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Tuesday, June 19, 2007

The Cost of Doing Business

A couple of weeks back, I was on the receiving end of my company’s first summons. It was a trivial issue that resolved itself within a couple of days. But it gave me some insight into how my customers (typically, large companies) think about these things.

My first reaction was shock (“How could this happen? There must be some mistake”). That feeling was soon eclipsed by outrage (“This is ridiculous, we haven’t done anything wrong”); which was followed by regret (“I wish we had just avoided this situation”); finishing up with irritation (“I can’t believe I have to waste time on this when I have so much real work to do.”)

When I mentioned this reaction to a couple of our customers, they just chortled to themselves and suggested that I get used to it: as your business grows, they said, you can be certain that more of these will follow.

That’s when it struck me: dealing with these issues – and by implication, e-discovery – is by no means unusual; it has become part of the cost of doing business. In the same way that companies pay their taxes or process employee visas, they respond to subpoenas, demand letters, and regulatory inquiries. Whether they themselves are directly implicated in wrongdoing, or they were innocent bystanders who had nothing to do with it, doesn’t make any difference. They have to do the work all the same.

With this in mind, I feel better prepared for the next summons, whenever it comes. Right now, we are focused on recruiting and training; at some point, if all goes well, we will get to e-discovery.

Wednesday, June 13, 2007

Open Platforms in E-Discovery

Most large companies face a dilemma. Should they open up their products and invite others to build features on them, creating a “platform” or ecosystem around themselves? Or would that be inviting the proverbial fox into the hen-house, meaning they should instead prevent others from integrating with their product or leveraging it to create add-on functionality?

In the internet world, there is no doubt about the answer: throw open the doors via easy-to-use APIs (“application programming interfaces”) and let a thousand flowers bloom. That’s what FaceBook did a couple of weeks back with their announcement of the FaceBook Platform, and it has already led to hundreds of new applications for their users. It is what Skype did so effectively, creating a mini-industry around themselves of voicemail, skins, ring-tones, and more. Even eBay, which has jealously guarded its feedback ratings and has habitually crushed smaller companies in its cross-hairs, is embracing the open platform mantra, announcing this week that third-party companies can build features that work with eBay in new ways.

By contrast, telecom companies live in a world of closed standards. Even in the wireless industry, which is arguably the most competitive part of the telecom world, the carriers (Cingular, T-Mobile, Verizon, etc.) exact a heavy toll on any application trying to reach their handsets. As friends in the industry tell me, “There’s a reason why there has never been a billion dollar mobile application company.”

In e-discovery, the large technology vendors like EMC, HP, Symantec, and ZANTAZ face the same choice. Their email archiving products store huge amounts of data. Should they let 3rd party e-discovery software analyze that data, giving their customers more choice? Or should they slam the door shut, and try to force customers to use their own proprietary e-discovery applications?

The answer, it seems, depends on what they want to be when they grow up. As the market leader, Symantec is confident enough to open its archive (Enterprise Vault) to 3rd party applications while offering customers its own Discovery Accelerator for litigations holds and some document review. Similarly, perhaps because of its powerful brand, HP focuses on storage optimization with HP RISS and partners with e-discovery software, often with huge savings for its customers. On the other side of the coin, smaller companies like ZANTAZ and Mimosa see themselves as e-discovery companies: they seek to leverage their storage products to get customers to also buy their e-discovery applications.

In the long-run, my feeling is that any archive of any stature will have to adopt open standards. Customers will demand it, and (unlike telecom companies) the archive vendors do not have the market power to resist. Over time, they will also come to appreciate (as HP and Symantec do now) that enabling 3rd party applications to analyze the data they store is to their advantage, since it creates a powerful, additional incentive to store more information in the archive.

Sunday, June 3, 2007

What Web 2.0 Applications Can Teach Enterprise Software

The other day, I came across the fascinating statistic that over 50% of products returned every year to stores across America have absolutely nothing wrong with them. Apparently, consumers used them for an average of 20 minutes and then gave up, because they were too complicated.

At this point, most customers of traditional enterprise software could be forgiven for thinking: “I wish I could do that.” Enterprise applications are notoriously feature-laden, complicated to use, and difficult to install. They make their users feel stupid, by presenting them with complex pictures that look like amoeba or toolbars with 150 different options. Why does enterprise software seek to punish its customers in this way?

Partly, because customers ask for it. Whether they are buying a dishwasher or an accounting application, people habitually over-estimate their ability to figure out how a complicated product works and, as a result, pay more for features that they never use. Partly, it’s because enterprise software is designed by engineers who think everyone is as technically proficient as they are, and by marketing people who view every additional feature as a new selling point.

By contrast, Web 2.0 applications such as FaceBook, Flickr, StumbleUpon, or Meebo are incredibly easy use. Even an idiot who has never seen these applications before can use them without an instruction manual or a training course. You could say that’s because they are trivially simple applications. But I think it’s primarily because, if they were not so easy to use, people would simply click away and try something else – i.e., they would die.

That to me is the real lesson that Web 2.0 apps can teach enterprise software: make something that is easy to use, easy for someone to install, and easy for them to evaluate. Get people addicted to your application because it’s so good (the average FaceBook user spends 4+ hours a day on the site). No doubt, this is harder to do with enterprise applications because they are inherently more complex. But figure out a way to hide the complexity, packaging all the functionality users need into a design that’s easy to use. This is a key characteristic of e-discovery software applications; it's the genius of salesforce.com's CRM application and Apple's iPod; and, it needs to be a core skill of any company creating enterprise applications today.