E-Discovery Search and Storage Providers Await a Litigation Boom Following Financial Crash

By Chris Preimesberger  |  Posted 2008-10-06 Email Print this article Print

E-discovery providers stand to gain from the Wall Street financial crisis, as potential customers such as investors, shareholders and pension funds prepare to pursue or defend lawsuits. E-discovery firms such as Kazeon, Autonomy, Clearwell Systems, Attenex, Symantec, Seagate Technology's MetaLINCS, Iron Mountain's Stratify, LexisNexis, Recommind and some other smaller companies are in good standing to gain business from what many expect to be a surge in litigation surrounding the Wall Street financial crisis.

Now is a good time to be an e-discoveryware provider.

Companies such as Kazeon, Autonomy, Clearwell Systems, Attenex, Symantec, Seagate Technology's MetaLINCS, Iron Mountain's Stratify, LexisNexis, Recommind and some other smaller companies stand to gain business from what many expect to be a surge in litigation surrounding the Wall Street financial crisis.

These companies, by nature, like to talk about "proactive and reactive" e-discovery. It's good business for potential customers to look ahead and be prudent about being prepared for potential litigation, not to mention good business for the e-discovery providers.

"Proactive e-discovery" means "information management."

Electronic records management software has become a strategic tool for organizations due to increasing national and regional regulations such as the 2006 additions to the Federal Rules of Civil Procedure, the Sarbanes-Oxley Act, and the Data Protection and Freedom of Information acts.

E-discovery itself is the process by which records are gathered and processed for litigation. This includes anything digital: word processing files, photos, e-mail, audio and video files, instant messaging transcripts, Internet bookmarks, and even data center users' logs.

The financial crisis may mean big business for segments of the tech industry. Click here to read the full story.

The e-discovery folks have a point. When lawyers show up in the front lobby, and if their complaint becomes actual litigation, the courts will want to see that an enterprise has corporatewide policies and processes in place to facilitate the discovery of all information-digital and non-digital-relevant to the case. It's now the law.

The amended Federal Rules of Civil Procedure (the second anniversary of their implementation by the Supreme Court is coming up Dec. 1) clearly require enterprises to be responsible for keeping close tabs on all their own corporate records and communications-as well as personal communications created during business hours and/or on business or personal computers. Preordained policies must be in place for storage, security and accessibility of the information.

Often, companies being sued are given only 30 to 60 days to produce such evidence, or else face stiff fines and court costs until the information is produced.

"The effects of the bailout package passed by the House and Senate last week [on the e-discovery industry] are probably going to come in this [fourth] quarter," Karthik Kannan, vice president of marketing and business development for Kazeon, a respected e-discovery software provider, told me.

"In the last couple of years, we've had significant traction and sufficient growth. But we have barely touched the tip of the iceberg in terms of market availability, from an addressable market standpoint."

Kannan said he thinks this Wall Street-centered meltdown clearly will be a further impetus "to get people to call us. We are seeing that more people are adopting a proactive position on information management," he said. "We are also seeing more hits on our Web site the last couple of months."

An e-discovery strategy should be considered a fundamental part of an IT infrastructure, so that enterprises can be prepared-and not just for litigation, but for general data structuring and data management, Kannan said.

Five technology businesses are poised to boom during the financial crisis. Click here for the full list.



Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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