award-winning managed services. More information is available on their website at http://www.messageone.com/.

Advologix.Com® LLC
Advologix.Com® LLC, based in Houston, Texas develops and sells AdvologixPM™, the world’s first comprehensive web-based Law Practice Management Software-as-a-Service (SaaS) suite for law firms of all sizes. For more information or to sign up for a free trial evaluation of AdvologixPM please visit http://www.advologixpm.com/.

RocketMatter
Rocket Matter, LLC is a Florida-based technology company providing premier, web-based software for the legal services industry. Rocket Matter, in Beta since November 2007, exemplifies our simple, imaginative, Software as a Service (SaaS) approach to developing a superior software experience. RocketMatter provides increased security, business continuity, decreased technology infrastructure and maintenance, and improved ROI for IT expenses for solo and small firms. Our philosophy is predicated on pairing intuitive, tailored, well-designed software with exceptional customer service. Ubiquity is important in our software design: Our offerings work on Linux, Mac, Windows, as well as most on mobile devices. Client interaction is essential to our process; we involve our customers early and often in the design process. More information is available on their website at: http://www.rocketmatter.com/.

Note to SaaS Vendors
If your SaaS legal solution is not listed and you would like me to review it and list in my next posting, please contact me at mailto:ediscoveryconsultant@gmail.com

Labels: Advologix, CaseCentral, Gartner, iConnect, ImageDepot, Lexbe, MessageOne, Ringtail, RocketMatter, Saas, Software-as-a-Service, VC, Venture Capital

posted by Charles Skamser @ 10:18 AM 1 Comments