Symantec’s “E-Discovery Connectors” For Enterprise Vault: What Are They and Why Should You Care?

Today, Symantec announced 3 connectors for Enterprise Vault, for analytics, review and content collection. According to the announcement, these will “provide tight integration with third-party case management, review, analytics, forensics and desktop collection tools.”

The idea that archives should integrate with third party products is one I whole-heartedly support and have written about before. My company, Clearwell, has been working with Nick, Scott, and the gang at Symantec on this for over a year. They tell us that we were the first to integrate with Enterprise Vault and, to our knowledge, we are the only ones who have deployed fully integrated e-discovery solutions with Enterprise Vault at several enterprises.

Having said all that (and climbing down from my soapbox), I think Symantec’s customers will need to read this announcement very carefully to understand what it means. To give them a helping hand, let me translate it from corporate-marketing-speak into plain English:

Symantec is releasing 3 connectors which enable customers to ingest files from EnCase and export files to Summation and Ringtail. It is also exposing a new application programming interface (API) so that third-party vendors can more easily build their own connectors to Enterprise Vault.

At this point, most people’s eyes glaze over and they ask “who cares”? Surely, only techies get excited about something as esoteric as a new API. But as the recent excitement over FaceBook’s API has shown, opening up a platform – even in a limited way, as Symantec is doing – can unlock tremendous value. For those customers with Discovery Accelerator v.7.5, the new API will have a huge impact for 2 reasons:

1. It makes integration with Enterprise Vault much easier, so lots more vendors will do it. In their press release, Symantec mentions a handful of companies who are building connectors to the new API and I’m sure more will follow. This increases customer choice, and makes it more likely that Symantec customers will be able to select related products that closely fit their needs;
   
   
2. It enables enterprises to have a smooth workflow across all aspects of e-discovery, from collection/preservation to analysis/review to production/presentation. For example, companies can now collect information in Enterprise Vault, preserve it by placing a litigation hold on key information via Discovery Accelerator, and then seamlessly hand off that information to a third party application (like Clearwell) for review and analysis. This saves a lot of time that would otherwise be wasted on importing/exporting data from different systems, and reduces the risk that something gets lost in the shuffle.

Net net: companies do well by giving customers what they want, and customers want end-to-end e-discovery solutions. Symantec is not the only one to have figured this out; stay tuned for more announcements like this from other archiving vendors.

Autonomy Buys ZANTAZ: True Love Or A Marriage Of Convenience?

People get married for a million different reasons. Some do it for love; some for a green card; some because their parents tell them to; and others just because it is time to settle down. So it is with corporate mergers, where many different motives come into play. When I heard about Autonomy’s acquisition of ZANTAZ for $375M on July 3, I could not help wondering what had led to their marriage.

In announcing their union, the happy couple explained that the #1 reason is to achieve “significant scale in a number of key financial areas”. A second reason is that combining the companies will lead to cost savings of $25M per year. In other words, according to the companies, it is a love marriage, in a similar vein to Veritas’ acquisition of ZANTAZ’s main competitor, KVS, in 2004. In that case, Veritas paid 10x trailing revenue for an industry leading product to which it then added tremendous value by building out distribution in the US.

In this case though, the evidence does not support a love story. ZANTAZ is already doing $100M in revenue, so adding Autonomy’s $260M in annual sales does not exactly propel it into a different league. If cost savings are the motivation, then why run ZANTAZ as a separate subsidiary instead of integrating it with Autonomy more closely? Two other things also arouse suspicion: timing and price. On timing, I have to ask: who makes a major announcement on July 3 when half the country is on holiday and the other half can only think about fireworks and hot dogs? Either Autonomy/ZANTAZ’s PR departments are incompetent, or they are trying to downplay the whole thing. Second, on price, why is it so low? ZANTAZ sold itself for 3.75X trailing revenue, a fraction of KVS’ multiple and less than the 4-6X revenue that CommVault and Guidance trade at today.

