CMSWIRE: THE CONVERGING PATHS OF SEARCH, EDISCOVERY AND ENTERPRISE CMS

Enterprise content management is always a hot topic. It gets even hotter when you start talking about mergers and acquisitions. This is why the Autonomy / Interwoven deal got so much attention in January. One of the biggest ECM vendors is snapped up by one of the biggest Search vendors — and in the name of eDiscovery and compliance.

Is this acquisition a sign that we can no longer look at these three areas as separate and individual? That the tools are converging and perhaps becoming secondary to the mindshare that sits behind that technology?

Craig Carpenter, Vice President of Marketing and General Counsel at Recommind, a provider of Search and Information Access solutions, took some time to talk with us about what the Autonomy/Interwoven deal means for the search and eDiscovery markets and how enterprise content management can’t escape the inevitable ties to either one.

The Autonomy / Interwoven Deal

Autonomy may be a very smart company. They appear to be working very hard towards gaining major exposure in the eDiscovery market. With their acquisition of Zantaz, they gained a strong tool set for the eDiscovery space. With Merido, they picked Records Management capabilities.

The move to acquire Interwoven has fit nicely into their patchwork quilt of capabilities for the eDiscovery market. This, of course, is not because Interwoven is strong in enterprise content management or offers a top notch eDiscovery technology. But because they have a big piece of the legal market — the people who constantly look for compliance and eDiscovery solutions.

Autonomy has seen the light. That light is the growing need for strong eDiscovery solutions. The problem is, eDiscovery is as much about the people who know it well, as it is about the technology. And this is where Autonomy may fall short.

Growing your technology and expertise organically takes a lot of time. Maybe too much time to keep ahead of the pack in a market like eDiscovery. The challenge with acquiring other vendors with established market presence though is the risk of losing the mindshare that built that market presence.

This is what happened with Zantaz. Much of the knowledge in that company walked away when Autonomy acquired them. Many have said the Autonomy culture is a tough one, so the question for the Interwoven deal is — will we see the same thing?

If Autonomy really did buy Interwoven for its legal market connections, don’t they need to keep Interwoven brain pool to continue to build those relationships? If the Interwoven mindshare walks away, what will this do to Autonomy’s plans?

It’s About Trusted Relationships

Craig Carpenter says Recommind’s M.O. is different from Autonomy’s. They have placed a premium on trust and longevity in the market. And on satisfied customers. With search as their sweet spot, they have a legacy of supporting professional service markets for high-end knowledge workers — like lawyers and accountants.

These deep relationships are what led them to eDiscovery a few years ago. Law firms and legal departments have strong inter-communication. These guys really talk to each other, so relationships mean a lot in the eDiscovery market.

Carpenter says the most important part of eDiscovery is not the technology. The most important part is a solid understanding of the processes, the workflow and the people. Any solution must be able to solve the problem and be easy to use.

So much data is being generated and the media used to generate it is so diverse, that organizations don’t have a choice when it comes to implementing eDiscovery solutions. And it’s not going to go away — increased regulations are coming. Add the problems with the economy to that pile and you see that strong solutions are required.

Integration with Enterprise CMS

eDiscovery solutions do not stand on their own. Carpenter says they are seeing a convergence of tools in the areas of search, eDiscovery and Enterprise Content Management. Add to that Records Management and Archiving and you can imagine what it means for the Enterprise Content Management industry.

ECM vendors are typically very large and often slower to adapt to new technologies and needs. At the same time, they need to continue to grow to survive. These vendors are looking for new markets to sell their solutions to. They often do this by partnering with other technology providers to reach new markets faster.

Open Text’s relationship with Recommind is a prime example of this. Open Text’s new eDiscovery Early Case Assessment is built upon Recommind’s Insite Legal Hold application. Carpenter says that working with Open Text has also given them access to a new install base, so it’s been a win-win situation.

Predictions on the Future

Open Text is just one example of the growing move to partner to bring new eDiscovery solutions to market quickly. The question is, will this trend continue? Or will Enterprise Content Management vendors start working on their own solutions in-house? Craig Carpenter thinks ECMs will choose to partner first with an established eDiscovery partner – at least for the short term (12-24 months).

Why? Because as we said earlier, eDiscovery is not just about the technology. The eDiscovery market is different — the risk profile is different.  It’ is important to have domain expertise and that is what vendors like Recommind have. It’s also what Autonomy is going to need to truly gain a foothold in the market.

Long-term you will see ECMs build this functionality into their solutions more closely, but it will be by a combination of building, buying and partnering.

Craig Carpenter believes Recommind is positioned to do well. They are a software company first, but they have also worked diligently to understand the needs of their customers and built their solution based on those needs. Where necessary, they too, will partner to build the right stuff.

As for Autonomy, well they haven’t finalized the Interwoven acquisition so it may be some time before we see what happens to the Interwoven team and technology. What we are seeing though, is Autonomy’s continued presence in the compliance and eDiscovery market with solutions such as the Conceptual Search Module and ControlPoint for Multimedia for SharePoint.

The convergence of search, eDiscovery and Enterprise Content Management will continue. Carpenter says he expects to see more acquisitions this year that will demonstrate this. We watch to see what happens. Who do you think will make the next move.

WALL STREET & TECHNOLOGY: E-DISCOVERY REQUESTS LOOM LARGE FOR FINANCIAL SERVICES FIRMS

As regulators delve into firms’ archives to try to pin down responsibility for the current financial meltdown, experts anticipate that litigation will rise sharply. The FBI already announced that it is investigating Freddie Mac, AIG and Lehman, and it is expected that countless other firms will be asked to produce data to support other investigations.

