Consolidation Consolidation Everywhere!

Wow! The consolidation of the technology industry continues with recent activity in the storage, compliance and eDiscovery sectors. Yesterday came the announcement of email archive software company Symantec Corp.’s purchase of privately-held Clearwell Systems, Inc.  Assuming Symantec is able to pull off what no other consolidation has done so far, this could mean a solution that will finally make the ESI management, preservation, processing, review and production of ESI in one application possible. The struggle for these applications to date has been integrating from the left side of the EDRM.  They have historically struggled beyond Information Governance (Records management) and Litigation hold features where downstream features are important and downstream integration with preservation, processing review and production must be seamless and scalable. In other words, they do a pretty good job of managing and placing ESI on litigation hold, but they do a horrible job of everything downstream. There have been similar marriages and so far nobody has nailed it yet. This commentator for one is holding out great hope for this one.

This week also saw Autonomy announce that it would acquire the “Digital Assets” of Iron Mountain. Among those digital assets acquired - Stratify. Stratify is an eDiscovery product that competes with Clearwell, Relativity, Viewpoint, iConect and other similar applications in that space. Stratify has been around for some time but was never really able to sustain deep market penetration. Iron Mountain purchased Stratify in January 2010.

This year has also seen companies like StoredIQ and Nuix both receiving significant additional capital investments to remain competitive. The year so far has been packed with movement in the software and related services industry with the purchase of Encore by Epiq and Huron’s acquisition of LECG’s eDiscovery unit. These are just a few of the recent moves in what has become a very fast paced and quickly changing landscape. This is not a new trend, however. Consolidation and divestiture will continue.

So, what does this mean for the consumer of these services? There will continue to be market confusion with fewer choices in some areas with many, many more choices in others. Much more complex applications with orders of magnitude more features and functionality will be available. Our current cost structures will continue to change with some pricing models that simply won’t work going forward. We expect to see the GB pricing model go away.

We’ve seen many product changes and some new technology roll out over the past few years. iConect entering the processing and analytics space with their INCEPT product, or Dr. Roitblat’s latest’s endeavor in the advanced technology space with his answer to Recommind’s “Predictive CodingTM” feature. OrcaTec’s technology is OrcaCategorize.

There will be much more emphasis on workflow and procedure. A big, complex, multifaceted application does no one any good without the proper process. Otherwise, we will just continue to have what we have had up until now – the creation of new technology and integration without sufficient adoption. Translation – they are making it, but nobody is buying in large numbers.

And what is the good news for some of us and our clients? Those of us that advise across many different technologies in the services industry will benefit from the competition, innovation and investments. So, Symantec, Clearwell, iConect, Autonomy, Lateral Data, FTI and all you other movers and shakers in the software world, keep up the good work!! Innovate, compete in a fair and honest way, but don’t lose whatever it is that you had. Whoever it is that you were, you got there because of your people, your culture and your customers. It is not just software integration that you must do when you bring two worlds together. It is the integration of two cultures. I know what you’re saying – we got it. Iron Mountain thought it had it when it bought Stratify a little more than a year ago. History tends to repeat itself if you are not careful.