The story makes more sense as a marriage of convenience. Consider what buyer and seller each get from the deal:

• Autonomy: It is easy to understand why Autonomy is a willing buyer. As my friend Dave Kellogg likes to say, their core business of enterprise search is caught between a “rock” (known as Google Enterprise Search) and a “hard place” (custom apps leveraging open source components like Lucene and MySQL). Yes, Autonomy continues to have the occasional good quarter, but long term their revenue will likely trend down. In that situation, management only has a couple of options. One is to bulk up, for example, by giving up 11% of the company to increase its revenue by 38%, which is what the ZANTAZ deal does. A second option is to diversify into new, growth markets where Google is unlikely to follow, like email archiving and e-discovery. Again, ZANTAZ fits the bill.

• ZANTAZ: In many ways, ZANTAZ is a remarkable company. Having spoken to some of its early investors, management team, and employees, I have huge respect for the way that they weathered the technology downturn early in the decade and built the company back up. The company grew rapidly on the back of big deals for tape restoration into Digital Safe (hosted archive). When ZANTAZ saw the on-site archiving market grow, it added EAS via a smart acquisition. The problem is, having done all that, shareholders had no way of realizing a return. The public market is not interested in the low-margin hosting business that provides the bulk of ZANTAZ’s revenue; for larger companies who want to acquire an archiving product, there are many cheaper, less complicated options. Enter Autonomy who, if nothing else, can provide ZANTAZ’s patient shareholders with liquidity.

Missing from this analysis is any mention of the value Autonomy will add to ZANTAZ’s business, mainly because I cannot think of any. Best case, it leaves ZANTAZ alone, as EMC wisely did with VMWare; worst case, it merges Aungate and the IDOL platform with ZANTAZ and they spend the next few months debating how to reconcile the product roadmaps.

None of this is to say that the marriage will not be successful. As anyone who has seen When Harry Met Sally can tell you, there is no single formula for a successful marriage. I, for one, certainly wish the happy couple well.

From Web 2.0 To E-Discovery 2.0

If there’s one idea that has captivated Silicon Valley in the past 3 years, it is Web 2.0. People may debate its meaning and definition, but the gist of it is clear: a handful of powerful forces have coalesced to make the internet of today fundamentally different to what it was 5 years ago. Opinions vary on which of these forces is most important: the growth of broadband to the home; open source, ajax and other technologies which lower the cost and increase the functionality of web applications; the power of community in a world where more people are on the web. Whichever you choose, there is no doubt that collectively these forces have had a huge impact, powering the growth of now-household names such as Google, MySpace, and YouTube.

I believe that an analogous set of changes is transforming the way companies do e-discovery. Ten years ago, e-discovery was an after-thought – a necessary, but incidental, part of corporate legal expenses. Today, it is a huge line-item in the legal budget, a headache for corporate IT, and the foundation upon which many cases are built.

E-discovery 1.0 was an ad hoc activity; e-discovery 2.0 is a core business process. E-discovery 1.0 was barely noticed; e-discovery 2.0 is driving the news cycle, affecting everyone from Intel to the US Attorney General. In the legal world, e-discovery 2.0 has had every bit as big an impact on enterprises as Web 2.0 has had on the dating lives of teenagers.

What happened? A series of fundamental changes have made e-discovery far more important, expensive, and complex than it was in the 1990s. Chief among these changes are:

1. Email, Not Voicemail: In the past 10 years, companies have switched from voicemail to email as the primary way they communicate. This has created a written record where none previously existed. Just as oral histories eventually die out, every voicemail eventually gets deleted; but emails and the written word live forever. Whatsmore, the convenience and time-efficiency of email makes it addictive, with the result that every meaningful conversation is captured, time-stamped, and attached to a person’s name. Given that many legal cases turn on intent, and proving who knew what when, this makes email a virtual treasure trove for anyone building a case.

2. Electronic Files, Not Paper: Electronic files are fundamentally different to paper documents: they reproduce like rabbits and are far cheaper to store. For example, one laptop is the equivalent of 2,000 boxes of paper; one server corresponds to 8,000-40,000 boxes of paper. The number of servers and laptops holding vast quantities of email is only increasing as the cost of hard disk storage falls, down from $2.04 per GB in 2004 to $0.77 per GB in 2006. Net net: going electronic has vastly increased the amount of data that must be analyzed as part of the discovery process.