Vivian Tero, program manager for compliance infrastructure at research firm IDC, says e-discovery already has risen on Wall Street’s priority list. “The selling cycle [for e-discovery products and services] has become shorter. The need is immediate — firms have regulators breathing down their backs,” she explains. “Many companies are very worried and concerned, and want systems to respond [to potential e-discovery requests].”

Litigation is on the rise, confirms Rob Brunner, senior managing director in the technology practice at FTI Consulting. “We’ve already been seeing a lot of class action lawsuits and shareholder lawsuits,” he says.

Brunner suggests it is particularly important for firms that are merging or acquiring other companies in the current meltdown to prepare themselves for e-discovery requests. But given the urgency with which mergers and acquisitions are occurring lately, that is a considerable challenge, he acknowledges.

“When Bear Stearns and WaMu were acquired by J. P. Morgan, or Merrill Lynch by Bank of America, each transaction happened within two short weeks. Often that speed means assets have changed hands so rapidly that there may be some residual company that has to produce e-mail for discovery that doesn’t yet own the systems to do it,” Brunner says. “If I sold part of my operational arm to another entity and I’m facing an [e-discovery] request from an oversight committee, I might not yet own the systems to produce the e-mail.”

The key to being prepared for an e-discovery request, according to Brunner, is to make sure companies have access to the information they need to defend themselves even after an acquisition or merger. That means having the ability to collect, analyze and produce the structured and financial data behind business events.

Of course, e-discovery vendors are positioning their products and services to capitalize on the opportunity and are seeing increasing traction in the industry. Financial holding company Raymond James, for example, uses AXS-One‘s technology for archiving e-mails and instant messages as well as Bloomberg messages, and recently deployed Orchestria’s review system, which provides a policy-compliance monitoring tool.

Enabling Smart Search

“It identifies e-mail or communications that might be fraudulent or may have violated internal policies,” says Josh Bohlander, senior manager for technology product management at Raymond James. “It’s been very helpful in identifying any items that may come out for e-discovery or internal discussion.” The technology, he explains, searches for words, phrases, or positive or negative indicators. “It’s much smarter than keyword search,” he contends.

The key to efficient e-discovery, experts suggest, is automation. Vendors such as Stratify, an Iron Mountain company, even offer technology to organize and structure large volumes of documents without any input from the document creators. According to Ramana Venkata, Iron Mountain SVP and Stratify GM, the technology automatically places the documents in groups based on conceptual similarities.

“It can put together all the documents that seem to be discussing financial affairs, and keep those segregated from those discussing IT issues, as in network alerts,” he says. “Unlike a traditional search where you have to type in specific words, Stratify allows you to get a bird’s eye view of your table of contents before you even start searching.”

Recommind’s Insite Legal Hold solution also allows enterprises to explore information where it resides — before it is collected and organized in response to an investigation or lawsuit. The vendor claims the technology allows enterprises to collect and hold only the data necessary for a given proceeding, rather than having to index and aggregate large amounts of data without the ability to determine their relevance prior to collection.

Kazeon‘s Federation technology enables global organizations to review and process data housed in dispersed data centers without transporting it to a central repository. “We carry the searches out in-house,” says Kazeon CEO Sudhakar Muddu. “The data never has to leave [the client's site].”

Other e-discovery vendors are promoting cloud computing for archiving. “We have a large storage grid in a cloud,” relates Gary Steele, CEO, Proofpoint. “As the storage grid gets bigger, it can spread the data more efficiently so it can be found more easily. It gives customers the benefit of not having the cost of managing the information.”

According to Steele, Proofpoint’s appliance sits next to a client’s mail server. It pulls the information from the company’s server, encrypts it with a key that is held by the customer for maximum security and then sends the encrypted data to the storage grid in the cloud.

“As a way of keeping spiraling costs in check,” says Forrester analyst Brian Hill, “firms are also looking at software-as-a-service (SaaS) models. Historically there have been concerns with security and privacy. But SaaS has been doing a good job of addressing these concerns. Also, their pricing model, where you’re essentially renting software, appeals to a number of enterprises as it’s less expensive up-front.”

Ultimately, Michael Mills, director of professional services and systems at law firm Davis Polk Wardwell, says it is essential for companies to keep up with newer technologies in order to make sure they can respond to litigation efficiently. “If you’re using today the same software tools you used two or three years ago,” he asserts, “you’re not keeping up.”

Controlling Your Own Destiny

As e-discovery looms larger and larger over firms, many are taking control of their e-discovery technology buying decisions from outside counsel and bringing them in-house, according to Forrester’s Hill. “Previously enterprises worked with outside counsel who had a high degree of latitude in picking technology solutions they thought were best,” he says. “Part of the trend now is for enterprises to make a short list of vendors their legal counsel can work with.”

Beyond technology, companies also should reevaluate their processes on the whole, e-discovery experts suggest. Davis Polk Wardwell’s Mills underlines the importance of developing standardized processes. “If you’re investing in a new way of doing things, you’re going to increase costs and take bigger risks. So you want to develop standardized processes,” he says.

Likewise, Marie-Charlotte Patterson, VP, marketing, product management, at AXS-One, suggests that for maximum efficiency companies should be proactive in their e-discovery efforts. “The evolution for technology is one that allows you to be better prepared for litigation as well as being able to do early case assessments so that in the event of pending litigation, you can identify what information you have electronically stored and what position it puts you in relative to litigation,” she says.

Further, firms should avoid looking at e-discovery in isolation. Rather, Patterson suggests, companies must understand the extent to which business, risk and compliance are intertwined. “Rather than looking at both e-discovery and regulatory compliance from a siloed perspective, you should look at them holistically,” she says.