Compliance Worries Drive E-Mail Archiving Market

An IDC study finds that the use of e-mail archiving software is growing exponentially with the increase in enterprise message volume and the need for regulatory compliance.

The use of e-mail archiving software is growing exponentially, fueled by the explosion of e-mail messages and other electronic communications, as well as by concerns about regulatory compliance and other factors.

International Data Corp. of Framingham, Mass., which released a report on e-mail archiving earlier this week, noted the softwares drastic growth, from $33 million worldwide two years ago to $180 million in 2004.

IDC expects e-mail archiving software to continue growing at a compound annual rate of 50 percent through 2008.

One of the primary reasons for growth of e-mail archiving applications—which help organizations store, index and retrieve individual e-mail messages and file attachments in an automated way—is the sheer number of e-mail messages.

"The amount of information that must be stored continues to increase by leaps and bounds," said Mark Levitt, research vice president for collaborative computing at IDC.

To back that up, Levitt cited IDCs most recent annual e-mail usage study, which found that the size of business e-mail volumes sent annually worldwide increased by 47 percent from 2003 and more than doubled from 2002 levels.

Its because of growth like this, Levitt said, that IT departments are looking for ways to make their storage more cost-effective without sacrificing users ability to retrieve e-mails quickly and easily.

Regulatory compliance is another major driver, especially for companies in the financial, health care, pharmaceutical, utilities, government and other regulated industries. These organizations must give regulators access to e-mail content upon request.

/zimages/3/28571.gifClick here to read about e-mail archiving in the health care industry.

"The introduction of legislation such as the Sarbanes-Oxley Act of 2002 and the Health Insurance Portability and Accountability Act [HIPAA] has significantly increased the importance of managing, securing and storing all information within the enterprise," the report stated.

"More specifically, because of regulations such as SEC Rule 17a-4 that are very prescriptive for the retention for e-mail, and the numerous and very costly public lawsuits in which an e-mail has been the deciding factor, e-mail has emerged as one of the most important content types that need to be retained."

Litigation support is another factor. The need to provide e-mail information in support of litigation can be difficult with traditional e-mail systems, where information may be located in several different systems, the report noted.

The e-mail archiving market continues to change as it grows, thanks to a spate of mergers and acquisitions over the past few years. During 2003 and 2004 alone, Veritas acquired KVS, EMC acquired Legato, Zantaz acquired Educom TS, and Open Text Corp. acquired IXOS.

Levitt said he thinks most e-mail archiving will be deployed through solutions dedicated to e-mail archiving solutions instead of through e-mail archiving functionality embedded in other enterprise systems such as content management, messaging, archiving and compliance solutions.

"The common customer preference for a particular best-of-breed product or service often lasts years before customers start accepting less than what they consider to be best in the interests of more standardization and efficient management," he said.

In addition, many e-mail archiving solutions will be deployed before e-mail archiving becomes widely available in embedded solutions, and companies in regulated industries cant afford to risk noncompliance while waiting for e-mail functionality to become embedded, Levitt said.

Companies motivated by mailbox management or litigation support are more able to wait for embedded solutions, he said, but they also will be inclined to choose best-of-breed solutions. He added that vendors with related solutions may choose to make e-mail archiving available as an add-on module.

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