3. Sooner, Not Later: Recent changes to the FRCP guidelines have moved e-discovery up in the process, forcing companies to have an e-discovery plan within 99 days of a suit being filed. Since disputes rarely settle that quickly, that means enterprises must now incur the expense of e-discovery on every case, not just the small number that actually make it to court. The result is a massive increase in e-discovery expenses and workload.

Anecdotal evidence of e-discovery 2.0 is everywhere. A few years back, no one would have guessed that every major analyst firm would have people dedicated to tracking e-discovery. Nor would you have expected to find a litigation support manager at every major enterprise.

So what exactly is e-discovery 2.0? Well, I will talk about that in a future post.

eDiscovery In The Blogosphere

It has now been over a month since I started blogging about Email Intelligence and eDiscovery, and perhaps the most pleasant surprise has been to find that I am not alone. As the chart below shows, there has been an explosion of activity around eDiscovery in the blogosphere since the FRCP Rule changes on December 1, 2006, with the happy result that today there are several voices which are well worth listening to.

To assist you in your travels, I offer a brief (and by no means comprehensive) guide to the blogs which have caught my eye. In general, they fall into 3 categories:

1. Messaging Mavens: For an entertaining look at email in the news, I would suggest Roger Matus’ Death by Email, which has everything from videos to colorful commentary. In a similar vein, Chris Foreman’s Messaging Mogul offers an interesting perspective on relevant technologies, in a way that is refreshingly free of the usual mind-numbing marketing-speak.

2. Legal Eagles: There are many lawyers who blog, often covering arcane topics or issues particular to a specific industry. But the one general, business-oriented legal blog that I would recommend is Andrew Cohen’s blog, which makes a range of complicated legal topics accessible to the general reader.

3. Article Clippers: Finally, there are the folks who helpfully collect interesting articles from around the web into a single place, so you can get a filtered view of the latest eDiscovery stories. Foremost among these is Jeff Fehrman and Bob Krantz’s edd blog online which focuses on eDiscovery and forensics.

I do not pretend to have anything close to a complete list. So if there are others worthy of a mention, please add them as a comment so that I can update my list.

Go Ahead, Sue Me!

It is a truism to say that it is easier to dispense advice than to follow it, and with good reason. How many venture capital firms practice the financial discipline they preach to their portfolio companies? How many management consulting companies employ the innovative management theories they advocate to their clients? And how many technology companies actually leverage leading-edge technology to solve their own business problems?

The answer, at least based on my experience, is “not very many”. For example, if you look at Silicon Valley’s leading technology companies, the vast majority do not have an e-discovery solution in place. Yes, there are some exceptions but for the most part, when it comes to e-discovery, the likes of eBay, Google, Yahoo, and (until recently) Intel have preferred to muddle through with manual, error-prone, expensive processes.

The justifications are typically the same. Some technology companies argue that they don’t need a legal discovery solution because theirs is not a litigious industry; others say they delete everything off their Exchange servers within three weeks and so don’t have any email to discover; all agree that things like email and document retention policies are needlessly bureaucratic.

The danger of this “we- don’t- need- car- insurance- because- we- will- never- have- an- accident” approach has been brutally exposed in the past few weeks by the painful experience of Intel. In case you missed the press coverage: AMD sued Intel for anti-trust violations. Like any company on the receiving end of a subpoena, Intel was obliged to provide opposing counsel with all email and documents relevant to the case.

If Intel had an e-discovery solution, that would have been a straightforward process. Intel’s IT group would simply identify a group of messages by date range, person, and perhaps keyword within their larger email archive. The legal group would then use an analysis product to cull down the messages to only those relevant to the case. The whole thing would take a few days. But that’s not what happened. Since Intel did not have an e-discovery solution, the company had no simple way to preserve and analyze the relevant data. Intel’s legal department was obliged to inform over a thousand employees that they could no longer delete data at will. Somewhere along the line, the message did not get through and employees kept on deleting. As a result, Intel was forced to go back to the judge with the proverbial “the dog ate my homework” defense, while AMD cried foul.

How much this costs Intel is yet to be determined. But my guess is that they will end up spending more on lawyers to fix the mess than they would have spent on an e-discovery solution that would have avoided the problem to begin with.

While I have given up on venture capitalists and management consultants, I remain optimistic that the technology industry will practice what it preaches and leverage technology to solve its own business problems in e-discovery. As Intel discovered, it is not enough to have smart lawyers on staff. You also need to equip them with an e-discovery solution that allows them to preserve and analyze information relevant to the case.

To do otherwise is an open invitation to your competitors to sue you. Just ask Larry Ellison – or better yet, SAP.

FRCP Rule Changes: What’s The Big Deal?

As any venture capitalist will tell you, there are two forces which open the window to creating huge, new businesses. The first is a technological breakthrough – think internet, the microprocessor, or mapping the human genome. The second is a change in the regulatory environment, such as airline/telecom deregulation, the new subsidies fueling the boom in clean energy – and the new Federal Rules of Civil Procedure (FRCP), which came into effect on December 1, 2006.


In the legal world, the new FRCP guidelines are a HUGE deal: it is the first time they have changed in 38 years, which is perhaps not surprising since they require approval from Congress and the Supreme Court. As you would expect from our greatest legal minds, the Rules themselves are long, complicated, and (for most people) the perfect antidote to insomnia. But from business’ perspective, the net effect of the changes is pretty simple: there will be a lot more e-discovery.

To understand why, consider the average company with revenues over $1B. According to a recent survey, this “average company” is concurrently managing 556 cases. If you assume that 50% of its cases settle before going to court, then before the FRCP rule changes this company would only have been doing e-discovery on 278 cases.

That all changed on December 1, 2006, when Rules 16 and 26 were amended to provide the court early notice of e-discovery issues. Under Rule 16(b), parties must “meet and confer” at least 21 days before the scheduling conference which, in turn, must occur within 120 days of filing a lawsuit. Rule 16(b) further states that the scheduling order must include “provisions for disclosure or discovery of electronically stored information”, while Rule 26(f) requires that parties “discuss any issues relating to preserving discoverable information and to develop a proposed discovery plan.”

The bottom line: companies can no longer leave e-discovery for later in the process. Thanks to the FRCP rule changes, they must now define and share their e-discovery plans at the “meet and confer” which occurs within the first 99 days of a case. Since cases rarely settle that quickly, our “average company” is now obliged to do e-discovery on all 556 of its concurrent cases, not just the 278 that do not settle. For the corporate legal department, that means their e-discovery workload has doubled overnight, with no increase in manpower to cope with the extra work. So companies are forced to reconsider their e-discovery process and look for ways to leverage technology to cope in a post-FRCP-rule-changes world.

In case you were wondering, I did not figure this out for myself. It was first explained to me by the folks over at the Nassau County Attorney's Office, and has since been echoed by many of our corporate customers.

“I Missed The Boat”

The other day, I heard that a local technology company had a lot of pain around ediscovery. Within hours, one of our board members had contacted the General Counsel who informed us that they had just purchased a product for eDiscovery 3 weeks prior.


That evening over dinner, I summarized the situation by saying to my wife that “I missed the boat.” My 3-year-old son, who was also at the table, immediately started to quiz me: “You missed the boat? The boat left without you? You were late so the boat had to go? There wasn’t room on the boat for you?” For days afterwards, when I left for work, he would ask me: “Are you going on the boat today?”


The thing that really struck me is that we often speak in metaphors, and it is not just 3 year olds who have trouble understanding. One of our customers is a large manufacturing company. On deploying Clearwell to analyze its email, the company discovered a large number of messages with the expression: “The eagle has landed”. That struck them as rather odd, so they investigated and discovered a group of employees were illegally selling company equipment on the grey market and every time they made a sale, they would let those involved know by sending out an email saying “The eagle has landed.” Viewed alone, the expression looks innocent enough; once viewed in the context of emails flowing back and forth, it was clearly a statement of guilt.


Examples like this illustrate why simple keyword search is not enough. Companies need more sophisticated tools which, among other things, group emails into topic areas and link them into discussion threads, to surface coded expressions and analyze them in context. To rely on keyword search alone would be like someone at Proctor and Gamble seeking to analyze point-of-sale data from Walmart with a pocket calculator.


Of course, that doesn’t help me explain missing the boat to my son. So over the weekend, we took him on the ferry between San Francisco and Sausalito – just so he knows I don’t miss the boat every time.